Rates for two popular mortgage types nudged slightly upward in recent days to an eight-week high, but future activity continues to hinge upon actions taken by the Federal Reserve this year.
In the last week, the average rate for conforming 30-year fixed-rate mortgages rose by five basis points to 4.46%, while conforming 5/1 hybrid adjustable rate mortgages rose seven basis points to 3.18%, according to the latest weekly mortgage survey data from HSH.com.
Though not a large rate spike, the slight increase brings rates back to levels not seen since January, according to Keith Gumbinger, vice president of HSH.com.
“While not a spike like we saw last spring, the small bump in rates was sufficient to put us back to levels seen in late January,” Gumbinger said in a statement. “However, we are still at very favorable levels as we begin the traditional spring homebuying season, even if the Fed and an expected warming in the economy may conspire to nudge them higher in the weeks ahead.”
In harmony with plans to end its Quantitative Easing (QE) program by October, the Federal Reserve is slowing its purchases of mortgage-backed securities and Treasury bonds—a move that could lead to the first change in short-term rates since 2008 sometime next spring, HSH notes.
“Fed Chair Janet Yellen made a splash in the press conference which accompanied last week’s Federal Reserve Policy meeting,” said Gumbinger. “Her characterization of how quickly the Fed might begin to raise interest rates once the QE tapering is completed was surprisingly clear, and seemed to be sooner than markets were expecting.”
HSH.com, of Riverdale, New Jersey, is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), an internet marketing and media company that provides consumers and businesses with information they need to research, find and select products, services and brands that best meet their needs.
Written by Jason Oliva