Mortgage Rates Inch Higher For Fourth Straight Week
After a busy holiday week, followed by a four-day stretch in which all financial markets were closed, mortgage rates didn’t move much.
As predicted, the benchmark 30-year fixed mortgage rates rose just 0.01 percent, to 6.24 percent, according to a Bankrate national survey of large lenders.
The mortgages in this week’s survey had an average total of 0.27 discount and origination points. One year ago, the benchmark 30-year mortgage rate was 6.27 percent; four weeks ago, it was 6.08 percent.
The 15-year fixed-rate mortgages, meanwhile, rose 3 basis points to 5.99 percent. The 5/1 adjustable-rate mortgage rose 4 basis points to 6.15 percent.
The average rate on the 30-year fixed has now risen four weeks in a row. Prior to that, it had fallen six weeks in a row. The last time the fixed-rate 30-year mortgage loan was this high was back on November 15, when it was also 6.24 percent.
As you can see, not a drastic change from a week ago. This is still a terrific time for a mortgage refinance if you hold an adjustable-rate loan that’s set to increase, as fixed rates remain near record lows.
Not much economic news came out during the week, with stock markets and the Federal Reserve being closed Monday for the New Year’s holiday and Tuesday as a day of mourning for President Gerald R. Ford.
The two most important reports of the week came out Wednesday. First, the Institute of Supply Management’s index for manufacturing in December was higher than expected at 51.4.
In this gauge of the nation’s aggregate manufacturing activity, any number over 50 indicates expansion. In November, the index had registered at 49.5, suggesting a minor contraction.
Inflation still worries the Federal Reserve, however. The U.S. Central Bank released the minutes of its most recent rate policy meeting on December 12. It showed that the members of the rate-setting committee are still worried about the possible impact of inflation and a possible housing market decline.
The key sentence of the minutes went like this:
“Although readings on core inflation had improved modestly since the spring, price pressures were not viewed as convincingly on a downward trend. Most participants expected core inflation to moderate slowly over time, but stressed that the risks to the inflation outlook remained to the upside.”
In other words, don’t expect home loans to get a lot cheaper or more expensive in the immediate future, but stay tuned, because even the top financial regulators aren’t quite sure what to make of this market at present.