Mortgage rates rise ahead of Fed’s annoucement

23 Dec 2015 | Author: | No comments yet »

Bankrate: Mortgage Rates Nosed Higher Leading Up to Fed Hike.

Interest rates on home loans are expected to move higher throughout the coming year following Wednesday’s announcement by the Fed that it was raising its benchmark rate.Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing fixed mortgage rates ticking slightly higher for the second week in a row amid the Federal Reserve’s decision to raise short-term interest rates for the first time since 2006.NEW YORK, Dec. 17, 2015 /PRNewswire/ — Mortgage rates were a touch higher in the days leading up to the Federal Open Market Committee meeting, with the benchmark 30-year fixed mortgage now 4.09 percent, according to Bankrate.com’s weekly national survey.

The government-backed mortgage finance company aggregates current rates weekly from 125 lenders from across the country to come up with national average mortgage rates. The 30-year fixed-rate average rose to 3.97 percent with an average 0.6 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.95 percent a week ago and 3.8 percent a year ago. Right now, the share of adjustable-rate mortgages in the US market is near a record low—around 5%, according to data from the Federal Housing Finance Agency.

With the Fed delivering exactly what was expected – a quarter-point rate hike now and a pledge of a gradual pace going forward – there was a ho-hum reaction in the government bond market, with no sharp moves in mortgage rates likely at this point. A separate hypothesis was that, with long-term interest rates already low compared to short-term ones, people simply preferred taking on fixed-rate mortgages. The survey is complemented by Bankrate’s weekly Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next seven days. The point is that a Fed rate hike would have been a bigger deal for the mortgage market several years ago, when ARMs made up a much larger share of the entire universe of US home loans.

We are likely to see some short-term volatility in fixed-income markets as market participants adjust to these new tools.” Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Bankrate provides consumers with proprietary, fully researched, comprehensive, independent and objective personal finance editorial content across multiple vertical categories including mortgages, deposits, insurance, credit cards, and other categories, such as retirement, automobile loans, and taxes. The Bankrate network includes Bankrate.com, CreditCards.com, InsuranceQuotes.com and Caring.com, our flagship websites, and other owned and operated personal finance websites, including Interest.com, Bankaholic.com, Mortgage-calc.com, CreditCardGuide.com, CarInsuranceQuotes.com, Insweb.com, CreditCards.ca, and NetQuote.com. Bankrate develops and provides web services to over 100 co-branded websites with online partners, including some of the most trusted and frequently visited personal finance sites on the Internet such as Yahoo!, CNBC, and Bloomberg.

In addition, Bankrate licenses editorial content to over 500 newspapers on a daily basis including The Wall Street Journal, USA Today, The New York Times, The Los Angeles Times, and The Boston Globe. To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/bankrate-mortgage-rates-nosed-higher-leading-up-to-fed-hike-300194351.html

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