Horses are our business... Our only business!     (631) 979-2965  
<< Back to Listing

Mortgage rates increase to 3.12% as Fed charts new course

Fri Jan 22

Freddie Mac economist said rates inched up due to economic improvement and a shift in monetary policy guidance

The average 30-year-fixed rate mortgage increased to 3.12% during the week ending Dec. 16, up from 3.10% the week prior, according to the latest Freddie Mac PMMS Mortgage Survey. A year ago, the 30-year fixed-rate mortgage averaged 2.67%.

The 15-year-fixed-rate mortgage averaged 2.34% last week, declining from 2.38% the week prior. A year ago, at this time, it averaged 2.21%. Mortgage rates tend to move in concert with the 10-year Treasury yield, which reached 1.47% on Wednesday, down from 1.52% a week before. 

The report is focused on conventional, conforming, fully amortizing home purchase loans for borrowers who put 20% down and have excellent credit

Sam Khater, Freddie Mac’s chief economist, said in a statement that while house price growth is slowing, prices remain high due to solid housing demand and low supply. “We expect rates to continue to increase into 2022, which may leave some potential homebuyers with less room in their budgets on the sideline.”   

According to Khater, the 30-year-fixed mortgage rate inched up due to economic improvement and a shift in monetary policy guidance.

The Federal Reserve announced on Wednesday it is accelerating the tapering program initiated in November “in light of inflation developments and the further improvement in the labor market.” Beginning in January, it will reduce the pace of its monthly purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities.

The central bank sees progress on vaccinations and strong policy support, solid job gains, and improvements in sectors most affected by the pandemic. But supply and demand imbalances and the reopening of the economy have continued to contribute to elevated inflation levels. 

“The path of the economy continues to depend on the course of the virus,” the FED said. “Risks to the economic outlook remain, including from new variants of the virus.” 

Rising mortgage rates have already begun to sap demand. Mortgage application activity dropped 4% for the week ending Dec. 10, according to the most recent Mortgage Bankers Association (MBA) survey. 

The Refinance Index decreased 6.4% in one week, while the Purchase Index increased 0.7% in the same period. “Fewer homeowners have a strong incentive to refinance at current rates,” Joel Kan, the MBA’s associate vice president of economic and industry forecasting, said in a statement.



Category : Real Estate News
Long Island Equine
Largest source for equine properties in Long Island, New York
  (631) 979-2965



Copyright © 2019 Ecesis Technologies All Right Reserved