Mortgage Rates Remain Steady After Fed Meeting
Just as the Federal Reserve stuck to its course on bond purchases this week, mortgage rates too remained more or less steady, measures show.
Freddie Mac released Thursday the results of its Primary Mortgage Market Survey for the week ending June 19, recording an average interest rate of 4.17 percent (0.6 point) for a 30-year fixed-rate mortgage (FRM), down from 4.20 percent last week. A year ago, the 30-year FRM averaged 3.93 percent.
The 15-year FRM was also down, albeit only 1 basis point, averaging 3.30 percent (0.5 point) for the week.
Shifting to adjustable-rate mortgages (ARMs), the average rate for a 5-year Treasury-indexed hybrid ARM was 3.00 percent (0.4 point) this week, falling from 3.05 percent. The 1-year ARM, on the other hand, ticked up to 2.41 percent (0.4 point) from 2.40 percent previously.
A year ago, interest rates were on their way up on speculation that the Fed may soon start tapering its bond stimulus. Now that the central bank is on track to potentially end its stimulus purchases by the end of the year, rates have actually shown little movement, defying expectations.
While the first quarter's economic contraction is partly responsible for rates staying put, analysts at finance site Bankrate.com say developments overseas are also having an effect.
"[A]lthough the Fed is buying fewer bonds, the ongoing stimulus efforts of the European Central Bank have driven interest rates so low on the other side of the Atlantic that many overseas investors have piled into U.S. Treasuries, filling the void left by the Fed and keeping both bond yields and mortgage rates at low levels," they said.
As for its own national survey, Bankrate captured the 30-year fixed at an average 4.33 percent, down a point, while the 15-year fixed was up the same amount 3.44 percent.
The 5/1 ARM remained unchanged at 3.37 percent, meanwhile.
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