Mortgage Rates Hold Near All-Time Lows

Author: Tory Barringer in Daily Dose, Data, Headlines, News January 29, 2015 Share on facebookShare on twitterShare on google_plusone_shareShare on linkedinMore Sharing Services32

Mortgage rates moved in a small range this week, hovering close to historical lows as economic troubles around the world weighed against progress at home.

According to data released by Freddie Mac on Thursday, the average interest rate for a 30-year fixed-rate mortgage (FRM) loan was 3.66 percent (0.6 point) for the week ending January 29. This week's movement marked a slight increase from last week's average 3.63 percent—the first time this year that rates have gone up in the company's survey.

The 15-year FRM averaged 3.98 percent (0.5 point), up from 2.93 percent last week.

Average rates on adjustable-rate mortgages (ARMs) also slid up for the week. According to Freddie, the 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 2.86 percent (0.4 point) this week, up from 2.83 percent, while the 1-year ARM averaged 2.38 percent (0.4 point), up from 2.37 percent.

"Mortgage rates ticked up this week for the first time in 2015 following positive home sales reports," said Len Kiefer, deputy chief economist for Freddie Mac. "New home sales surged 11.6 percent in December beating market expectations. Likewise, existing home sales rose 2.4 percent to an annual rate of 5.04 million homes in December."

Meanwhile, finance site Bankrate.com recorded rate declines in its weekly survey, putting the 30-year fixed average at 3.80 percent from last week's 3.81 percent. The 15-year fixed average fell more, dropping 5 basis points to 3.13 percent.

The 5/1 ARM was unchanged in Bankrate's report, resting at 3.19 percent.

"Mortgage rates remain at the lowest levels since May 2013, despite an improving U.S. economy," analysts for the site said. "The economic sluggishness overseas and increased stimulus from other central banks around the globe have kept the Federal Reserve 'patient' about raising interest rates and helped bring both bond yields and mortgage rates lower."

While the economic situation overseas got only a passing nod in the Federal Open Market Committee's latest statement, policymakers at the Fed don't seem interested in pushing their schedule for rate hikes forward, citing a decline in inflation as energy costs fall.

Experts expect that at this rate, the earliest the central bank will act on interest rates is in the summer.