Mortgage Rates, Real Estate News | Oct 10, 2013 | By: Neal J. Leitereg
Mortgage rates saw a slight uptick for the first time in a month as the government remains closed for business.
Interest rates on key loans had trended downward over the last month because of ongoing recovery concerns, particularly the Fed’s decision to continue its bond-buying stimulus program. The latest increase is attributed to the fact that the government shutdown has prevented the release of various economic reports that influence the bond market and mortgage rates.
The average rate on a 30-year fixed mortgage loan rose 0.01 percentage point this week, according to the latest survey from mortgage buyer Freddie Mac. After dropping to 4.22 percent a week ago, its lowest mark since June 20, the 30-year fixed is now trending at 4.23 percent. It had previously fallen for three consecutive weeks. A year ago, the 30-year average was 3.39 percent – a difference of 0.84 percentage point.
The average rate on a 15-year fixed mortgage loan also saw a slight uptick. Previously at 3.29 percent, the 15-year average is now at 3.31 percent, an increase of 0.02 percentage point. One year ago, the 15-year fixed-rate average was trending at 2.7 percent – a difference of 0.59 percentage point.
Hybrid adjustable-rate mortgage loans also saw a slight increase. The average rate on a five-year ARM saw an increase of 0.02 percentage point this week, climbing from 3.03 percent to 3.05 percent. The one-year ARM rose by 0.01 percentage point, settling at 2.64 percent up from 2.63 percent a week ago.
“Mortgage rates were little changed amid the federal debt impasse in Washington, D.C. and a light week of economic data releases,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement. “Of the few releases, the private sector added an estimated 166,000 jobs in September, which were fewer than the market consensus and followed a downward revision of 17,000 workers in August, according to the ADP Research Institute. The Institute for Supply Management reported a greater slowing in growth in the non-manufacturing industry in September than the market consensus forecast.”
In addition to a lack of economic indicators, the stoppage has impacted the amount of mortgage applications that are processed. Rates hovering near historic lows have kept home buyers interested, but the shutdown has slowed the ability of lenders looking to confirm borrowers’ incomes and identities.
Don’t expect to see much of a change in mortgage rates in the short-term until there is a resolution to the ongoing government shutdown. According to the latest Mortgage Rate Trend Index by Bankrate.com., 92% percent of mortgage experts polled believe rates will remain unchanged or trend downward over the next week.
“Uncertainty abounds in the markets regarding Washington and the economy, opined FBC Mortgage planner Jim Sahnger. “The only uncertainty removed from traders’ concerns this week is Janet Yellen being selected to replace Ben Bernanke. This ultimately should be favorable for rates. Rates should remain rangebound over the next week.”
Source: Realtor.com
