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2014-09-19 11:10:53
Ave Fixed Mort Rates Make Biggest Weekly Jump This

Average Fixed Mortgage Rates Make Biggest Weekly Jump This Year; 30-Year at 4.23%

Even though rates on the most popular home loans remain historically low, average fixed mortgage rates made their biggest one-week gain so far this year.


That takes mortgage rages to their highest level since the week ending May 1, Freddie Mac reported.

The rate climb came about before the Federal Reserve’s announcement Wednesday on the continuous winding down of its trillion-dollar stimulus.

The Fed expects to end the program altogether when it meets next month as the economy’s recovery plows forward on mostly solid footing.

The Fed has maintained its key short-term interest rate at zero since 2008, a controversial practice that has helped fuel lower borrowing costs for consumers and businesses.

But the Fed’s actions have also helped drive record Wall Street gains that could signal the next financial bubble.

The Fed’s Next Move

In its official policy statement, the central bank said the federal funds interest rate would remain at zero for a “considerable time” after its bond purchases end.

The 30-year fixed-rate mortgage averaged 4.23 percent this week, up from 4.12 percent.

“Fixed-rate mortgage rates rose this week following the increase in 10-year Treasury yields being partially fueled by market speculation the Federal Reserve might change its interest rate guidance,” said Frank Nothaft, vice president and chief economist, Freddie Mac.

Meanwhile, the Labor Department reported that its Consumer Price Index (CPI) declined 0.2 percent in August reflecting declines in energy prices.

Even as rates increased, mortgage applications picked up significantly last week, according to the latest data from the Mortgage Bankers Association.

The market composite index, a measure of total loan application volume, increased 7.9 percent. The refinance index grew 10 percent, while the purchase index rose 5 percent.

The refinance share of mortgage activity accounted for 57 percent of all applications.

Here is Freddie Mac’s recap on mortgage rates:

  • 30-year fixed-rate mortgage (FRM) averaged 4.23 percent, with an average 0.5 point for the week ending September 18, 2014, up from last week when it averaged 4.12 percent. A year ago at this time, the 30-year FRM averaged 4.50 percent.
  • 15-year FRM this week averaged 3.37 percent, with an average 0.5 point, up from last week when it averaged 3.26 percent. A year ago at this time, the 15-year FRM averaged 3.54 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.06 percent this week, with an average 0.5 point, up from last week when it averaged 2.99 percent. A year ago, the 5-year ARM averaged 3.11 percent.
  •  1-year Treasury-indexed ARM averaged 2.43 percent this week, with an average 0.4 point, down from last week when it averaged 2.45 percent. At this time last year, the 1-year ARM averaged 2.65 percent.

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