04 Jan Mortgage rates dip moderately in first week of the new year
Nearly a month after the Federal Reserve raised benchmark interest rates by 25 basis points, mortgage rates have remained stubbornly low, with 30-year fixed-rate mortgages dipping to 3.95 percent, according to Freddie Mac in its first Mortgage Market Survey of the new year.
The slight 4 basis-point dip, from 3.99 percent to 3.95 percent for the week ending Jan. 4, mirrors a similar downward tick for 15-year fixed-rate mortgages, which slid 6 basis points, from 3.44 percent to 3.38 percent during the same period, according to the new survey.
Lower yields on 10-year and 30-year Treasury notes earlier this week helped drive the mortgage rates down, according to Freddie Mac Deputy Chief Economist Len Kiefer.
“Treasury yields fell from a week ago, helping to drive mortgage rates down to start the year,” said Kiefer, adding that 30-year fixed-rate mortgages fell a quarter of a percent point year-over-year. “Despite increases in short-term interest rates, long-term interest rates remain subdued.”
Sticking to a script economists had long anticipated, Federal Chairwoman Janet Yellen announced a modest benchmark interest rate hike of between 1.25 percent and 1.50 percent on Dec. 13, 2017, a move widely perceived as a reflection of confidence in the U.S. economy.
The 25 basis point hike, announced at the conclusion of the Central Bank’s two-day Open Market Committee meeting, was supported by all but two members of its Board of Governors, who called for rates to stay unchanged. It marked the third and final hike of 2017.
Of the Fed announcement, Kiefer predicted only gradual increases over the next several months.
“With the [Federal Open Market Committee] FOMC minutes showing continued support for gradual increases in policy rates from many participants and inflation rates remaining low, there isn’t much upward pressure on long- term rates at the moment,” said Kiefer, in a prepared statement. “Whether that changes due to a tighter labor market and the economic impact of tax reform remains to be seen.”
Read More Via Inman.com