Mortgage Interest Rate Report - November
Last Updated: 11/11/2013
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Long-term mortgage interest rates fell in October as a result of the government shut-down and Federal Reserve announcements, according to mortgage finance company Freddie Mac.
During the first week of October, rates took a tumble, with the 30-year fixed rate mortgage (FRM) carrying an average rate of 4.22 percent, down from 4.32 percent the previous week The average rate on a 15-year FRM fell to 3.29 percent from 3.37 percent and the one-year adjustable rate mortgage (ARM) had an average rate of 2.63 percent, unchanged from the week before.
"With the onset of the federal government shutdown and declining consumer confidence, fixed mortgage rates fell for the third consecutive week, said Frank Nothaft, Freddie Mac vice president and chief economist in a statement.
The following week rates fluttered upward. The average rate on a 30-year FRM inched up to 4.23 percent, the 15-year FRM rose to 3.31 percent and the one-year ARM had an average rate of 2.64 percent.
Rates bumped up a bit more the next week, with the 30-year FRM rate rising to 4.28 percent and the 15-year FRM increasing to 3.33 percent. The one-year ARM slipped to 2.63 percent.
The government shutdown the next week helped rates plummet again. The 30-year FRM carried an average rate of 4.13 percent and the 15-year FRM rate fell to 3.24 percent. The one-year ARM also dropped, resting at 2.60 percent.
"Mortgage rates slid this week as the partial government shutdown led to market speculation that the Federal Reserve will not alter its bond purchases this year,” said Nothaft. “The weak employment report for September added to this expectation.”
Hallowween registered another drop in rates as the Fed announced its plan to continue buying bonds at its current rate. The 30-year FRM rate fell to 4.10 percent and the 15-year FRM declined to 3.20 percent. The one-year ARM rose to 2.64 percent.
"Fixed mortgage rates eased further leading up to the Federal Reserve's (Fed) October 30th monetary policy announcement. The Fed saw improvement in economic activity and labor market conditions since it began its asset purchase program, but noted the recovery in the housing market slowed somewhat in recent months and unemployment remains elevated. As a result, there was no policy change which should help sustain low mortgage rates in the near future."
Now that the markets know there will be no tapering of the Fed's stimulus program through the end of the year, investors should relax a little and rates should stay quite near their current range in November.