Mortgage Interest Rate Report - September
Last Updated: 9/23/2014
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Long-term mortgage interest rates stayed in an extremely tight range in August, according to mortgage finance company Freddie Mac, with rates ending the month at their lowest point of the year.
The month started out with a small increase in rates. The average rate on a 30-year fixed-rate mortgage (FRM) inched up to 4.14 percent, excluding fees, up from 4.12 percent the week before. The 15-year FRM carried an average rate of 2.37 percent, up from 3.23 percent and the one-year adjustable-rate mortgage (ARM) fell to 2.35 percent from 2.38 percent the week before.
"Mortgage rates were little changed amid a week of light economic reports,” commented Freddie Mac vice president and chief economist Frank Nothaft. “Of the few releases, ISMnon-manufacturing index rose to 58.7 in July from 56.0 a month earlier. Also, factory orders were up 1.1 percent in June. The two reports signal steady economic growth in the third quarter of the year."
The next week rates dipped back down, with the 30-year FRM rate slipping to 4.12 percent, the 15-year FRM dropping to 3.24 percent and the one-year ARM up at 2.36 percent.
"Mortgage rates were down slightly this week, following the decline in 10-year Treasury yields,” said Nothaft of the third week. The average rate on the 30-year FRM fell to 4.10 percent, the lowest all year. The 15-year FRM eased down to 3.23 percent while the one-year ARM grew to 2.38 percent again.
The 30-year FRM rate was unchanged during the last week of August, holding steady at 4.10 percent. The 15-year FRM stepped up to 3.25 percent and the one-year ARM rose to 2.39 percent.
"Mortgage rates were little changed following mixed housing news. Existing home sales rose for the fourth consecutive month to an annualized pace of 5.15 million, the highest of the year. On the other hand, new home sales fell for the third consecutive month to an annualized rate of 412,000 units,” Nothaft explained.
The Federal Reserve is still committed to ending its stimulus program of buying up mortgage-backed securities and this will eventually have an upward pull on mortgage rates. The economy is doing better in general now than it did in the first quarter of this year and that should also help push rates slightly higher, although rates are not likely to move too quickly.