Fixed mortgage rates jumped this week as markets awaited the release of minutes from the Federal Open Market Committee’s (FOMC) July meeting, which contained hints of when the Federal Reserve might start reducing its bond purchases.
According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 4.58 percent (0.8 point) for the week ending August 22, up from last week’s 4.40 percent. A year ago at this time, the 30-year FRM averaged 3.66 percent.
The 15-year FRM averaged 3.60 percent (0.7 point), up from 3.44 percent previously.
Adjustable rate movements trended downward. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.21 percent (0.5 point), down from 3.23
percent in the last survey. The 1-year ARM averaged 2.67 percent (0.5 point), flat week-over-week.
Recounting the minutes of the FOMC’s meeting, Freddie Mac chief economist Frank Nothaft noted “the committee members were broadly comfortable with a plan to start reducing its bond purchases later this year, although a few emphasized the importance of being patient.”
“Meeting participants acknowledged mortgage rate increases might restrain housing market activity, but several members expressed confidence the housing recovery would be resilient in the face of higher rates,” Nothaft said. “In fact, existing home sales increased in July to the strongest pace since November 2009 and homebuilder confidence in August rose to its highest reading since November 2005. Both increases occurred after mortgage rates had risen from their spring-time lows.”
Meanwhile, Bankrate.com reported a two-year high for the 30-year fixed average in its own weekly survey. The 30-year fixed reached 4.74 percent, Bankrate observed, while the 15-year fixed jumped to 3.75 percent.
On the adjustable rates side, the 5/1 ARM climbed to 3.69 percent.
“While nothing is official yet, and likely won’t be at least until we get to the other side of the jobs report in early September, the markets have clearly priced in the expectation of Fed tapering at that point,” Bankrate said in a release.
By Tory Barringer