Mortgage rates interrupted a five-week slide this week by ticking upward. But it's not the kind of increase that would have much of an effect on monthly payments, giving homebuyers some breathing room to lock a rate.
The real question shouldn't be, 'Why did rates go up?" so much as "Why didn't they go up more?" After all, the past eight days have featured the news that the Federal Reserve increased a key short-term interest rate and said it would trim its massive holdings of mortgage-backed securities and Treasury bonds, a move intended to push up long-term rates.
"Low mortgage rates have been pretty resilient so far to the Fed's moves, explains Danielle Hale, managing director of housing finance at the National Association of Realtors. "And that's been a positive for buyers."
What we're seeing, says Len Kiefer, deputy chief economist at Freddie Mac, is mortgage rates returning to pre-election trends, because the economy itself isn't changing much.
"It's really on the inflation and wage front, where we're not seeing a lot of movement, and relatively weak overall economic growth, but that's sort of the same story we've had over the past couple of years," Keiffer says.
Should you lock?
It's always worth mentioning that the decision to lock a mortgage rate should be based mostly on individual factors, says NAR's Hale. Risk-takers could wait a little longer to see if the general drift downward continues.
But for those looking for a safe bet, rates are down substantially since the beginning of the year and represent a bargain by historical standards. With economic fundamentals pointing to higher rates by the end of the year, it might be smart just to find a rate you like and lock now, she says.
Mortgage rates this week
The benchmark 30-year fixed-rate mortgage rose this week to 4.05 percent from 4.02 percent, according to Bankrate's weekly survey of large lenders. A year ago, it was 3.73 percent. Four weeks ago, the rate was 4.13 percent. The 30-year fixed-rate average for this week is 0.39 percentage points below the 52-week high of 4.44 percent, and is 0.53 percentage points above the 52-week low of 3.52 percent.
The 30-year fixed mortgages in this week's survey had an average total of 0.23 discount and origination points.
Over the past 52 weeks, the 30-year fixed has averaged 3.98 percent. This week's rate is 0.07 percentage points higher than the 52-week average.
- The 15-year fixed-rate mortgage rose to 3.27 percent from 3.25 percent.
- The 5/1 adjustable-rate mortgage rose to 3.47 percent from 3.41 percent.
- The 30-year fixed-rate jumbo mortgage was flat at 4.00 percent.
At the current 30-year fixed rate, you'll pay $480.30 for every $100,000 you borrow, up from $478.57 last week.
At the current 15-year fixed rate, you'll pay $703.64 for every $100,000 you borrow, up from $702.67 last week.
At the current 5/1 ARM rate, you'll pay $447.37 for every $100,000 you borrow, up from $444.04 last week.
Weekly national mortgage survey
|This week's rate:||4.05%||3.27%||3.47%|
|Change from last week:||+0.03||+0.02||+0.06|
|Change from last week:||+$2.86||+$1.61||+$5.50|