Mortgage rates have risen for a third consecutive week and are back at levels last seen two months ago.
Even so, homebuyers continue to enjoy historically cheap financing. So, it remains an excellent time to refinance.
Low rates have persisted even as the Federal Reserve has indicated that it intends to increase short-term borrowing costs one more time in 2017. Now, a new report indicates some central bank officials want to slow things down and keep rates low.
What the Fed is thinking
Minutes released from the June Fed meeting show some policymakers are questioning the current pace of rate hikes, because inflation remains weak. The Fed last month raised a key short-term interest rate, and policymakers stuck with their plan for another increase before the year is out.
The minutes also provide more detail about the central bank's intention to start unwinding its $4.5 trillion balance sheet of mortgage-backed securities and Treasury bonds, which would put upward pressure on long-term rates, including mortgage rates.
The Fed's policy panel "currently anticipates reducing the quantity of reserve balances, over time, to a level appreciably below that seen in recent years but larger than before the financial crisis," the minutes say.
Why mortgage rates remain so attractive
Despite the Fed's rate hikes this year, mortgage rates have trended downward over recent months. That's because they are influenced more by investor demand for long-term bonds than by the actions of the Federal Reserve.
Investors, buoyed by single-party control of the Congress and White House after the 2016 election, decided to sell safer government bonds in favor of faster-growing stocks. Equity indexes have been hitting all-time highs as Treasury prices have dropped. (Bond prices and yields have an inverse relationship.)
The current trends could keep mortgage rates stable, which is great news if you're in the market to buy a home or still need to refinance out of a mortgage with a higher rate.
Mortgage rates this week
The benchmark 30-year fixed-rate mortgage rose this week to 4.16 percent from 4.07 percent, according to Bankrate's weekly survey of large lenders. A year ago, it was 3.52 percent. Four weeks ago, the rate was 4.04 percent. The 30-year fixed-rate average for this week is 0.28 percentage points below the 52-week high of 4.44 percent, and is 0.64 percentage points greater than the 52-week low of 3.52 percent.
The 30-year fixed mortgages in this week's survey had an average total of 0.25 discount and origination points.
Weekly national mortgage survey
|This week's rate:||4.16%||3.37%||3.58%|
|Change from last week:||+0.09||+0.06||+0.06|
|Change from last week:||+$8.62||+$4.83||+$5.54|