Mortgage rates remained fairly steady this week, even as the Financial Open Market Committee met to discuss potential hikes in the federal funds rate. According to a Bankrate survey, the 30-year fixed mortgage rate was 4.18 percent for the week—equating to a monthly payment of about $975 on a $200,000 loan. Last week, 30-year fixed rates sat at 4.19 percent.
Jumbo 30-year fixed rates were slightly lower at 4.14 percent, while 15-year fixed rate mortgages fell to 3.39 percent, down from 3.43 percent last week. Five-year adjustable-rate mortgages decreased to 3.46 percent from last week’s 4.38 percent, and seven-year ARMs also dropped, hitting 3.62 percent.
Freddie Mac also found mortgage rates were stable over the week, with 30-year fixed-rate mortgages dropping from 4.03 percent to 4.02.
“The 10-year Treasury yield remained relatively flat this week, as did the 30-year mortgage rate which fell 1 basis point to 4.02 percent,” Freddie Mac reported. “Markets have been erring on the side of caution following a weak advance estimate for first-quarter GDP and the FOMC’s broadly expected decision to leave rates unchanged.”
In all, Bankrate found that mortgage rates were 0.25 percent lower than in March when the FOMC raised the federal funds rate from 0.75 to 1 percent. According to Bankrate, the drop can largely be attributed to sluggish economic growth and pending international issues.
“Weakness in first quarter economic growth and geopolitical concerns surrounding North Korea, Syria, and an election in France all contributed to bringing mortgage rates lower,” Bankrate reported. “But with the Fed's glass-half-full economic outlook, dismissing the economic sluggishness at the beginning of the year as temporary, it is evident that the Fed remains inclined to continue raising interest rates.”
This means the low rates won’t last long, according to Bankrate.
“Mortgage rates are likely to trend higher through the balance of 2017 as interest rates rise, but as we've seen recently, there are likely to be plenty of ups and downs as economic sentiment swings back and forth.,” Bankrate reported.