Average fixed mortgage rates fell down slightly from last week's post-Brexit high, according to Freddie Mac’s Primary Mortgage Market Survey for the week ending September 22, 2016.
Rates for 30-year FRMs averaged 3.48 percent for the week, a decrease of 2 basis points from a week earlier and down 38 basis points from a year ago. The average 30-year FRM has been below 3.50 percent for the past 12 weeks and below 4 percent for more than nine months.
For 15-year FRMs, the average rate fell down by one basis point from the previous week up to 2.76 percent. A year ago, the average 15-year FRM averaged 3.08 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80 percent for the week ending September 22, down two basis point from the previous week and down from 2.91 percent from a year ago, according to Freddie Mac.
The average 30-year FRM is still only 17 basis points above its record low of 3.31 percent set in November 2012.
“The 10-year Treasury yield declined after last week's post-Brexit high in anticipation of the Fed's September policy meeting. The 30-year fixed-rate mortgage followed Treasury yields, falling 2 basis points and settling at 3.48 percent. Despite the decrease in rates, the Refinance Index plunged 8 percent to its lowest level since June.”
A report from HSH.com states that The Federal Reserve concluded their meeting on September 21 with no change to the federal funds rate and no changes to other monetary policy tools. The vote to remain steady was 7 to 3, with three voting members preferring to lift the federal funds rate now, rather than waiting.
“At some point in the cycle, the Federal Reserve will have lifted interest rates to a point where inflation and the economy will be expected to cool,” said Keith Gumbinger, vice president of HSH.com. “As the market starts to anticipate this economic slowing, long-term interest rates may actually start to fall even though the Fed may still be raising short-term rates. Long-term rates fall in anticipation of the beginnings of a cycle of reductions in the fed funds rate, and the cycle comes full circle.”