For all the _Sturm und Drang_ surrounding discussions of the Federal Reserve slowing down its monthly asset purchases, mortgage rate movements were somewhat subdued this week leading up to Wednesday's announcement of cuts to the stimulus program.[IMAGE]
""Freddie Mac"":http://www.freddiemac.com/ reported small rate jumps for the week ending December 19, with the 30-year fixed-rate mortgage (FRM) average inching up to 4.47 percent (0.7 point) from 4.42 percent previously. Last year, the 30-year FRM averaged 3.37 percent.
The 15-year FRM averaged 3.51 percent (0.6 point) this week, up from 3.43 percent.[COLUMN_BREAK]
Adjustable rates also rose slightly. Freddie Mac's measure for the average 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) was 2.96 percent (0.4 point), up from 2.94 percent, while the 1-year ARM was up to 2.57 percent (0.5 point) from 2.51 percent.
While the Fed's latest announcement will no doubt play some part in rate changes in the weeks to come, Freddie Mac VP and chief economist Frank Nothaft pointed to housing developments as a factor in this week's changes, noting an increase in ""housing starts"":https://themreport.com/articles/housing-starts-reach-highest-rate-in-almost-6-years-2013-12-18 in November to a five-year high; permits were also up, climbing to a rate of 1.07 million.
Finance site ""Bankrate.com"":http://www.bankrate.com/, meanwhile, reported similar trends. According to the site's weekly national survey, the 30-year fixed rate averaged 4.58 percent this week, while the 15-year fixed averaged 3.63 percent.
Bankrate did, however, note a small decline in the 5/1 ARM, which was down a basis point to 3.33 percent.
""Even with the Federal Reserve's announcement of a tapering to the pace of the bond purchases, don't expect a dramatic spike in mortgage rates. Rather, a tapering was inevitable and even this week's announcement won't actually take effect until January,"" Bankrate said in its release. ""The tapering itself is both modest--scaling back from $85 billion to $75 billion per month--but also a vote of confidence in the continuing economic recovery.""