Fed Speculation Calms Down Mortgage Rates; 30-Year at 4.51%

Fed Speculation Calms Down Mortgage Rates; 30-Year at 4.51%Average fixed rates for mortgage moved slightly lower this week as the looming reduction by the Federal Reserve of its bond purchases continues to drive market turbulence, according to Freddie Mac.
Speculation now centers on whether the Fed will delay the pullback in its stimulus program after the runup in mortgage rates over summer — and some indications that higher rates may be slowing home sales.
Contract signings for the purchase of a home declined 1.3 percent to 109.5 in July from 110.9 in June, based on the Pending Home Sales Index from the National Association of Realtors.
Sales of new single-family homes plunged 13.4 percent in July, according to HUD and the U.S. Census Bureau.
“The Fed is monitoring the housing market closely after the run up in mortgage rates over the past few months,” said Frank Nothaft, vice president and chief economist, Freddie Mac.
The 13.4 percent drop in new home sales led financial markets to speculate whether the Fed might delay reducing its bond purchases and that “allowed long-term bond yields and fixed mortgage rates to decline over the week,” Nothaft said.
Here is Freddie Mac’s overview of rates for this week:
30-year fixed-rate mortgage averaged 4.51 percent, with an average 0.7 point, for the week ending August 29, 2013, down from last week when it averaged 4.58 percent. A year ago at this time, the 30-year fixed rate averaged 3.59 percent.
15-year fixed rate this week averaged 3.54 percent, with an average 0.7 point, down from last week when it averaged 3.60 percent. A year ago at this time, the 15-year fixed rate averaged 2.86 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.24 percent this week, with an average 0.5 point, up from last week when it averaged 3.21 percent. A year ago, the 5-year ARM averaged 2.78 percent.
1-year Treasury-indexed ARM averaged 2.64 percent this week, with an average 0.4 point, down from last week when it averaged 2.67 percent. At this time last year, the 1-year ARM averaged 2.63 percent.
Fed Speculation Calms Down Mortgage Rates; 30-Year at 4.51%

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