30-Year Mortgage Rate Ticks Up Slightly, Remains Close to 20-Month Low

30-year mortgage interest rates finally edged up after weeks of decline, but remained very close to the lowest levels on record since May 2013.

According to Freddie Mac’s latest Primary Mortgage Market Survey, 30-year FRMs increased to 3.66 percent in the week ended Thursday, January 29. This is just three basis points higher than the previous week’s 3.63 percent, but close to three-fourths of a percentage point lower than the year-ago average of 4.32 percent. 15-year FRMs, on the other hand, ticked up five basis points from 2.93 percent to 2.98 percent, and are 42 basis points lower than last year’s average of 3.40 percent.

30-Year Mortgage Rate

5-year Treasury-indexed hybrid adjustable-rate mortgages added three basis points from 2.83 percent to 2.86 percent, and are 29 basis points lower than last year’s 3.12 percent. Finally, one-year ARMs moved up a single basis point from 2.37 percent to 2.38 percent, and are 17 basis points lower than the year-ago average of 2.55 percent.

Following Frank Nothaft’s move to CoreLogic as its chief economist, this week’s statement on mortgage rates was made by Freddie Mac’s new deputy chief economist Leonard Kiefer. According to Kiefer, it was positive economic news that drove mortgage rates up this week. “Mortgage rates ticked up this week for the first time in 2015 following positive home sales reports,” he said. “New home sales surged 11.6 percent in December beating market expectations. Likewise, existing home sales rose 2.4 percent to an annual rate of 5.04 million homes in December.”

Mortgage rates have been on a downward trajectory since the Federal Reserve announced an end to its economic stimulus program in October. Instead of this move pushing interest rates upward, it has instead coincided with a slow, but steady drop in mortgage rates, with rates now close to where they were in May 2013, when talk of a “tapering” of stimulus fueled a huge spike in the summer. Going forward, most experts are expecting that mortgage interest rates will go back up to the 4.5 percent range or so, as the Fed prepares to announce its first benchmark rate hike later in 2015. It is believed that this may take place as early as June, but maybe a bit later in the year.

Similar to Freddie Mac’s data, Bankrate also reported a slight increase across the board for fixed mortgage rates. 30-year FRMs moved up just one basis point from 3.81 percent to 3.80 percent, and 15-year FRMs added five basis points, advancing from 3.13 percent to 3.18 percent. 5/1 ARMs, which were at 3.19 percent last week, remained unchanged.

In its own statement, Bankrate attributed the fact that rates still remain very low to economic uncertainty in international markets, while also echoing the operative word the Fed has used in how it plans to go about a rate hike. “Mortgage rates remain at the lowest levels since May 2013, despite an improving U.S. economy,” said Bankrate. “The economic sluggishness overseas and increased stimulus from other central banks around the globe have kept the Federal Reserve ‘patient’ about raising interest rates and helped bring both bond yields and mortgage rates lower.”

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