The 30-year fixed-rate mortgage had remained the same at 3.75 percent, which is still close to 2015’s in-year lows, while the 5/1 hybrid adjustable-rate loan was up by only one basis point, ending the week at 2.91 percent, up from the prior week’s 2.90 percent. According to HSH, this should bode well for consumers this spring home buying season.
“We’re in a bit of a quiet period for mortgage rates at the moment,” said HSH.com vice president Keith Gumbinger in a statement. “The soft employment report for March came out nearly two weeks ago, and the Federal Reserve doesn’t meet again for another two, so we’re enjoying a very nice lull for mortgage rates over the last week or so.”
Due to March’s employment report, which showed only 126,000 new jobs created, the Fed appears to be concerned about the sudden slowdown in the employment market and the continued softness in inflation rates. This has led many pundits to forecast that the Fed will not be raising short-term interest rates until later in 2015.
Previously, most were expecting the central bank to act on interest rates in June or July, but it now looks more likely than ever that the first rate hike will take place in September 2015 or later. More insight should be available at the Fed’s next Open Market Committee meeting, which will be held from April 28 through 29.
Going forward, Gumbinger believes that while the historically low mortgage rates will be good news for spring home buyers, rapid home price increases may continue to be a problem, even if price appreciation has decelerated as compared to the same time last year. “Still, even those with lesser credit or smaller down payments should find more willing lenders this year than at any time over the past few springs, so if they are inclined to buy a home, they should be able to find the financing they need, even though their costs will be slightly higher,” he concluded.