Fixed-rate mortgages saw a slight decline this week. The downward move comes after rates saw a healthy increase over the past three weeks in response to positive economic reports, particularly in the growth of private-sector employment.
The drop in rates is seen as a response to a reduction in reports on economic indicators, as major markets brace for news from the Federal Open Market Committee meeting next week.
“Mortgage rates were little changed amid a light week of economic data releases,” Frank E. Nothaft, Freddie Mac vice president and chief economist, said in a statement.
“Of the few releases, total nonfarm payroll employment rose by 203,000 in November, and the unemployment rate declined to 7 percent. Also, single-family mortgage debt outstanding increased for the first time since 2008. This is a positive sign, as it reflects that the pick-up in new purchase-money originations has offset loan paydowns and led to a net increase in principal outstanding.”
The average rate on a 30-year fixed-rate mortgage dropped 0.04 percentage point, according to the latest mortgage survey by Freddie Mac. Previously at 4.46 percent, it is now at 4.42 percent. The 30-year fixed-rate average has increased by more than a full percentage point year-over-year; it was at 3.32 percent a year ago.
The average rate on a 15-year fixed-rate mortgage edged downward to 3.43 percent, a change of 0.04 percentage point week-over-week. A year ago, the 15-year fixed rate averaged a modest 2.66 percent.
Hybrid adjustable-rate mortgages also saw a decrease. After nearing the 3 percent mark, the average on a five-year ARM eased to 2.94 percent. The one-year ARM dropped 0.08 percentage point this past week and is now at 2.51 percent.
While news from the Federal Open Market Committee meeting is expected to bring an uptick in mortgage rates, it may have a trickle-down effect through December and into the beginning of January. In the latest Mortgage Rate Trend Index by Bankrate.com, the majority of loan experts polled believe that rates will hold steady in the short-term.
“Mortgage rates to hold steady until we hear from the Fed regarding whether the tapering starts this month or not,” opined Greg McBride, senior financial analyst at Bankrate.com.
Read More: realtor.com