And just like that, the Fed has spoken. The Primary Mortgage Market Survey is always aflutter when Ben Bernanke and his merry gang of economists go to work, and yesterday was no different. The market quickly reacted to the Fed’s announcement yesterday stating they wouldn’t start tapering, or slowing their bond purchases, in an effort to keep interest rates low. Rates fell in pure excitement after this announcement. Don’t believe it? Look at the raw numbers straight from Freddie Mac.
30-year fixed-rate mortgage (FRM) averaged 4.50% with an average 0.7 point for the week ending September 19, 2013, down from last week when it averaged 4.57%. A year ago at this time, the 30-year FRM averaged 3.49%.
15-year FRM this week averaged 3.54% with an average 0.7 point, down from last week when it averaged 3.59%. A year ago at this time, the 15-year FRM averaged 2.77%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.11% this week with an average 0.5 point, down from last week when it averaged 3.22%. A year ago, the 5-year ARM averaged 2.76%.
1-year Treasury-indexed ARM averaged 2.65% this week with an average 0.4 point, down from last week when it averaged 2.67%. At this time last year, the 1-year ARM averaged 2.61%.
We’re in the grace period, people. Rising mortgage rates were slapped down by the Fed like LeBron James blocking a shot. It’s like if Ben Bernanke played for the Miami Heat, in a financial sense. Before this PMMS report goes completely off the rails, read a proper explanation of how the mortgage rates have changed this week. As always this comes from Frank Nothaft, vice president and chief economist of Freddie Mac.
“Mortgage rates drifted downwards this week amid signs of a weakening economic recovery. Retail sales rose 0.2 % in August which was nearly half of July’s 0.4 % increase. In addition, industrial production in August grew 0.4 %, less than the market consensus forecast. And lastly, consumer sentiment fell for the second consecutive month in September to the lowest reading since April.
“This, in part, was why the Federal Reserve chose to maintain its MBS and bond-buying program at its September 12th and 13th monetary policy committee meeting. It also cited the tightening of financial conditions observed in recent months, which in the case of the housing market means the rise in mortgage rates since May.”
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