Mortgage rates pause as markets look at Fed action

While waiting to see what the Federal Reserve would do at its meeting last week, mortgage rates have remained stable.

According to the latest data published by Freddie Mac, the 30-year fixed rate average remained unchanged at 3.75% with an average of 0.6 points. (The points are fees paid to a lender equal to 1% of the loan amount and are added to the interest rate.) It was 4.60% a year ago.

The average fixed rate over 15 years reached 3.20%, with an average of 0.5 points. It was 3.18% a week ago and 4.08% a year ago. Average five-year adjustable rates slipped to 3.46%, averaging 0.4 percentage points. It was 3.47% a week ago and 3.93% a year ago.

At its meeting, the Federal Reserve lowered the federal funds rate for the first time since the 2008 recession, but this decision came too late in the week to be taken into account in Freddie Mac's investigation. The federally chartered mortgage investor aggregates weekly rates from 125 lenders across the country to establish national average mortgage rates.

Although the Fed rate cut did not affect rates last week, this could have an impact in the future. The central bank does not set mortgage rates, but its actions can influence them.

"The Federal Reserve's decision to lower rates is generally good news for homeowners, as it indicates that interest rates will likely remain in the very low current range or may continue to fall," said Mat Ishbia. , President and CEO. United Wholesale Mortgage. "The market is already expecting rates to fall, and seeing rates fall further is likely to suggest a stabilization in this range for the foreseeable future." This is great news for those looking to buy or refinance a home. because rates are among the lowest we've seen in years. "

Because the central bank has lowered its key rate, the preferential rate of credit has decreased. The preferential credit rate is what banks use to set the rates for many consumer loans, such as credit cards or auto loans, and small business loans. This applies to adjustable rate mortgages, but generally not 30-year and 15-year fixed rate mortgages.

"Many borrowers will benefit, especially those with adjustable rate mortgages and commercial real estate loans," said Lawrence Yun, chief economist at the National Association of Realtors. "Longer term fixed rate mortgages over 30 years will see little change in the near future as they have already declined in anticipation of this latest move by the Fed."