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Down, Down, Down for Mortgage Rates

Rates drop BHWho says mortgage interest rates are headed toward the 5 percent mark? For the week ending January 19, rates declined for the third consecutive week and are now headed back toward 4 percent.

The average 30-year FRM dropped by 3 basis points over-the week, down to 4.09 percent after reaching a two-year high of 4.32 percent to start 2017, according to Freddie Mac’s latest Primary Mortgage Market Survey (PMMS). The average 15-year FRM declined by 3 basis points down to 3.34 percent for the week ending January 19.

“After trending down for most of the week, the 10-year Treasury yield rose following the release of the CPI report,” Freddie Mac Chief Economist Sean Becketti said. “In contrast, the 30-year mortgage rate fell three basis points to 4.09 percent, the third straight week of declines.”

Bankrate.com posted similar numbers in its weekly national mortgage rates survey, with the 30-year fixed rate averaging 4.18 percent—the third straight week of declines reported by Bankrate. The average 15-year FRM remained unchanged from the previous week at 3.41 percent in Bankrate’s survey.

“Mortgage rates fell for the third week in a row, despite a slight upward creep in inflation and wages,” Bankrate.com reported. “The Consumer Price Index went up 2.1 percent in 2016, which is higher than the Federal Reserve's inflation target. The Fed also noted that businesses are seeing upward pressure on wages. The inflationary news didn't push mortgage rates higher, though, as geopolitical uncertainty dominated.”

According to Bankrate, the average monthly payment is $975.70 for a $200,000 mortgage loan at the current 30-year FRM rate of 4.18 percent.

Prior to the three straight weeks of declines, mortgage rates had increased for eight consecutive weeks. Many analysts were predicting future increases for mortgage rates up to within the 4.5 percent to 5 percent range by the end of 2017, especially following the Fed rate hike in December. But mortgage rates have gone the other direction. Mortgage rates hovered slightly above the record low of 3.31 percent (set in late 2012) for much of 2016.

About Author: Brian Honea

Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.
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