Mortgage Rates Pull Back After Six Consecutive Increases

Mortgage Rates Pull Back After Six Consecutive Increases

06/20/2013 BY: TORY BARRINGER

Mortgage rates eased off a bit this week as the markets awaited word from the Federal Reserve on potential changes to its monetary policy.

The 30-year fixed-rate mortgage (FRM) averaged 3.93 percent (0.8 point) for the week ending June 20, according to Freddie Mac’s Primary Mortgage Market Survey—down from 3.98 percent the week before. Last year at this time, the 30-year FRM averaged 3.66 percent.

The 15-year FRM averaged 3.04 percent (0.7 point), down from 3.10 percent the prior week.

Adjustable rates showed similar trends. The 5-year Treasury-index hybrid adjustable-rate mortgage (ARM) averaged 2.79 percent this week (0.5 point), flat from last week. The 1-year ARM averaged 2.57 percent (0.4 point), down a single basis point.

“Mortgage rates were relatively unchanged this week as market participants awaited the Federal Reserve’s (Fed) monetary policy announcement,” explained Frank Nothaft, VP and chief economist at Freddie Mac.

Citing recent developments in economic growth (despite a still-high unemployment rate), the Fed announced it will continue its bond-buying program at the current pace.

Bankrate.com also observed a retreat in interest rates in its weekly national survey. The 30-year FRM slipped to 4.12 percent this week, while the 15-year fixed dropped to 3.30 percent.

Adjustable rates actually increased slightly in Bankrate’s survey, with the 5/1 ARM rising to an even 3.00 percent.

“Mortgage rates broke a 6-week streak of increases, with mortgage rates dipping slightly ahead of the much anticipated Federal Open Market Committee meeting,” Bankrate said in a release. “But the pullback may prove to be short-lived, given a sharp increase in long-term bond yields following some of Fed Chairman Ben Bernanke’s comments.”

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