February 8th, 2016 7:16 AM by Jackie A. Graves, President
For the fifth consecutive week, mortgage rates
trended down, surprising even forecasters. The 30-year fixed-rate mortgage is
now at its lowest average since April 30, 2015.
"Market volatility -- and the associated
flight to quality -- continued unabated this week,” says Sean Becketti, Freddie
Mac’s chief economist. “The yield on the 10-year Treasury dropped another 15
basis points, and the 30-year mortgage rate fell 7 basis points as well, to
3.72 percent. Both the Treasury yield and the mortgage rate now are in the
neighborhood of early-2015 lows. These declines are not what the market
anticipated when the Fed raised the Federal funds rate in December. For now,
though, sub-4-percent mortgage rates are providing a longer-than-expected
opportunity for mortgage borrowers to refinance."
This week the market forecasted zero hikes in
2016 for the Fed’s short-term rates, which could keep mortgage rates low.
Analysts are now predicting that the closely monitored Fed Futures market has
nearly a 60 percent chance of no rate hikes at all this year, marking a
“dramatic U-Turn from only a month ago when the market was pricing in a 75
percent probability the Fed would increase rates at least once in 2016,”
CNN Money reports.
The Fed had risen rates 0.25 in December, its
first increase in nearly 10 years. But with stock markets spiraling downward
and the fragile global economy, analysts believe this will likely prompt the
Fed to pause in raising rates.
"Things have happened in financial
markets and in the flow of economic data that may be in the process of altering
the outlook for growth," Fed vice chairman Bill Dudley told MarketWatch
Freddie Mac reports the following national
averages with mortgage rates for the week ending Feb. 4:
mortgages: averaged 3.72 percent,
with an average 0.6 point, dropping from last week’s 3.79 percent average. A
year ago, 30-year rates averaged 3.59 percent.
mortgages: averaged 3.01 percent, with an average
0.5 point, falling from last week’s 3.07 percent average. Last year at this
time, 15-year rates averaged 2.92 percent.
adjustable-rate mortgages: averaged 2.85 percent,
with an average 0.4 point, falling from last week’s 2.90 percent average. A
year ago, 5-year ARMs averaged 2.82 percent.
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