Mortgage Rates Decline For Second Consecutive Week
Mortgage rates declined for the second consecutive week amid recent data showing softening in the housing market. Fixed mortgage rates are at their lowest levels since June. Mortgage rates have stayed down after reaching a four-month low last week, as investors kept their eyes on the Federal Reserve.
Mortgage Rates For The Week Of 10/31/2013
- 30-Year Fixed Rate Mortgage – The 30-year FRM averaged 4.10% with an average 0.7 in points & fees for week ending 10/31/2013, down from 4.13%. Last year at this time, the 30-year FRM averaged 3.39%.
- 15-Year Fixed Rate Mortgage – The 15-year FRM averaged 3.20% with an average 0.7 in points & fees for week ending 10/31/2013, down from 3.24%. Last year at this time, the 15-year FRM averaged 2.74%.
- 5-Year Adjustable Rate Mortgage – The 5-year ARM averaged 2.96% with an average 0.4 in points & fees for week ending 10/31/2013, down from 3.00% last week. Last year at this time, the 5-year ARM averaged 2.74%.
- 1-Year Adjustable Rate Mortgage – The 1-year ARM averaged 2.64% with an average 0.4 in points & fees for week ending 10/31/2013, up from 2.60% last week. Last year at this time, the 1-year ARM averaged 2.58%.
The lower trending rate are however not expected to last. The rate on the most popular type of loan is expected to rise to 5% next year and the volume of loans from homeowners refinancing their loans could drop by more than 50 percent according to a recent forecast.
The 30-year fixed rate will likely average 4.6% in the first quarter of 2014 and climb to 5% by the third quarter, Mortgage rates might start rising when the Federal Reserve announces it will scale back on the bond-purchasing program that has long helped keep mortgage rates artificially low.
The mere hint that the Fed was preparing to cut back on the stimulus program was enough to make rates spike over the summer as rates climbed by more than a percentage point after the announcement that the Fed could slow the pace of bond purchases this year.
The Fed has held off on that plan because the economy hasn’t performed as well as expected. The central bank will likely begin tapering the $85-billion-per-month stimulus program in early 2014.