Mortgage Rates are still low

Freddie Mac released their weekly Prime Market Mortgage Survey (PMMS) today showing that last week, conforming mortgage rates were fairly steady after trending higher since the beginning of this year.

The mortgage rates quoted in the PMMS report are priced with some points and do not include closing cost.

Freddie Mac warns that rates could move higher if signs of inflation persists. From Freddie Mac’s PMMS report:

“Mortgage rates have been holding steady over the past two months. The U.S. weekly average 30-year fixed mortgage rate was 4.42 percent in this week’s survey. Rates have bounced around 4.4 percent since mid-February. Rates could break out and head higher if inflation continues to firm. The U.S. Bureau of Labor Statistics reported this week that the Consumer Price Index increased 2.4 percent over the 12 months ending in March, the largest 12-month increase in a year. Members of the Federal Reserve’s Federal Open Market Committee are looking at inflation indicators to help determine the appropriate path for policy.

“If inflation continues to trend higher, we may see two or three more rate hikes from the Fed this year, and mortgage rates could follow. For now, mortgage rates are still quite low by historical standards, helping to support homebuyer affordability as the spring homebuying season ramps up.”

As mortgage rates are based on bonds (mortgage backed securities), signs of inflation will push mortgage rates higher. Volatility with the stock market will impact rates too. When the markets are soaring, investors will choose stocks over bonds and when markets are tanking, mortgage rates tend to benefit as investors will seek the safety of bonds.  Another factor that influences the direction of mortgage interest rates is world events, such as the growing tension between Russia and the United States. Global dramas such as this tend to keep mortgage rates lower as investors prefer the safety of bonds during times of uncertainty.

Bottom line, if you have been considering refinancing, I would act sooner than later. In my opinion, the current volatility in the markets are simply slowing down the inevitably of higher mortgage interest rates.

If I can help you with a refinance or purchase of a home located anywhere in Washington state, I am happy to help you! Click here for a no-hassle mortgage rate quote.