A strong jobs report nudged mortgage rates higher, but a Fed decision to keep interest rates low, possibly through 2021, should keep mortgages affordable for a while.
NEW YORK – Freddie Mac reported on June 11 that the 30-year fixed-rate mortgage averaged 3.21% for the week – up three basis points from the week before. The 15-year fixed-rate mortgage and the five-year Treasury-indexed hybrid adjustable-rate mortgage were at 2.62% and 3.1%, respectively, both unchanged from the previous week.
Mortgage rates hit a fresh record low at the end of May when the 30-year rate dropped to 3.15%. but last week, they seemed primed to increase substantially in the wake of the better-than-expected monthly jobs report.
But will they?
The Federal Reserve indicated on June 10 that it will keep the federal funds rate steady at a range of 0% to 0.25% through at least 2021. Fed Chairman Jerome Powell also said the central bank will continue buying mortgage-backed securities “at least at the current pace,” meaning it will continue to pump liquidity into the mortgage market so lenders can offer low rates to attract borrowers.
“With no end in sight for this Fed policy, it’s likely that mortgage rates are poised to remain low for a while,” says Zillow Economist Matthew Speakman.
Source: MarketWatch (06/11/20) Passy, Jacob
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