Following last week's historic jump in mortgage rates – prompted by the Federal Reserve's June 19 announcement that it would begin winding down its stimulus program starting in the fourth quarter, providing economic data is favorable – the average fixed rate ticked down slightly to 4.29% this week from 4.46% last week, according to Freddie Mac.
Mostly as a result of the Fed's announcement, rates on fixed 30-year mortgages surged 12 basis points to average 4.58% in the week ending June 28, according to the Mortgage Bankers Association.Â Â
‘Rates remain near historic lows, and home buyer affordability remains strong for the typical family in most parts of the country, which should help fuel the ongoing housing recovery,’ Freddie Mac said in its Primary Mortgage Market Survey.
Frank Nothaft, vice president and chief economist for Freddie Mac, said concerns over the timing of the Fed's announcement have ‘eased somewhat.’
‘Rates are still low by historical standards and should continue to aid in housing affordability and the ongoing recovery of the housing market,’ Nothaft said. ‘For instance, pending home sales rose 6.7 percent in May to the strongest pace in over six years. In addition, residential construction spending increased in four of the first five months this year.’