Yellen’s Nomination Had Little Effect On Mortgage Rates

Posted by Patrick Barnard on October 10, 2013 No Comments
Categories : Residential Mortgage

What effect did President Obama's nomination of Janet Yellen as the next Federal Reserve chairman on Wednesday have on mortgage interest rates?

Not a heck of a lot.

Nor did congressional gridlock over the federal budget and the ongoing government shutdown have an effect. That is, unless you want to argue that a lack of housing data normally furnished by government agencies due to the shutdown helped stabilize rates.

But rates did budge upward slightly for the first time in four weeks.

According to Freddie Mac's Primary Mortgage Market Survey, the average rate for a 30-year fixed-rate mortgage increased a mere 0.7% for the week ending Oct. 10, reaching 4.23% compared to the previous week's 4.22%.

‘Mortgage rates were little changed amid the federal debt impasse in Washington, D.C., and a light week of economic data releases,’ says Frank Nothaft, vice president and chief economist, Freddie Mac. ‘Of the few releases, the private sector added an estimated 166,000 jobs in September, which were fewer than the market consensus and followed a downward revision of 17,000 workers in August, according to the ADP Research Institute. The Institute for Supply Management reported a greater slowing in growth in non-manufacturing industries in September than the market consensus forecast.’

A year ago at this time, the average rate for a 30-year fixed-rate mortgage was 3.39%.

The average rate for a 15-year fixed-rate mortgage (FRM) was 3.31% – an increase of 0.7% compared to the prior week's 3.29%. A year ago at this time, the 15-year FRM averaged 2.7%.

The average rate for a five-year, Treasury-indexed, hybrid, adjustable-rate mortgage (ARM) averaged 3.05% – an increase of 0.4% from the previous week's 3.03%. A year ago, the five-year ARM averaged 2.73%.

The average rate for a one-year Treasury-indexed ARM averaged 2.64% – an increase of 0.4% from last week's 2.63%. At this time last year, the one-year ARM averaged 2.59%.

The Freddie Mac data is in line with data culled from Zillow's Mortgage Marketplace, which showed, as of Tuesday, that interest rates for 30-year fixed-rate mortgages rose for the first time in four weeks.

Again, the increase was moderate: The average rate for a 30-year fixed-rate mortgage increased to 4.11%, up slightly from 4.08% a week earlier. The rate hovered between 4.06% and 4.09% for the majority of the week before rising to the current rate Tuesday morning, according to Zillow.

‘Last week, rates were essentially unchanged as the government shutdown postponed release of much of the economic data that guides markets,’ says Erin Lantz, director of mortgages at Zillow. ‘This coming week, we expect rates will remain paralyzed until the impasse in Washington is resolved and economic data can be released.’

According to Zillow's data, the average rate for a 15-year fixed-rate home loan is currently about 3.17%, up from 3.12% the previous week. The average rate for a 5-1 ARM is about 2.92%, slightly above last week's 2.9%.

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