Surveys find mortgage rates holding steady

By Palm Beach Business.com

DELRAY BEACH  — Mortgage rates moved little over the past week despite fears that Fed policy would push them significantly higher.

Freddie Mac’s Primary Mortgage Market Survey spotted the average 30-year fixed-rate mortgage at 5.07 percent with an average 0.7 point, same as a week ago. A year ago, the 30-year averaged 4.80 percent.

Bankrate’s weekly national survey put the 30-year at 5.22 percent, with 0.42 point, up ever so slightly from the previous week’s 5.21 percent.

Palm Beach Business.com’s South Florida index sat at 5.09 percent, with an average 0.86 point. Rates ranged from Bank of America’s 4.875 with 1.125 points, to 5.25 percent at both Chase and TD Bank.

Three weeks ago, the Federal Reserve ended its $1.25 trillion mortgage buyback program, a move that was expected to push rates higher. Bankrate notes, however, that rates are barely changed. In those three weeks, rates for the 30-year actually dropped to 5.22 percent from 5.23 percent.

Bankrate says to keep mortgage rates low, the Fed may need to sharpen the rhetoric about raising interest rates when it becomes necessary to do so. If the Fed instead appears soft, investors could lose confidence in their willingness to keep inflation at bay and mortgage rates would quickly lose their anchor to these historic lows.

Bankrate's panel of mortgage experts is divided over the direction that rates will take over the next week. Nearly half, 47 percent, see rates rising, while 41 percent them pretty much staying put. The remaining 12 percent see a decline on the horizon.

Other rates: the 15-year averaged 4.39 percent with an average 0.6 point, down from last week when it averaged 4.40 percent, according to Freddie Mac. Bankrate put the 15-year at 4.55 percent with 0.42 point, down from 4.56 percent a week ago.

The 5-year adjustable-rate mortgage averaged 4.03 percent,  with an average 0.6 point, down from last week’s 4.08 percent.  Bankrate put it at 4.42 percent with an average 0.35 point, down from last week’s 4.48 percent.