Average mortgage rates flatten behind falling oil prices and inflation

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After last week's surge of 11 basis points, mortgage rates held steady due to a dip in energy costs, even with continued stock market volatility, according to Freddie Mac.

30-Year FRM 15-Year FRM 5/1-Year ARM
Average Rates 4.94% 4.36% 4.14%
Fees & Points 0.5 0.4 0.3
Margin N/A N/A 2.77

For the week ending Nov. 15, the 30-year fixed mortgage rate held at the seven-year high of 4.94% it reached a week ago. At this time last year, the 30-year fixed-rate mortgage averaged 3.95%.

"Despite recent market volatility, mortgage rates remained steady this week. The stability in mortgage rates reflects the moderation in inflationary pressures in the economy due to lower oil prices and subdued wage growth," Sam Khater, Freddie Mac's chief economist, said in a press release. "On the margin, lower energy costs are a positive for the home sales market, particularly for lower-middle income suburban buyers who spend proportionately more income on transportation costs."

The 15-year fixed-rate mortgage averaged 4.36%, up from last week's average of 4.33%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.31%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.14% with an average 0.3 point, both staying static from last week. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.21%.

"Mortgage rates remained flat this week, as a relatively light week of economic news and data releases resulted in only modest movements," Aaron Terrazas, senior economist at Zillow, said when that company released its own rate tracker on Nov. 14. "A collapse in oil prices and continued stock market volatility prompted some softness in bond markets — primarily driven by the fear that it could spill over into lower inflation, putting expected Fed interest rate hikes on pause. Of course, cheaper oil prices could also spur consumer spending as Americans save at the pump."

This week's holding pattern in the mortgage rates could just be temporary, as forthcoming Fed hikes are expected.

"For the time being, markets don’t appear to expect a lasting impact on the American economy from these oil and stock market blips. Moving toward the December FOMC meeting, markets are likely to keep a close watch on speeches from several Fed officials, including Chairman Powell," said Terrazas.

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