The average rate for the 30-year fixed-rate mortgage in Freddie Mac’s latest survey rose by just one basis point to 3.52% despite notable run-ups in the stock market and rate-indicative Treasury yields during the week.
A run-up in the benchmark 10-year Treasury yield that as of Thursday morning had returned it to levels just below 2% at 1.98%, and the Dow’s increase to a record high on Tuesday, had put some upward pressure on the rate during the survey week ending March 7.
But inflation indicators remain fairly tame, suggesting ultimately the upward pressure on rates has been mild, according to Frank Northaft, Freddie Mac vice president and chief economist.
“With gross domestic product growing only 0.1% in the fourth quarter 2012, inflation remains at bay and consequently mortgage rates low,” he said in his weekly rate report. “In fact the price index of personal consumption expenditures rose only 0.1% in January, which was below the market consensus forecast.”
Although agency mortgage-backed securities prices have risen, leading some to question how much more expensive they could get and whether there are limits to the downward pressure this puts on rates, which move the opposite director, an executive at one investor thinks the trend may not be over.
American Capital Agency Corp. president and chief investment officer
For the time being, at least, rates remain relatively stable. While average 30-year FRM increased just one basis point from
Points during the most recent week averaged 0.7 of a point for FRMs, 0.5 of a point for five-year Treasury hybrids and 0.3 of a point for one-year Treasury ARMs.
A year ago, weekly rate averages were as follows: 3.88% for 30-year FRMs, 3.13% for 15-year FRMs, 2.81% for five-year Treasury hybrids and 2.73% for one-year Treasury ARMs.
