Although the U.S. government runs the risk of defaulting on its debt obligations for the first time in history, mortgage rates – for the most part – have not moved much the past week or so.
According to Freddie Mac’s weekly survey, 30-year rate fixed-rate mortgages averaged 4.55% for the period ending July 28, up just three basis points week-over-week. According to the GSE, 15-year FRMs averaged 3.66% (unchanged) with one-year Treasury ARMs falling two basis points to 2.95%. (Points offered on these loans hardly budged.)
Freddie Mac vice president and chief economist Frank Nothaft said in his weekly report that rates continue to reflect mixed economic signals.
Meanwhile, a survey conducted by LendingTree.com, showed week-over-week declines in all rates.
LendingTree senior vice president Mona Marimow told this publication that rates could become volatile to higher next week as debt ceiling discussions come to a head -- something that could cause some borrowers to rush to market ahead of the deadline.
She added that an actual default on U.S. debt is extremely unlikely, adding that the U.S. “has raised the debt ceiling many times but has never defaulted.”
But she said in a worst-case scenario there is a risk that rates could rise, with other concerns popping up – such as the unwillingness of lenders to make loans.
