Mortgage rates hold steady as Fed hike already priced in

by Francis Monfort18 Dec 2017
Mortgage rates were relatively flat across the board for the week ending Dec. 14 as long-term interest rates had already priced in the widely expected hike in the Federal Reserve’s federal funds target rate, according to new data from Freddie Mac.

Rates for the 30-year fixed-rate mortgage averaged 3.93%, with an average 0.5 point, down from the 3.94% average in the previous period. On a year-over-year basis, the average rate decreased from 4.16%.

The 15-year fixed-rate mortgage had an average rate or 3.36%, with an average 0.5 point, unchanged from the prior period. The average rate compares to the 3.37% average recorded in the same period in 2016.

The average rate for the 5-year Treasury-indexed hybrid adjustable-rate mortgage was 3.36%, with an average 0.3 point, an increase from the 3.35% average in the previous period. A year ago at this time, the 5-year ARM averaged 3.19%.

“As widely expected, the Fed increased the federal funds target rate this week for the third time in 2017,” Freddie Mac Deputy Chief Economist Len Kiefer said. “The market had already priced in the rate hike, so long-term interest rates, including mortgage rates, hardly moved. Mortgage rates held relatively flat across the board, with the 30-year fixed mortgage rate inching down one basis point to 3.93% in this week's survey. Mortgage rates have been in a holding pattern for the fourth quarter, remaining within a 10-basis-point range since October."


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