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‘Low and Slow’ Summer Mortgage Rates Retreat Slightly

It has been a summer of little movement for average fixed mortgage rates, which have been hovering right above all-time lows for several weeks. The average 30-year FRM has been below 4 percent for more than eight months.

Freddie Mac’s Primary Mortgage Market Survey (PMMS) for the week ending August 18, 2016, indicated that the average 30-year FRM dipped by 2 basis points down to 3.43 percent, erasing the previous week’s uptick. The average 15-year FRM also inched downward by 2 basis points down to 2.74 percent. Freddie Mac reported that the average 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) bumped up by 2 basis points to 2.76 percent.

“Ahead of the release of the FOMC minutes for July, 10-year Treasury yields were little changed from the prior week,” Freddie Mac Chief Economist Sean Becketti said. “The 30-year fixed-rate mortgage fell 2 basis points to 3.43 percent this week, erasing last week's uptick. For eight consecutive weeks mortgage rates have ranged between 3.41 and 3.48 percent. Inflation is not adding any upward pressure on interest rates as the Bureau of Labor Statistics reported that the Consumer Price Index was unchanged in July.”

HSH.com’s Weekly Mortgage Rates Radar for the week ending August 18 indicated similar movement and a similar rate. HSH reported that the average 30-year FRM dropped by 2 basis points down to 3.50 percent. In HSH’s report, the 5/1 hybrid ARM dropped by 3 basis points down to 2.88 percent.

According to HSH, the average FRM has moved within a range of 6 basis points in the last seven weeks after falling by 17 basis points in June.

“Summer doldrums in the financial markets seem to be fully in place at the moment,” said Keith Gumbinger, vice president of HSH.com. “Mortgage rates have moved very little since the calendar turned July, when economic signals started changing from the mixed-to-softer pattern of the spring to a mixed-to-stronger one for the summer. This has been sufficient to keep rates from falling or rising, so stasis it is.”

Gumbinger added, “Low and slow is usually a term applied to barbecue, but it also seems to apply to mortgage rates this summer. That's a good thing for mortgage shoppers, who strongly prefer no surprises while trying to get deals in place. Summer's end in a few weeks may quicken the pace of change, but lazy rates are perfect for the lazy days of late summer, so enjoy them while the season lasts.”

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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