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With the election and the economy supposedly improving, the Fed raised rates in December. That was expected. With that raise also came an increase in mortgage rates. That was also expected. However, now that things have settled down a little, mortgage rates have once again come down a little.
According to Freddie Mac, the 30-year fixed rate dropped to 4.12%, with a half point, down from 4.20% last week. A year ago the 30-year fixed rate was 3.92%. Not that much lower than the current rate.
The 15-year rate dropped from 3.44% to 3.37 %, now being only slightly higher than a year ago when it was 3.33%. Surprise, surprise, rates are still at all-time lows.
According to the latest data from the Mortgage Bankers Association, even with rates falling mortgage applications increased up last week. The market composite index — a measure of total loan application volume — grew 5.8 percent from last week. The refinance index rose 4 percent, while the purchase index increased 6 percent.
This coupled with the recent FHA announcement to cut their annual MIP rate, indicates that things seem to be moving along just fine for the housing market and mortgage lending.
The outlook now is that the Fed may not raise rates at their next meeting and mortgage rates may remain relatively low and stable throughout 2017. But, does that indicate that the economy is not growing at a pace expected by the Fed? Is that a good thing?
- How might that affect employment, wage growth and the housing market going forward?
- Will the FHA annual MIP rate cut be enough to keep things moving?
- Will President-Elect Trump choose to reverse the FHA cut?
- What will the Fed do in their next meeting?
In the meantime, with rates still low go out and do some business. Home sales are up and at these rates there still may be a few homeowners looking to catch the refinance train. Maybe the announcement of the death of the refi was premature.
