Bond market investors acted cautiously in the wake of next week's Federal Open Market Committee meeting and that likely resulted in mortgage rates moving lower this past week.
| 30-Year FRM | 15-Year FRM | 5/1-Year ARM | |
| Average Rates | 3.75% | 3.18% | 3.47% |
| Fees & Points | 0.5 | 0.5 | 0.4 |
| Margin | N/A | N/A | 2.75 |
The 30-year fixed-rate mortgage averaged 3.75% for the week ending July 25,
"Mortgage rates continued to hover near three-year lows and purchase application demand has responded, rising steadily over the last two months to the highest year-over-year change since the fall of 2017. While the improvement has yet to impact home sales, there's a clear firming of purchase demand that should translate into higher home sales in the second half of this year," Sam Khater, Freddie Mac's chief economist, said in a press release.
Some strong economic data released earlier in the week had little effect on mortgage rates as investors wait for the FOMC meeting, said Zillow economist Matthew Speakman when that company released its own rate tracker.
"Two economic reports which normally have moderate market influence — the Philadelphia Fed's manufacturing report and the University of Michigan’s consumer sentiment index — beat expectations earlier in the week, news that would usually nudge bond yields, and mortgage rates, upward. The reaction, however, was muted, and markets are unlikely to make any substantial moves ahead of next week's meeting of the Federal Open Market Committee," Speakman said.
The 15-year fixed-rate mortgage averaged 3.18%, down from last week when it averaged 3.23%. A year ago at this time, the 15-year fixed-rate mortgage averaged 4.02%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.47% with an average 0.4 point, down from last week when it averaged 3.48%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.87%.
But mortgage interest rates have likely bottomed out, Speakman said.
"The two-day (FOMC) conference has loomed large for weeks now, and many view a 25-basis point cut to the federal funds rate as a foregone conclusion. As a result, it's doubtful that rates, which remain near multi-year lows, will fall in the near future. Should the Fed decide to forego the much-expected rate cut next week, a sharp uptick in mortgage rates is almost certain," said Speakman.
