Mortgage rates resumed moving downward this week, baking in bond market expectations of a favorable inflation report, Freddie Mac said. It is the first drop in rates in three weeks.
The 30-year fixed rate mortgage averaged 6.33% for the week of Jan. 12, down 15 basis points from
Rates dropped slightly more for the 15-year FRM, down 21 basis points to 5.52% from the prior week's 5.73%. Last year, it averaged 2.62%.
"While mortgage rates have resumed their decline, the market remains hypersensitive to rate movements, with purchase demand experiencing large swings relative to small changes in rates," said Sam Khater, Freddie Mac chief economist in a press release. "Over the last few weeks latent demand has been on display with buyers jumping in and out of the market as rates move."
Purchase application activity last week fell to
Zillow's mortgage rate tracker, based on offers made through the site, has the 30-year FRM at 5.93% on Thursday morning, down 23 basis points from 6.16% one week ago.
"A slew of incoming economic data point to falling inflation and a rapidly slowing U.S. economy, which investors suspect will cause the Federal Reserve to pause, or even reverse, their program of interest rate hikes," Orphe Divounguy, senior macroeconomist at Zillow Home Loans, said in a statement issued Wednesday night.
The next Federal Open Market Committee meeting is scheduled for Jan. 31 and Feb. 1. Expectations are for
The Consumer Price Index declined 0.1% on a month-to-month seasonally adjusted basis in December but increased 6.5% compared to one year prior, the Bureau of Labor Statistics reported Thursday morning. That was within investors' expectations and for the most part, the markets reacted favorably.
The 10-year Treasury yield, a benchmark for pricing mortgages fell 17 basis points to 3.55% on Wednesday from 3.72% on Jan. 5. After the CPI release, it was down another 5 basis points to 3.5% at noon eastern time Thursday.
