Mortgage Rates Climbing

Mortgage rates moved higher last week as markets sort out what the Federal Reserve will do. Freddie Mac reported last Thursday that the average 30-year fixed rate was 3.98 percent compared to 3.91 percent the week prior. Retail Sales and Industrial Production came in near expectations. There was some market chatter regarding inflationary pressures, however, they were only slightly below the Fed’s inflationary targets.

This week could be a very significant week for mortgage rates. The Federal Open Market Committee will meet on Tuesday and Wednesday, followed by a news conference by Fed Chairman Ben Bernanke. Bernanke had said on May 22 that the Fed could reduce the pace of QE in the “next few meetings,” sparking a global bond and stock selloff. Consensus is building that the time is soon approaching when the U.S. central bank will scale down its quantitative easing policy. If the Fed decides to begin tapering its monetary support, mortgage rates are sure to climb.

Click image for larger view.

mortgage rates

Leave a Reply

You must be logged in to post a comment.