Mortgage Rates in Free Fall, After Fed’s Vote

The 30-year fixed-rate mortgage averaged 3.86 percent this week, dropping lower after the Federal Reserve’s decision last week to hold off on raising the Federal funds rate.

“Global growth concerns and lackluster inflation convinced the Fed to defer a hike in the Federal funds rate,” says Sean Becketti, Freddie Mac’s chief economist. “In response, Treasury yields fell about nine basis points over the week, with some larger day-to-day swings along the way.”

However, on Thursday, Federal Reserve Chair Janet Yellen said the U.S. central bank was on track to raise interest rates this year for the first time in nearly a decade. The Fed’s benchmark short-term rate has stayed near zero since December 2008, which has also helped to keep mortgage rates low ever since.

Freddie Mac reports the following national averages for the week ending Sept. 24:

  • 30-year fixed-rate mortgages: averaged 3.86 percent, with an average 0.7 point, dropping from last week’s 3.91 percent average. Last year at this time, 30-year rates averaged 4.20 percent.
  • 15-year fixed-rate mortgages: averaged 3.08 percent, with an average 0.6 point, dropping from last week’s 3.11 percent average. A year ago, 15-year rates averaged 3.36 percent.

Source: Freddie Mac and “Fed’s Yellen Gets Medical Attention After Struggling With Speech,” Reuters (Sept. 24, 2015)