According to the latest Freddie Mac PMMS Mortgage Survey, the average 30-year-fixed rate mortgage fell one basis point from the previous week to 3.55% for the week ending January 27th, 2022. However, it is essential to note that the 30-year fixed-rate mortgage averaged 2.77% a year ago, while most analysts expect rates to continue to rise in the coming weeks and months.
Mortgage rates increased in lockstep with the 10-year Treasury yield, which hit 1.85% on January 26th, up from 1.83% on January 19th. The likelihood of rising mortgage rates is based on the Federal Reserve’s decision to raise interest rates. The central bank indicated on January 26th that it would happen “soon,” though no specific date has been given. The Federal Open Markets Committee (FOMC) said in a statement that with inflation well above 2% and a healthy job market, it anticipates it will be prudent to raise the federal funds rate target range soon.
The FOMC opted to leave the federal funds rate target range at 0 to 0.25%, although it will most likely act on rates in early March. The PMMS study focuses on conventional, complying, fully amortizing home purchase loans for borrowers with excellent credit and a 20% down payment. In the week ending January 21st, the average 15-year fixed-rate mortgage was 2.80%, up from 2.79% the week before. It was 2.20% a year ago at this time. Mortgage applications fell 7.1% for the week ending January 21st, according to the Mortgage Bankers Association (MBA). To read more on the fluctuations in mortgage rates, click here.
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