Mortgage rates moved higher this week apparently in anticipation of news regarding future rate hikes coming from Fed at the end of their two-day Fed meeting on Wednesday.  The disappointing jobs report produced last week is now a thing of the past that did not have a lasting impact on interest rates with mortgage rates rising or moving sideways every day following the report.

The prospect that mortgage rates will likely remain low for the foreseeable future is becoming a bit cloudy as market expectations seem to be focusing on a Fed rate increase in the early part of next year.  This is purely market speculation.

October is the month that should be the end of the Fed’s monetary easing via outright Treasury and mortgage bond purchases but, calling for a rate increase would seem to be a bit premature at this point.  The market has become accustomed to the Fed’s bond buying since the program has kept interest rates at historical lows since 2008.

As for current mortgage rates, the benchmark 30 year fixed-rate mortgage coming from the nation’s largest bank mortgage lenders rose to 4.320 percent from 4.183 percent last week, according to the national survey of mortgage rates.

30 year fixed rate jumbo loan rates rose to 4.225 percent from 4.058 percent.  FHA mortgage rates with a 30 year term increased to 4.038 percent from 3.933 percent

Among the mid and short term mortgage loan options, the 15 year fixed rate mortgage rose to 3.519 percent from 3.402 percent.  20 year mortgage rates were lifted to 4.088 percent from 3.900 percent.  The ten year term home loan rates ended the week at 3.278 percent from 3.074 percent in the previous week.

Numerous forces are acting to keep mortgage rates in check including the actions by the Fed, making an increase in rates over the coming months far from conclusive.  Local and international investors that are seeking a safe haven for their money in times of economic and political uncertainty invest in U.S. Treasuries.

The flow of funds into Treasuries pushes up Treasury prices, which pushes the rates and yield lower.  Mortgage rates tend to track the 10-year Treasury yield and move lower as well.  Inflation is also a key component of interest rates and while the average consumer is feeling a bit of pinch, the official numbers show inflation below expectations.

Whether or not these conditions will reverse course in the ensuing months is anyone’s guess.

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