Mortgage rates dip, despite Fed rate hike
The average 30-year fixed rate mortgage fell slightly to 3.96% from 3.97% last week, despite the Federal Reserve’s recent decision to raise short-term interest rates from near zero for the first time in nearly a decade.
The decline, reported Thursday by mortgage giant Freddie Mac, means would-be homeowners are likely to face only a gradual rise of the historically low mortgage rates of the last several years as they navigate the real estate market.
Last week’s rate is slightly higher than the 3.83% average for a 30-year fixed rate mortgage at this time last year, Freddie Mac reported.
“Long-term interest rates will not spike in response to the Federal funds rate increase,” Sean Becketti, Freddie Mac’s chief economist, said in a statement issued with the weekly update. “While we expect the 30-year mortgage rate to be above 4% in early 2016, we anticipate rates will gradually increase, averaging 4.4% for the year.”