Economic Report: Mortgage rates drop in opening week of 2018
Mortgage rates declined in the first week of 2018, even as most analysts believe they’ll move higher in coming months.
The 30-year fixed-rate mortgage averaged 3.95% in the week ending January 4, Freddie Mac said Thursday. That was down from 3.99% in the prior week. The 15-year fixed-rate mortgage averaged 3.38%, down six basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.45%, down from 3.47%.
Most analysts expect the tax bill, and an improving economy, to stoke faster inflation, making bonds less attractive — and nudging rates higher. Bond yields rise as prices fall.
“With the FOMC minutes showing continued support for gradual increases in policy rates from many participants and inflation rates remaining low, there isn’t much upward pressure on long-term rates at the moment,” Freddie’s deputy chief economist, Len Kiefer, noted in a release.
The difference between the 30-year fixed- and 5/1 adjustable- rate mortgages is the lowest since 2009, Kiefer added.