U.S. mortgage rates fell this week after a comment from Federal Reserve chairman nominee Janet Yellen tipped off investors that the Fed will not likely rush to rein in stimulus or boost interest rates as manufacturing growth and inflation rates decline.
Testifying at a Senate Banking Committee hearing last week, Yellen endorsed the strategies of current Fed chairman Ben Bernanke (whose term will expire in January and whose position Yellen will take if confirmed). Yellen also said the benefits of the bond-buying program continue to outweigh the costs and the best way the Fed can counteract income inequality is to help the job market recover.
For the past two weeks, mortgage rates were rising. But this week the 30-year-fixed mortgage rate fell to 4.39 percent from last week’s 4.48 percent, and the 15-year-fixed mortgage rate fell to 3.42 percent from last week’s 3.49 percent, according to Bankrate.com’s weekly national survey, released Thursday. Adjustable mortgage rates fell also, with the popular five-year adjustable rate falling to 3.28 percent and the seven-year adjustable falling to 3.6 percent.
According to Freddie Mac’s Primary Mortgage Market Survey, the average 30-year-fixed mortgage rate fell to 4.22 percent, and the 15-year-fixed rate fell to 3.27 percent, both for the week ending Nov. 21. But Freddie Mac attributes the decline in rates to a 0.1 percent fall in industrial production and a 0.1 percent fall in the consumer price index in October.
“Fixed mortgage rates fell this week on reports of weaker manufacturing growth and declines in overall inflation rates,” Frank Nothaft, vice president and chief economist for Freddie Mac, said.
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On May 1, the average 30-year-fixed mortgage rate was 3.52 percent. A $200,000 loan then would have required a borrower to pay about $900 a month. With the current average rate at 4.39 percent, taking out the same-size loan now would require a monthly payment of about $1,000.