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Mortgage Rates Monday, Jan. 30: Lower; Fed Decision Looms

Jan. 30, 2017
Mortgage Rates, Mortgages
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Mortgage rates were mostly lower today. Thirty-year fixed and 15-year fixed rates fell, while 5/1 ARM rates remained steady, according to a NerdWallet survey of mortgage rates published by national lenders Monday morning.

Mortgage Rates Today,
Monday, Jan. 30

(Change from 1/27)
30-year fixed: 4.43% APR (-0.05)
15-year fixed: 3.82% APR (-0.03)
5/1 ARM: 3.84% APR (NC)

Futures market expects Fed to stand firm

The Federal Reserve will meet this week and announce a decision on short-term interest rates Wednesday. The futures market, where investors can hedge everything from the weather to the price of orange juice, is not expecting a rate hike during this meeting. The CME Group, a leading derivatives marketplace, shows a 96% probability that the Fed will stand pat on interest rates.

In fact, most traders aren’t looking for the Fed to make a move until its June 14 meeting, according to 30-day Fed Fund futures prices.

>> MORE: Calculate your refinance savings

The Fed last raised short-term rates at its December 2016 meeting. Fed rate adjustments don’t affect mortgage rates directly, but they can influence lender pricing over the long term.

On Dec. 15, the day after the last 0.25 percentage point Fed rate hike, 30-year fixed mortgage rates stood at 4.52%, according to the NerdWallet Mortgage Rate Index, a daily survey of mortgage lenders. Rates have been volatile ever since, but as of Friday, Jan. 27, they were slightly below that mark, at 4.48%, according to NerdWallet.

Mortgage rates had already begun trending higher, immediately after November’s presidential election.

Float or lock your interest rate?

“This week is extremely busy, with eight economic reports for the markets to digest, including two highly important releases,” Al Bowman, a mortgage rate analyst in Tampa, Florida, said in a report to clients Sunday. In addition to the Federal Reserve meeting, Bowman is tagging Friday’s Labor Department employment report as having the potential to move rates.

“We have something of importance set for each day of the week, making it likely that we will see plenty of movement in mortgage rates,” he added.

Bowman says that if he were considering financing or refinancing a home, he would lock his interest rate if his closing were to take place within seven to 20 days — and float his rate if the loan closing were scheduled for sometime beyond three weeks from now. He adds that this is his opinion and might not be in the best interest of other borrowers.

Homeowners looking to lower their mortgage rate can shop for refinance lenders here.

NerdWallet daily mortgage rates are an average of the published annual percentage rate with the lowest points for each loan term offered by a sampling of major national lenders. APR quotes reflect an interest rate plus points, fees and other expenses, providing the most accurate view of the costs a borrower might pay.

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Hal Bundrick is a staff writer at NerdWallet, a personal finance website. Email: [email protected]. Twitter: @halmbundrick.