A Federal Reserve monetary policy meeting is looming but mortgage rates are fearlessly moving slightly lower. In a survey of lenders early Monday, lenders repriced just enough to move the needle incrementally lower, on average. Without major economic news expected today, there is likely to be little catalyst for additional interest rate moves until the Fed’s Wednesday short-term rate announcement.
While short-term rate moves by the Fed don’t directly impact mortgage rates, the influence of a Fed rate hike among lenders is undisputed. Banks facing higher overnight borrowing costs are likely to pass those expenses along to consumers. And with many economists thinking the Fed will pass on a rate hike at this week’s meeting, any news otherwise would likely move mortgage rates immediately higher.
Meanwhile, in a survey of lenders early Monday, average rates for the most popular loan terms were hugging three-year lows:
Mortgage Rates: June 13, 2016
(Change from 6/10)
30-year fixed: 3.70% APR (-0.02)
15-year fixed: 3.07% APR (-0.01)
5/1 ARM: 3.34% APR (-0.01)
Lock or float your mortgage rate?
“With a more muted economy in view and with the world’s investors desperate to find positive yields for their investments, interest rates will find it hard to get any upward traction, and this will likely continue to be the case even if the Fed comes back ‘in play’ as we wend our way into summer,” Keith T. Gumbinger, vice president of mortgage information publisher HSH.com, wrote in an analysis emailed to subscribers Friday.
Of course, any decision to lock a mortgage rate should be based on the borrowers’ risk tolerance and their short- and long-term goals.
NerdWallet daily mortgage rates are an average of the lowest published APR for each loan term offered by a sampling of major national lenders. Annual percentage rate quotes reflect an interest rate plus points, fees and other expenses, providing a more accurate view of the costs a borrower might pay.