Two events are looming that could move mortgage rates higher, but today neither were a factor. In a survey of lenders early Tuesday, average rates edged even closer to all-time lows.
Tomorrow, the Federal Reserve announces its decision on short-term interest rates. Most analysts are expecting the Fed to stand pat. And next week, a referendum in Britain on whether or not to remain in the European Union could influence mortgage rates. A British exit from the EU — a so-called “Brexit — could rock global markets.
Both outcomes are nearly impossible to predict. For example, Fed Chair Janet Yellen has consistently maintained that the central bank’s Federal Open Market Committee will move ahead of economic indicators, not behind.
“Because monetary policy affects the economy with a lag, steps to withdraw this monetary accommodation ought to be initiated before the FOMC’s goals are fully reached,” Yellen said in a speech before The World Affairs Council of Philadelphia last week.
In spite of the uncertainty, of the lenders who repriced their terms, all were lower, and just enough to nudge overall averages down a tick or two. In a survey of lenders early Tuesday, average rates for the most popular loan terms were maintaining three-year lows:
Mortgage Rates: June 14, 2016
(Change from 6/13)
30-year fixed: 3.69% APR (-0.01)
15-year fixed: 3.05% APR (-0.02)
5/1 ARM: 3.33% APR (-0.01)
Lock or float your mortgage rate?
Mortgage rate observers quoted in this space have consistently forecasted little change in rates through the prime homebuying season, and in fact, through the end of the year. However, short-term spikes caused by unforeseen national or world events can upend even the most rational outlook. Interest rates, now at three-year — and nearing all-time — lows are undoubtedly favorable.
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.