Mortgage rates held steady this week as mixed economic news kept them in check. News of a strengthening labor market was offset by disappointing first-quarter growth in gross domestic product.
According to the latest data, released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 4.02 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 4.03 percent a week ago and 3.61 percent a year ago.
The 15-year fixed-rate average was unchanged at 3.27 percent with an average 0.5 point. It was 2.86 percent a year ago. The five-year adjustable rate average ticked up to 3.13 percent with an average 0.5 point. It was 3.12 percent a week ago and 2.8 percent a year ago.
“Markets have been erring on the side of caution following a weak advance estimate for first-quarter GDP and the broadly expected decision to leave rates unchanged,” Sean Becketti, Freddie Mac chief economist, said in a statement.
As expected, the Federal Reserve did not raise its benchmark rate when it met this week. It is widely anticipated that its next rate increase will come next month.
The Mortgage Bankers Association “continues to forecast that the FOMC will raise rates at its meeting in June and again in September,” said Lynn Fisher, MBA vice president of research and economics. “It also remains likely that the committee will begin allowing assets to run off their balance sheet by the end of the year, which, over time, may exert upward pressure on the spread between mortgage interest rates and Treasury yields. For now, the FOMC confirmed this week that it will continue reinvesting principal so as to maintain current balance sheet levels.”
Bankrate.com, which puts out a weekly mortgage rate trend index, found that more than two-thirds of the experts it surveyed expect rates to remain relatively stable in the coming week. Elizabeth Rose, branch manager at Movement Mortgage, is one who says rates are unlikely to change much.