Chicago Homes: March Mortgage Interest Rate Report
Mortgage Rate News & Analysis
Long-term interest rates were largely stagnant in February, according to data from mortgage finance company Freddie Mac, as investors responded to mixed economic reports.
Mortgage rates at the beginning of the month took a dive to new record lows with the average 30-year fixed-rate mortgage (FRM) rate falling to 3.87 percent, excluding fees, from 3.98 percent the previous week. The 15-year FRM also declined, falling to 3.14 percent from 3.24 percent, but the one-year adjustable rate mortgage (ARM) rose to an average of 2.76 percent from 2.74 percent.
“Most mortgage rates eased to all-time record lows this week as fourth quarter growth in the economy fell short of market projections,” said Frank Nothaft, vice president and chief economist of Freddie Mac. “The Gross Domestic Product rose 2.8 percent in the final three months of 2011, below the market consensus forecast of 3.0 percent, while consumer spending in December was flat.”
There was very little change in interest rate during the next week, as the 30-year FRM was unchanged at 3.87 percent, the 15-year FRM inched up to 3.16 percent, and the one-year ARM fluctuated to 2.78 percent.
The situation further stagnated in the third week as both the 30- and 15-year FRM were unchanged and the one-year ARM rose to 2.84 percent.
“Fixed mortgage rates were unchanged this week amid mixed confidence measures,” Nothaft commented. “Small business confidence ticked up slightly in January, representing a fourth consecutive month gain, according to the National Federation of Independent Business index. However, the Reuters/University of Michigan index of consumer sentiment fell in February by more than the market consensus forecast breaking a five month trend.
By the last week, interest rates rose back to where they ended in January. The average rate on a 30-year FRM was 3.95 percent, the 15-year FRM grew to 3.19 percent, but the one-year ARM dropped to 2.73 percent.
What’s Next for Interest Rates?
With most major economic reports trending toward the slightly more positive, rates will most likely stay very close to their current position as they are tempered by a continued pessimism from the Federal Reserve.