Mortgage rates stay flat amid contained inflation

Author(s):

Megan Hopkins [1]

Main Image:

Mortgage rates remained relatively flat this week, dropping only slightly from the previous week, when rates reached a two-month high.

Homebuyer affordability remains high as mortgage rates go largely unchanged this week.

The 30-year, fixed-rate mortgage dropped slightly from last week [3] to 3.38% for the week ending Jan. 17. This rate is down significantly when compared to the 3.88% level recorded a year earlier, Freddie Mac said in its Primary Mortgage Market Survey.

"Mortgage rates were flat to down a little this week amid reports that inflation remains contained," noted Frank Nothaft, vice president and chief economist with Freddie Mac.

He added, "The overall producer price index rose 0.1% between November and December, below the market consensus forecast, and the consumer price index was unchanged. For the year as a whole, consumer prices rose just 1.7% in 2012, almost half that of 2011's increase of 3.0%."

The 15-year, fixed-rate mortgage remained completely unchanged from last week at 2.66%.

Additionally, the 5-year, Treasury-indexed hybrid, adjustable-rate mortgage came in at 2.67% this week, the same as last week and lower than the 2.82% rate recorded this time last year.

The 1-year, Treasury-indexed ARM averaged 2.57%, down slightly from 2.60% last week and even lower than the 2.74% average recorded a year earlier.

Click on the graph to view the week’s primary mortgage market survey results.

[4]

Bankrate data also shows mortgage rates reaching “high levels” for the beginning of the year, despite edging down this past week.

The Bankrate 30-year, FRM came in at 3.60%, down from 3.67% a week earlier. The 15-year, FRM also fell from 2.92% last week to 2.89% and the 5/1 ARM dropped to 2.74% from 2.77% last week.

mhopkins@housingwire.com