Interest rates increased once again in anticipation that the Federal Reserve would increase interest rates Wednesday.
“As expected, the FOMC announced its first rate hike of 2017 and hinted at additional increases throughout the remainder of the year,” Freddie Mac Chief Economist Sean Becketti said. “Although our survey was conducted prior to the Fed’s decision, the release of the February jobs report all but guaranteed a rate hike and boosted the 30-year mortgage rate nine basis points to 4.3% this week.”
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(Source: Freddie Mac)
The 30-year fixed-rate mortgage increased to 4.3% for the week ending March 16, 2017. This is up nine basis points from last week’s 4.21% and up from 3.73% last year.
The 15-year FRM increased to 3.5%, up eight basis points from 3.42% last week and from 2.99% last year.
The five-year Treasury-indexed hybrid adjustable-rate mortgage increased to 3.28%, up from last week’s 3.23% and last year’s 2.93%.
After raising rates in December, when the Fed moved to raise rates from a range of 0.5% to 0.75%, the Fed elected to raise them another 25 basis points to a range of 0.75% to 1%. The Federal Funds Rate represents the overnight rate which financial institutions, such as banks, provide short-term lending to one another, and is a basis for capital markets liquidity.
“Increasing inflation, continued gains in the labor market and the Fed’s intentions for further rate increases—all three will keep pushing mortgage rates up this year,” Becketti said.