The HSH.com Weekly Mortgage Rates Radar announced that the interest rates on a number of mortgages increased for only the second time in 2016. The average interest rate on a thirty-year fixed mortgage increased by five points or 0.05 percent, for a total of 3.75 percent. The rates on a 5/1 Hybrid ARM went up by eight points, closing at 3.10 percent.
Labor markets started 2016 fairly low only to improve in February. While the international financial market has been unstable during the start of the year, the U.S. economy appears to be fairly stable. Although growth continues to remain fairly low, it does continue.
When it comes to the Federal Reserve and how this stable economy will affect it, opinions are divided. Some expect to see the Federal Reserve raise rates later in the year if the economy remains as it is. Others expect to see as many as four increases, while some aren’t certain the Fed will make any. Thanks to inflation metrics solidifying and financial markets staying relatively calm, though, it does appear that the Fed may increase rates by the middle of the year.
Keith Gumbinger, HSH.com vice president, expects that the upcoming Fed meeting will reveal new projections for inflation, growth, and interest rates but will most likely not result in any rate changes. Mortgage rates will most likely stay close to their yearly lows until June.