Slowly Rising Mortgage Rates Still Close to Historic Low

The weekly Freddie Mac lenders survey revealed a very small increase of the mortgage rates on 30-year fixed loans for the week ending June 13th 2014. The rates increased for a second week in a row but they are unlikely to go up too much in the short term, despite the forecasts for this year. They still remain near the historic low.

The average rate on a 30-year fixed mortgage is currently 4.20%. It marked a 0.06% increase from the previous week when it was 4.14%. The increase is quite small and it is unlikely to put many buyers off. The average rate on the 15-year fixed mortgage loan followed the same trend. It went up to 3.31% from 3.23% during the previous week. Here the increase was slightly higher accounting for 0.8%.

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The experts attribute the increase in the mortgage rates primarily to the movements in the US bond market and more specifically in the market for Treasury notes. After the European Central Bank announced its plans to cut the interest rates in the EU, buyers flocked the US market. The increase in the yield of Treasury notes led to an increase in mortgage rates.

The plans of the Federal Reserve to cut back its purchase of mortgage bonds also put an upward pressure on the mortgage rates. However, this pressure is currently minimal. The announcement has already played its major roles. Besides, the Fed has firm intentions to keep the benchmark rate which determines mortgage rates at its historic low. The stability of the inflation rate also contributes to the rates on home loans gravitating around the historic low.

Overall, even though slight increases in the mortgage rates are possible in the coming weeks, they are likely to remain low. Considerable jumps like the one which occurred in mid 2013 are not expected. This can only favor prospect home buyers.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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