Mortgage Rates Lower than Last Year, Expected to Go Up in 2015

mortgage-rates

After continuous decrease, the mortgage rates hit their lowest level for the month of June 2014. They are considerably lower than they were during the same week of 2013. This drop coincides with predictions that the Federal Reserve will increase interest rates by the middle of 2015.

The average rate on a 30-year fixed mortgage during the week ended June 26th was 4.14%, according to data produced by Freddie Mac. It fell by 0.03% from the previous week when it was 4.17% to reach its lowest level for the month. The current average rate is 0.32% lower than it was during the same week of 2013. Back then, it stood at 4.46%.

The average rate on a 15-year fixed mortgage also fell during the week ended June 26th. It dropped down to 3.22% from 3.30% in the previous week. Now it is 0.28% lower than it was a year ago when it stood at 3.50%.

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The average rate on a 1-year adjustable rate mortgage pegged against the Treasury index was 2.40% in the week ended June 26th. It went dropped down by 0.01% from the previous week when it was 2.41%. Currently, it is 0.26% lower than during the same week of 2014 when it was 2.66%.

Analysts explain that the main reason behind the falling mortgage rates is the weaker than expected performance of the economy during the first quarter of 2014. GDP fell by 2.9%. While a decrease was expected, its size was projected to be smaller. The slower increase in home prices during the spring and the poorer than expected performance of the housing market during the first quarter also played a role.

The downward trend in mortgage rates coincides with forecasts made by leading economists that the Fed will increase interest rates by mid 2015. They expect an increase in the interest rates between 2% and 4%. This will have an upward impact on the mortgage rates as well.

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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