Mortgage Rates Largely Unchanged This Week

By:: Kara Johnson | September 23, 2010

Mortgage rates were largely unchanged this past week, despite signals that the Federal Reserve may take new steps to reduce the cost of credit and boost the economy.

Average rates on both 30-year and 15-year fixed-rate mortgages were unchanged from last week, according to the weekly Freddie Mac Primary Mortgage Market Survey, released this morning. Rates on the 30-year loan remained at 4.37 percent, while the 15-year loan remained at 3.82 percent, the lowest ever reported in the survey.

Average initial rates on the 5-year Treasury indexed adjustable rate mortgage declined a single basis point to 3.54 percent, with 0.6 points in origination fees and discounts. The 30- and 15-year loans averaged 0.7 points.

“In its September 21^st policy committee statement, the Federal Reserve indicated that the pace of recovery in output and employment has slowed in recent months,” said Frank Nothaft, Freddie Mac chief economist. “In addition, inflation was at levels somewhat below its comfort zone. The perception of slow growth and low inflation removed any upward pressure on fixed mortgage rates this week.”

In its statement, the Fed said it is prepared to “provide additional accommodation” to support the economy and a desirable rate of inflation. The statement was largely taken to indicate the Fed is growing concerned with the prospect of dangerous deflation and may therefore take action to boost the money supply and free up credit.

Such an action could mean that mortgage rates will remain at historically low rates or even decline further for the foreseeable future. Mortgage rates fell sharply in Spring 2009 after the Fed took aggressive action to boost lending and support the housing market, but any further actions are expected to be far more moderate.

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National Rates

Loan Type	Today	+/-
30 yr fixed	3.72
15 yr fixed	3.03
5/1 ARM	2.75

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