Experts Confounded by Rates

Mortgage Rates Keep Confounding Experts(January 6, 2006) --

Investor reaction to the minutes from last month's Federal Reserve policy-making meeting helped push the national average commitment rate on a 30-year, fixed mortgage down a notch to 6.21 percent this week from 6.22 percent a week ago, reports Freddie Mac.

The minutes suggested that the rate-raising initiative of the Fed could be coming to an end, according to Frank Nothaft, chief economist for the mortgage finance giant.

The national average commitment rate on a 15-year, fixed mortgage held steady at 5.76 percent, while the average rate on a one-year, adjustable-rate mortgage inched up to 5.16 percent from 5.15 percent.

Five-year hybrid ARMs, meanwhile, slipped to 5.78 percent from 5.79 percent.

While the average 30-year rate has fallen to its lowest level since late October, housing market observers are anticipating an increase in borrowing costs that they say will have a negative impact on home sales this year.

Source: Tacoma News Tribune (WA) (01/06/06); Aversa, Jeannine