Compare Home Equity Loan Rates and Lenders

Although the Federal Reserve left interest rates unchanged at its September meeting, its move to start unwinding its balance sheet by selling U.S. treasuries and mortgage-backed securities as well as its confirmation of a rate hike before the end of the year pushed mortgage rates higher across the board.  Mortgage rates had been on a multi-week low streak and although the Fed kept the federal funds rate steady at 1.000% to 1.250%, the decision to start its previously announced balance sheet shrinking program in October moved treasury yields higher and mortgage rates followed suit.

In its September statement, the Fed highlighted labor market strength, improving household spending and growing business investment as offsets to declining inflation in deciding to keep the federal funds rate unchanged.  The Fed's decision to start unwinding its balance sheet in October as well as the uncertain impact of the Fed ramping up activity over several months pushed mortgage rates higher. 

The interest rate for a 30 year fixed rate mortgage increased .125% to 3.750% and jumbo mortgage rates also moved higher to  3.875%.  The interest rate for a 15 year mortgage rose .125% to 3.000%.  The interest rate on a 5/1 adjustable rate mortgage (ARM) also edged higher to 2.875%, remaining attractive to borrowers focused on shorter-term mortgage programs.  VA mortgage rates and FHA mortgage rates also inched .125% higher to 3.375% with both programs remaining attractive for home buyers seeking low or no down payment loan options.  Consistent with the overall trend, non-owner occupied mortgage rates moved .125% higher to 4.000%.  

This week's rise in mortgage rates snapped a month-long trend of very low and unusually steady market conditions and reinforces that rates are highly challenging to predict.  Although the Fed did not change rates, its economic outlook or forecast for future rate hikes, its actions increased market uncertainty which usually leads to higher mortgage rates.  Despite the increase, mortgage rates remain near historical lows and borrowers should consider taking advantage of favorable lending conditions.  With a rate hike expected before year end as well as three more anticipated hikes in 2018, prospective borrowers looking to buy a home or refinance their mortgage may be able to lock in a lower interest rate by acting sooner rather than later, before mortgage rates rise again, potentially at an accelerated pace.

Because mortgage rates change daily, we continue to actively monitor the mortgage market for changes.  Borrowers should check the FREEandCLEAR mortgage rate tables regularly to review customized, updated mortgage rates for lenders in their area.  Our rate tables are free to use and require no personal information.