Yesterday Dr. Janet Yellen chaired her last fed meeting of the Federal Open Market Committee. The committee is part of the Federal Reserve leadership and they chose to keep rates unchanged. Dr. Yellen passed the gavel to Trump nominee and incoming chair, Mr. Jerome Powell. Yellen is an Obama appointee and since 2014 has served as chair. The move was expected and even though the discount rate did not change there is speculation for increases as we move into the year. The economy continues to move in a positive direction and it is the Fed’s mandate to manage monetary policy.
On the mortgage side of consumer finances, the benchmark 30-year fixed rate mortgage continued to rise. In week over week reporting from the Freddie Mac primary market rate survey rates moved up seven basis points to 4.22%. The increase in rates was expected based on economic conditions. While consumer confidence also continues to improve the jump in rates affects affordability, especially for those on the margins where qualifying for a mortgage could be trickier.
Seven basis points represents almost 1/8th of a percent and while the movement is up there is no need for alarm as movement is based on a normal cyclical flow. As a comparison in year over year reporting, this year’s rate of 4.22% is just three basis points from last year which was 4.19%
Snapshot of popular programs
February 1, 2018
|30-Yr FRM||15-Yr FRM||5/1-Yr ARM|
|Fees & Points||0.5||0.5||0.4|