"The average 30-year fixed mortgage rate rose six basis points to 5.97% in the week ending Jan. 22, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point. Weekly rates also averaged 5.97% in the week ending Jan. 1 and have remained relatively stable in the three weeks since, despite some daily volatility."
"At next week's Federal Reserve meeting on Jan. 28-29, central bankers are largely expected to hold the overnight borrowing rate steady. This is the rate that banks pay to borrow from each other (called the federal funds rate), which is how they fund loans like mortgages. When this rate changes, mortgage rates usually move in the same direction. Since analysts expect that this target rate is going to remain at 3.5%-3.75%, the Fed's inaction isn't likely to pull lenders too far away from current rates."
"This morning, the Bureau of Labor Statistics released the personal consumption expenditure report (PCE) for October and November. The report showed that inflation grew by 2.7% and 2.8% respectively year-over-year, inching further away from the Fed's goal of 2%. This combined with a slow-but-not-terrible job market means that the Fed doesn't have a good reason to cut rates right now - and might not cut again for the rest of this quarter."
Average 30-year fixed mortgage rates stood at 5.97% in the week ending Jan. 22, matching the average for the week ending Jan. 1 and showing little net change over three weeks despite daily swings. The Federal Reserve is widely expected to keep the federal funds target at 3.5%–3.75% at the Jan. 28–29 meeting, which should limit major mortgage rate moves tied to Fed action. PCE inflation rose 2.7% in October and 2.8% in November year-over-year, reducing near-term pressure for Fed rate cuts. Mortgage rates also move with 10-year Treasury yields, which respond to fiscal policy, growth outlooks and international events such as meetings in Davos.
Read at SFGATE
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