After the Federal Open Market Committee failed to raise interest rates in its September meeting, investors flocked to safer grounds, and pushed the 30-year mortgage to a 10-week low.
“Investors flocked to the safety of government bonds causing the 10-year Treasury yield to continue its descent following the FOMC’s decision to leave rates unchanged,” Freddie Mac Chief Economist Sean Becketti said. “The 30-year fixed-rate mortgage responded by dropping six basis points before landing at 3.42%—a ten-week low.”
At the conclusion of its meeting, the FOMC announced it decided not to raise interest rates in September.
While the committee said that the case for an increased has strengthened, they decided to wait for further evidence on continued progress towards its objectives.
Click to Enlarge
(Source: Freddie Mac)
The 30-year fixed-rate mortgage decreased to 3.42% for the week ending September 29, 2016. This is down from last week’s 3.48% and last year’s 3.85%.
The 15-year FRM also decreased to 2.72%, down from last week’s 2.76% and last year’s 3.07%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage, on the other hand, increased to 2.81%. This is up from last week’s 2.8%, but still down from last year’s 2.91%.
“The course of the economy is uncertain, yet consumers continue to be a bright spot,” Becketti said. “The September consumer confidence index is up 3% to 104.1, exceeding forecasts and reaching a new cycle high.”
Consumer confidence hit its highest level in nine years, right about when the last recession began, according to the Consumer Confidence Survey conducted by The Conference Board by Nielsen, a provider of information and analytics around what consumers buy and watch.