The Federal Reserve did not hike rates this week, but the market views future hikes as a near certainty. The expectation of future Fed rate hikes and increased borrowing by the U.S. Treasury is putting upward pressure on interest rates.
Treasury yields fell from a week ago, helping to drive mortgage rates down to start the year. The 30-year fixed-rate mortgage fell 4 basis points from a week ago to 3.95 percent in the year’s first survey. Despite increases in short-term interest rates, long-term interest rates remain subdued. The 30-year mortgage rate is down a quarter of a percentage point from where it was a year ago and the spread between the 30-year fixed and 5/1 adjustable rate mortgage is the lowest since 2009.
Freddie Mac is projecting smooth sailing for the U.S. real estate economy, according to its 2018 Economic Research Outlook released last week.
