We’re finally seeing some upward movement in mortgage rates, especially at the top end, where the 30-year mortgage rate crept to 4.663%, up from 4.529% last week, as measured by the BankingMyWay Weekly Mortgage Rate tracker http://www.bankingmyway.com/real-estate/mortgages.
One- and three-year adjustable rate mortgages also inched upward, as downward pressures eased on mortgage rates for the first time this summer (actually, since April 2010).
Rates have fallen because of weak economic indicators, which really haven’t grown any stronger in the past week (especially with jobless claims, which rose over the benchmark 500,000 level last week). So it’s probable that rates are either taking a breather before continuing their descent, or we’ve reached a bottom where rates will remain until the economic landscape crystallizes.
A big reason rates are remaining low is the absence of signs of inflation. Economists worry about the impact inflation could have on our economic recovery. They believe that as inflation raises the cost of living, central bankers must raise interest rates to keep inflation in check.
But that’s not the case right now, as economists don’t even see a glimpse of inflation on the economic horizon.
“Investors in long-term bonds appear very confident that inflation will remain in check, and as a result long-term fixed mortgage rates have continued to fall,” Amy Crews Cutts, deputy chief economist for Freddie Mac, said in a statement on Aug. 19. “This week marks the ninth straight week in the Primary Mortgage Survey that 30-year-fixed mortgage rates have met or set a new record low.”