Mortgage Rates React to Fed Chair Comments, But End the Week Flat Again
Mortgage rates drifted slightly lower late last week before picking back up this week. They are now roughly in line with where they stood last Wednesday, the second consecutive week of flat rates after steadily increases during the first six weeks of 2018.
The average prime 30-year fixed mortgage rate quoted on Zillow stands at 4.28 percent, just shy of four-year highs.
During his testimony before the House Financial Service Committee, Federal Reserve Chair Jerome Powell suggested that four rate hikes may be appropriate for the remainder of 2018 rather than the three that markets had anticipated. Markets responded by pricing in the probability of an additional rate hike in 2018. There is some uncertainty about the intent of the comments; Powell is scheduled to testify before the Senate Banking Committee on Thursday, where he could clarify his remarks.
Beyond the focus on Powell’s Thursday testimony, markets are also likely to watch comments from the presidents of the New York and Atlanta Federal Reserve Banks early next week. Both are voters on the Federal Open Market Committee this year, the first time voting for Raphael Bostic of the Atlanta Fed.
