Mortgage rates will stay near historic lows next year
The company’s weekly rate report said a 30-year fixed-rate mortgage averaged 3.97 percent in the week ending Dec. 17, up from 3.95 percent last week. A year ago, 30-year rates averaged 3.80 percent.
On Wednesday, the Federal Reserve raised its benchmark interest rate a quarter of a percent, the first time in seven years that rate has increased.
“We take the Fed at its word that monetary tightening in 2016 will be gradual, and we expect only a modest increase in longer-term rates,” said Freddie Mac (OTC: FMCC) chief economist Sean Becketti. “Mortgage rates will tick higher but remain at historically low levels in 2016.”
A 15-year fix averaged 3.22 percent this week, up from 3.19 percent last week. A one-year adjustable-rate mortgage averaged 2.67 percent, up from 2.64 percent.
Freddie Mac expects home sales to remain strong in 2016, though it says refinance activity will slow.