Mortgage Rates Update – January 10, 2013

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Some market watchers may have expected further mortgage rate movement in the second week of January 2013, but instead the averages slowly floated downward a bit. Despite U.S. Treasuries suffering their own weaknesses as well as the bond market in general, mortgage rates were not affected very much as of Thursday. Most rates hovered in the same range of 3.375 percent to a flat 3.5 percent. The notable aspect is how little the recent general market uptick into January hasn’t brought up mortgage rates along with general investment buying. While the general stock market is now moving up to 13,400, mortgage rates generally stayed stagnant. That said, holding that position has recovered some of the point loss that occurred the week before.

For the professionals, the mortgage rates market is generally moving sideways without a commitment to falling down or firmly rising. However, no one expects the lateral moves to stay the same for any long period. With the federal government getting ready to put out additional, new regulations on mortgage lending, one group of critics expect the new rules to temporarily hurt borrowing by making it more restrictive. Others are looking at the bond market weakness and expecting the bond value drop to eventually start pushing mortgage rates upward.

So Thursday closed with 30-year rates fixed between 3.375 percent and 3.5, as mentioned earlier. 15-year fixed mortgage counterparts leveled off between 2.75 percent and 2.875. Finally, 5-year adjustable rate mortgages were on a broader range of 2.625 percent to 3.25 percent.

In the near term market outlook, federal government influence is expected to be the big mover of January and Spring rate changes. The Washington D.C. debt-ceiling negotiations continue to keep bringing up the issue of the mortgage interest tax deduction as a target for revenue-fixing, which isn't making middle class advocates happy. Additionally, continued government tinkering on mortgage-backed securities will impact rate-setting as well. So it's very likely how the Feds solve their latest tax and revenue issues will be the main trigger for large rate movement over the next few months versus any kind of consumer buying increase.

About John Krystof

John Krystof writes about personal finance and money matters for He was born and educated in Central Europe, but presently resides in New York City.

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