Releases Mortgage Rates Update - Fed Helps Rates Stay Steady

Share Article releases latest weekly analysis of mortgage rates for the third week of January 2012 which finds that interest rates have remained at record low rates thanks to Fed actions and tame inflation.

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The weekly mortgage rate report found that last week mortgage interest rates remained steady and the trend is likely to continue thanks mostly in part to the economic situation in Europe.

With the real estate industry expected to show some slight improvements this week, now is no time for mortgage rate increases. The Fed knows this and is doing their part to squelch upward movement by buying mortgage bonds. When bond buying is strong interest rates remain low and the Fed's actions are keeping the traders' interests up. This and Europe's economic state is the primary reason for mortgage rates staying steady since last week.

Current interest rates are:

         4.18% - average rate for a 30-year fixed rate mortgage
         3.38% - average rate for a 15-year fixed rate mortgage

Most of the economic activity and reports that affect mortgage rates in the U.S. is happening late in the week, partially due to the week opening with a holiday. The Producer and Consumer Price Index inflation reports came out Wednesday and Thursday showing that inflation hasn't occurred at the consumer level and dropped by .1% for wholesale prices. This is good news in the mortgage interest industry since increase in inflation often equates to higher rates.

Employment and spending numbers were also optimistic with spending and manufacturing up and unemployment claims down this week to the lowest level since April 2008. These trends are keep stocks from dropping and signaling signs of economic recovery in the U.S.

This week housing reports are also released which directly show how the real estate industry is fairing. The Housing Starts report released Thursday showed a 4.1% drop in December, however builder sentiment was stronger in January. They remain optimistic because single-family home starts did increase by 4.4%. The Existing Home Sales report due out today is predicted to show continued signs of recovery. is forecasting that with the Fed keeping mortgage bond buying in action, the EuroZone still in economic uncertainty and desire to keep the U.S. real estate market moving in the right direction, mortgage interest rates are likely to move sideways and remain just as low at the start of next week.

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