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Mortgage rates respond unevenly to Fed rate hike

Interest rates on mortgages mostly nudged higher this week, as the effects of the Federal Reserves initial increase of the federal funds rate seem to be fairly low-key.

Rates have virtually stayed where they were before the rate hike, says Bryan Sullivan, executive vice president and chief financial officer at loanDepot in Foothill Ranch, California.

I think part of it is driven by everybody anticipating December being the month when the (federal funds rate) was going to increase from its (near) 0 level, he says.

Brett Sinnott, vice president of capital markets at CMG Financial in San Ramon, California, agrees: Everybody did a really good job of building that into their models.

The Fed is expected to raise the federal funds rate by 25 basis points once every quarter throughout 2016, Sinnott adds.

A look at this weeks rates

  • The benchmark 30-year fixed-rate mortgage rose to 4.12% from 4.09%, according to Bankrates Dec. 22 survey of large lenders. A year ago, the rate was 3.96%. Four weeks ago it was 4.07%. The mortgages in this weeks survey had an average total of 0.22 discount and origination points. Over the past 52 weeks, the 30-year fixed has averaged 3.99%. This weeks rate is 0.13 percentage points higher than the 52-week average.
  • The benchmark 15-year fixed-rate mortgage fell to 3.33% from 3.34%.
  • The benchmark 30-year fixed-rate jumbo mortgage stayed at 4.03%.
  • The benchmark 5/1 adjustable-rate mortgage rose to 3.44% from 3.42%.

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