Interest rates tick up slowly

2/24/2014 11:42:55 AM

According to Mortgage News Daily, mortgage rates moved higher during the week ending Feb. 21, despite other market conditions strengthening. Rates rose an average of 0.02 percent to 4.5 percent for a 30-year fixed-rate mortgage - a small but measurable incline.

Recent weak housing and economic reports have shown that the severe winter weather seen this year across the country has slowed economic activity across nearly every industry. Typically, when the economy contracts, mortgage rates tend to dip. However, because much of the downturn is attributed to foul weather, mortgage rates did not follow the trend and fall, according to Mortgage News Daily.

Although the change in mortgage rates was minimal, it reveals that they are subject to market volatility and any economic report could have an impact for homebuyers.

"Is the data truly weak or has the bad weather been too strong?" Manny Gomes, Norcom Mortgage branch manager, told Mortgage News Daily. "That is the question most traders are pondering. This leaves rates vulnerable to any data that manages to come in above consensus."

Mortgage rates will mostly be influenced by what the Federal Reserve decides to do with its fiscal policy over the coming months. A high rate of bond buying has helped keep mortgage rates low, but rates will likely rise as the Fed reduces spending. According to MarketWatch however, the bond purchasing may last until 2015.

Contact the Federal Savings Bank, a veteran owned bank, to explore mortgage options.