Rates moved up slightly with the 30-year fixed rate mortgage increasing 6 basis points to 3.22% and the 15-year fixed rate mortgage increasing 3 basis points to 2.55%.
To recap last week’s FOMC meeting, the Fed has decided to double the current pace of tapering. This suggests that they will halt their bond buying program by March. At that time, they may contemplate increasing the Federal Funds Rate, depending on how labor conditions are. Another factor is mounting inflation which grew 5.9% year-over-year in November. In a surprising update, rent is actually starting to accelerate faster than housing prices, jumping 7% in November while median mortgage payments increased just 1%. How did this happen? As more people got priced out of the real estate market, demand steadily switched to the rental market.