The 15-year fixed-rate average increased to 3.22 percent with an average 0.5 point. It was 3.19 percent a week ago and 3.09 percent a year ago.
Hybrid adjustable rate mortgages were mixed. The five-year ARM average held steady at 3.03 percent with an average 0.4 point, same as it was a week ago. It was 2.95 percent a year ago.
The one-year ARM average rose to 2.67 percent with an average 0.2 point. It was 2.64 percent a week ago.
“As was almost-universally expected, the Federal Open Market Committee (FOMC) of the Federal Reserve elected this week to raise short-term interest rates for the first time since 2006,” Sean Becketti, Freddie Mac chief economist, said in a statement.
“We take the Fed at its word that monetary tightening in 2016 will be gradual, and we expect only a modest increase in longer-term rates. Mortgage rates will tick higher but remain at historically low levels in 2016. Home sales will remain strong, but refinance activity should cool somewhat. Novel policy approaches such as quantitative easing injected significant liquidity in the economy over the past seven years. As a result, the Fed is forced to employ some new tools, such as reverse repos, as it tightens monetary policy. We are likely to see some short-term volatility in fixed-income markets as market participants adjust to these new tools.”
Meanwhile, mortgage applications were stagnant, according to the latest data from the Mortgage Bankers Association.
The market composite index — a measure of total loan application volume – decreased 1.1 percent from the previous week. The refinance index crept up 1 percent, while the purchase index fell 3 percent.
The refinance share of mortgage activity accounted for 60.7 percent of all applications.