Mortgage rates fall, shrugging off possible Fed hike

Interest rates on mortgages moved slightly lower this week ahead of Thanksgiving.

Meanwhile, market analysts are expecting a move from the Federal Reserve at next month's policy-setting meeting.

A strong case for liftoff

The likelihood of a December rate hike received a bump when, according to Reuters, San Francisco Fed President John Williams said Saturday that as long as economic data continue to be favorable, "there's a strong case to be made in December to raise rates."

The market has already built in a rate hike from the Fed, for the most part, says Brett Sinnott, vice president of capital markets at CMG Financial in San Ramon, Calif.

"Other than the initial knee-jerk reaction of them actually saying, 'We're raising rates,' " he says, "once the dust settles they're going to probably be in the same range we're seeing right now."

A look at this week's rates

The benchmark 30-year fixed-rate mortgage fell to 4.07 percent from 4.09 percent, according to Bankrate's Nov. 24 survey of large lenders. A year ago, the rate was 4.08 percent. Four weeks ago, it was 3.88 percent.

The mortgages in this week's survey had an average total of 0.25 discount and origination points.

Over the past 52 weeks, the 30-year fixed has averaged 3.98 percent. This week's rate is 0.09 percentage points higher than the 52-week average.

• The benchmark 15-year fixed-rate mortgage fell to 3.29 percent from 3.31 percent.

• The benchmark 30-year fixed-rate jumbo mortgage fell to 3.94 percent from 3.97 percent.

• The benchmark 5/1 adjustable-rate mortgage fell to 3.33 percent from 3.37 percent.

Existing home sales slide

Pava Leyrer, chief operating officer at Northern Mortgage Services in Grandville, Mich., is surprised by how mortgage rates have been performing recently.

"They've been pretty stable and actually a smidge better this week," she says.

Sales of existing homes fell 3.4 percent from September to October, according to the National Association of Realtors. Last month's rate is still 3.9 percent higher than the same time last year.

There was a 4.8-month supply of homes for sale at the end of October. The median existing-home price was $219,600, which is nearly 6 percent higher than the year-ago price.

"Realtors have reported that there are lots of 'lookers' and fewer 'buyers,'" Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pa., says in a blog post. "That should change when mortgage rates start rising."

Prices continue upward trend

National home prices increased 0.2 percent from August to September and were up nearly 5 percent year over year from September 2014, according to the S&P/Case-Shiller home-price index, released Tuesday. Three cities saw double-digit increases compared with the same time last year: San Francisco, Denver and Portland, Ore.

"Home prices and housing continue to show strength, with home prices rising at more than double the rate of inflation," David M. Blitzer, chairman and managing director of the index committee at S&P Dow Jones Indices, says in a statement.

The common refrain about the current housing climate still stands: It's a great time to buy, Leyrer says.