Mortgage rates waver as Fed slows buying

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NEW YORK (CNNMoney.com) -- Home mortgage rates were mixed this week as the Federal Reserve began easing away from its repurchase of Treasurys.

The average 30-year fixed rate mortgage inched up to 5.67% from 5.65% the week prior, and the 15-year fixed fell to 4.93% from 4.97%, according to the weekly national survey from Bankrate.com.

Mortgage rates have held within a narrow range for almost two months, despite some economic improvement, the report noted.

"With the Federal Reserve beginning to wean the markets from its repurchases of Treasury debt, there will be less to restrain mortgage rates if the economic data continue to improve," the report said. Bond yields tend to influence mortgage rates.

On Wednesday the Fed released a statement at the end of a two-day policy meeting, saying it plans to complete the previously announced purchases of $300 billion of Treasurys by October and "a smooth transition in markets" will slow those purchases between now and then.

If the recovery appears to stumble, mortgage rates will pull back, the report said. Also, when rates show little movement over a long period of time it is often followed by sharp movements in a short period, the report added.

"The pattern is likely to play out once again, but it remains unclear whether the next big move is up or down," the report said.

Current mortgage rates remain much lower than last year's levels, when the average 30-year fixed was 6.74%, according to Bankrate.com.

At the current rate of 5.67%, the monthly payment on a $200,000 mortgage would be $1,157, or about $139 less than the monthly payment at last year's rate.

Adjustable-rate mortgages: ARMs turned lower, the report said, with the average 1-year ARM slipping to 5.19%, and the 5-year ARM falling to 4.93%.