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HSH.com Mortgage Rates Radar: Your first report on the mortgage market this week

Mortgage rates drift higher this week

 

Rates on the most popular types of mortgages moves upward slightly this week according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by three basis points (0.03 percent) to 3.74 percent. Conforming 5/1 Hybrid ARM rates decreased by six basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.01 percent.

"Although there is considerable uncertainty about how much benefit the European Central Bank's bond-buying program will produce, at least it is making attempts to support the collective economies that use the Euro as currency", said Keith Gumbinger, vice president of HSH.com. "As with the Fed's program, the intention is to lower interest rates in hopes of spurring growth and to combat deflation, but rates on the bonds they will be buying are already at or near record lows, so the effect is likely to be more muted."

The ECB's move to stimulate the flagging Eurozone may have the unintended effect of continuing to push investor money toward U.S. markets, at least for a time. The safety and stability of U.S. Treasuries remains a powerful draw, and U.S. yields also produce relatively high returns for investors. Even as low as domestic interest rates are, they yield about five times the return of a comparable German bond at the moment.

"The ECB getting their program underway is important, but as with the Fed's QE, it will take some time to produce any results, so the flow of offshore funds which has pushed mortgage rates down to 20-month lows will remain in place," adds Gumbinger. "The flow may be lessened a bit by hopes of improvement to come, but until proof begins to show that the ECB QE is working as intended, mortgage rates here will still have more reasons to stay down than to rise."

Average mortgage rates and points for conforming residential mortgages for the week ending January 27, according to HSH.com:

HSH.com Mortgage Rates Radar - Four Week TrendConforming 30-year fixed-rate mortgage
  • Average Rate:   3.74 percent
  • Average Points: 0.14

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   3.01 percent
  • Average points: 0.08

Average mortgage rates and points for conforming residential mortgages for the previous week ending January 20 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate:   3.71 percent
  • Average Points: 0.13

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   2.95 percent
  • Average Points: 0.09

Methodology

The Weekly Mortgage Rates Radar reports the average rates and points offered on conforming 30-year fixed-rate mortgages and conforming 5/1 ARMs. The weekly mortgage rate survey covers a large sample of mortgage lenders and is conducted over a Wednesday-to-Tuesday cycle, with data released every Wednesday. HSH.com’s survey helps consumers find the best rates on home loans in changing market conditions. Unlike mortgage rate surveys that report average rates only, the Weekly Mortgage Rates Radar’s inclusion of both average rates and average points provides a more accurate view of mortgage terms currently offered by lenders.

Every week, HSH.com conducts a survey of mortgage rate data for a wide range of consumer mortgage products including ARMs, FHA-backed and jumbo mortgages, as well as home equity loans and lines of credit from hundreds of direct lenders in the U.S. For information on additional loan products, visit HSH.com.

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