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

Mortgage rates shift higher this week

 

Rates on the most popular types of mortgages nudged upward again, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by six basis points (0.06 percent) to 4.25 percent. Conforming 5/1 Hybrid ARM rates increased by seven basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.24 percent. This represents the highest average interest rate for 30-year fixed-rate mortgages since mid-May; the lift in the 5/1 ARM returned the most popular ARM to January, 2014 levels, effectively ending for now an unusually flat and stable period for mortgage rates.

Good news lifts mortgage rates

"Weeks of good news about the economy couldn't continue to have no effect on mortgage rates," said Keith Gumbinger, vice president of HSH.com. "Though rates moved to multi-month highs this week, this only serves to show how little movement there has been for mortgage rates over many months. The small rise isn't significant, though, as it only adds about $7 to a monthly payment on a $200,000 loan."

Continuing good news about the economy may foster a change in the messaging used by the Federal Reserve to describe future interest rate policy. A two-day Fed policy-setting meeting ends today; although no change outside of another trim to Quantitative Easing (QE) purchases of Treasuries and Mortgage Backed Securities is expected, new language may be introduced into the release the Fed issues to end these affairs.

"The Fed has said that short-term rates will likely remain low for a ‘considerable time’ after QE comes to an end," adds Gumbinger. "That has been expected to be six months or more, with the next change to Fed-controlled short-term rates expected to come in early to mid-2015. With the economy and labor markets continuing to perform well, we may see a signal that moves up that date somewhat; if so, mortgage rates may move higher still."

Current mortgage rates

Average mortgage rates and points for conforming residential mortgages for the week ending September 16, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate: 4.25 percent
  • Average Points: 0.20

Conforming 5/1-year adjustable-rate mortgage

  • Average rate: 3.24 percent
  • Average Points: 0.10

Average mortgage rates and points for conforming residential mortgages for the previous week ending September 09 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate: 4.19 percent
  • Average Points: 0.17

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate: 3.17 percent
  • Average Points: 0.08

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