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

Mortgage rates still firming

 

Rates on the most popular types of mortgages ticked higher this week according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by two basis points (0.02 percent) to 4.13 percent. Conforming 5/1 Hybrid ARM rates increased by ten basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.11 percent.

We will see higher short-term interest rates this year

"In testimony before Congress last week, Fed Chair Janet Yellen made it plain that unless the economy falls off the rails, we will see higher short-term interest rates this year, and sooner rather than later," said Keith Gumbinger, vice president of HSH.com. "Shorter-term interest rates and ARMs are affected in a more direct way by Fed policy moves, so it's not surprising to see more of a lift in ARMs this week than for fixed-rate mortgages."

Mortgage rates could be lifted more when the first change ultimately comes

Historically, the Fed hasn't tried to directly control long-term interest rates or mortgage rates, but since 2008 they have been deeply involved in both the mortgage and Treasury markets and remain so, continuing to reinvest the proceeds from maturing bonds they hold into new mortgage and Treasury bonds. As fixed-rate mortgages have already risen from 2015 lows to 2015 highs in recent weeks, it appears that the financial markets have at least partially prepared for the Fed to begin the process of normalizing policy. However, with the anticipated cessation of bond-purchases, mortgage rates could be lifted more when the first change ultimately comes.

Economy and jobs will influence mortgage rates

"With the economy on fairly solid footing, it would take a measurable stumble to keep the Fed at bay until later in the year," adds Gumbinger. "There is a Fed policy meeting next week, and while no change to rates will come of it, we should learn more of the Fed's thinking about the future trajectory for policy after ‘liftoff' occurs. For the moment, though, if the economic and labor market data are firm, so will be mortgage rates."

Average mortgage rates and points for conforming residential mortgages for the week ending July 21, according to HSH.com:

HSH.com Mortgage Rates Radar - Four Week Trend

Conforming 30-year fixed-rate mortgage

  • Average Rate: 4.13 percent
  • Average Points: 0.22

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate: 3.11 percent
  • Average Points: 0.09

Average mortgage rates and points for conforming residential mortgages for the previous week ending July 14 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate: 4.11 percent 
  • Average Points: 0.18

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate: 3.01 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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