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

Fixed mortgage rates drop to 16-month lows

 

Rates on the most popular types of mortgages declined substantially according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by ten basis points (0.10 percent) to 4.09 percent. Conforming 5/1 Hybrid ARM rates decreased by twelve basis points (0.12 percent), closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.10 percent.

U.S. mortgage rates influenced by foreign market stress

"Although the U.S. economy is doing pretty well, that's increasingly not the case for other economies," said Keith Gumbinger, vice president of HSH.com. "Fresh concern about the pace of growth in the Euro zone and other developed markets continues to give investors the jitters. As a result, they continue to plow money into the relative safety of U.S.-based investments."

In times of market stress, both domestic and foreign investors tend to sell riskier assets such as stocks and move funds into relatively safe investments, such as U.S. Treasury bonds, and to a lesser degree, U.S. mortgage-backed securities. The corresponding surge in demand raises the prices of these bonds, trimming the yield they provide. Current mortgage rates are influenced by these declining yields, much to the benefit of American mortgage shoppers.

A comprehensive primer on how and why mortgage rates ebb and flow can be seen at “What Moves Mortgage Rates? (The Basics)" at HSH.com.

Consider locking in an interest rate this week

"This week's tenth of a percentage point drop might be enough to create new interest in refinancing," adds Gumbinger. "At the very least, someone who is involved in a mortgage transaction now should consider locking in an interest rate. In terms of rate movements, the last few weeks have been more volatile than we've seen for a while, and a beneficial decline today could just as easily be a jump tomorrow."

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

HSH.com Mortgage Rates Radar - Four Week Trend

Conforming 30-year fixed-rate mortgage

  • Average Rate:   4.09 percent
  • Average Points: 0.20

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   3.10 percent
  • Average Points: 0.12

Average mortgage rates and points for conforming residential mortgages for the previous week ending October 07 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate:   4.19 percent
  • Average Points: 0.16

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   3.22 percent
  • Average Points: 0.12

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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