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Mortgage Rates Radar: Economic disappointment sends mortgage rates lower

By   |  Posted in Mortgage Rates Radar

Rates on the most popular types of mortgages moved downward again, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed mortgage rates fell by 11 basis points (0.11 percent) to 4.22 percent. Conforming 5/1 Hybrid ARM rates decreased by two basis points (0.02 percent), closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.13 percent. For the 30-year fixed rate, it was the lowest average seen since the week of June 18, and 46 basis points (0.46 percent) below this year's peak level.

Little reason for the Fed to taper

"We're seeing no signals of the kind of economic conditions that would prompt the Fed to make any changes to its support programs," said Keith Gumbinger, vice president of HSH.com. "Both economic growth and inflation remain below the Fed's ideal targets, and the path ahead isn't very clear, either."

The Federal Reserve will signal the completion of its regular policy meeting today with a statement detailing any changes in monetary policy and a characterization of the conditions which affected the choice to make a change or not. The 16-day government shutdown this month played havoc with release of fresh economic data and also may cause distortions in forthcoming releases. The Fed is likely to allude to the uncertainty and additional growth headwinds the shutdown has caused.

"It's unlikely that the Federal Reserve will reveal too much new information about their thinking at the close of the meeting today," adds Gumbinger. "It was a close vote when the Fed decided to stay the course back in September, and since then the drumbeat of moderate data has continued fairly steadily. It will probably be a close vote again, but there is little danger in the Fed erring on the side of caution in changing policy, given the present pattern for growth and inflation."

Mortgage rates continue to fall

Average mortgage rates and points for conforming residential mortgages for the week ending October 29, according to HSH.com:

HSH.com Mortgage Rates Radar - Four Week Trend

Conforming 30-year fixed-rate mortgage

  • Average rate:   4.22 percent
  • Average points: 0.22

Conforming 5/1-year adjustable-rate mortgage

  • Average rate:   3.13 percent
  • Average points: 0.14

Average mortgage rates and points for conforming residential mortgages for the previous week ending October 22 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate:   4.33 percent
  • Average Points: 0.17

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   3.15 percent
  • Average Points: 0.11

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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