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Mortgage Rates Radar: Employment disappointment drops mortgage rates

 

Rates on the most popular types of mortgages moved down notably this week, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by eight basis points (0.08 percent) to 4.53 percent. Conforming 5/1 Hybrid ARM rates decreased by seven basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average 3.26 percent.

Largest decline since October '13

"Just when it looks as though the economy is performing reliably, even gaining momentum, comes a report that takes some of the wind out of the sails," said Keith Gumbinger, vice president of HSH.com. "The soft employment report for December is a bit of a two-edged sword, as it brings lower mortgage rates to homeowners looking to refinance and homebuyers looking to get deals in place, but comes at the expense of the broader economy, but especially people looking for a job."

About 1.3 million Americans saw their unemployment benefits expire at the end of December, so the weak pace of hiring seems even more painful. With new mortgage rules in place, borrowers usually need at least two years' worth of income documentation to be able to qualify for a mortgage, and bouts of unemployment and periods with no income make it that much more difficult for people hoping to buy or refinance a home sometime soon.

"Low mortgage rates are little more than an attractive nuisance if you can't qualify for a loan," notes Gumbinger. "Here's hoping that the dip in new hiring turns out to be just a blip in an otherwise fair pattern, or we may not see the kind of housing market in 2014 we are hoping to see."

Current mortgage rates

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

HSH.com Mortgage Rates Radar - Four Week Trend

Conforming 30-year fixed-rate mortgage

  • Average rate:   4.53 percent
  • Average points: 0.18

 Conforming 5/1-year adjustable-rate mortgage

  • Average rate:   3.26 percent
  • Average points: 0.13

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

Conforming 30-year fixed-rate mortgage

  • Average Rate:   4.61 percent
  • Average Points: 0.19

 Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   3.33 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.

About the author:

KTGA 25-year expert observer of the mortgage and consumer debt markets, Keith Gumbinger has been cited in thousands of articles covering a wide range of consumer finance and economic topics in outlets ranging from the Wall Street Journal to the Bottom Line newsletters. He has been a featured guest on national broadcasts for CNN, CNBC, ABC, CBS and NBC television networks and has been heard on NPR and other national and local radio programs. Keith is the primary researcher and writer for HSH.com's MarketTrends newsletter and has authored or co-authored a number of consumer guides on mortgages, home equity, refinancing and more.

 

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