Rates on the most popular types of mortgages held close to or moved into new record low territory, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by seven basis points (0.07 percent) to 3.48 percent. Conforming 5/1 Hybrid ARM rates increased by a single basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.68 percent.
"The mortgage market continues to bend to the Fed's desire," said Keith Gumbinger, vice president of HSH.com, "with fixed rate mortgages easing to new record lows again this week. The weakness in the economy is serving to press rates downward, and since the Fed began its new policy of mortgage backed security (MBS) purchases on September 14, the average 30-year fixed rate mortgage has declined by almost a quarter of a percentage point."
Last month, in addition to its existing programs, the Federal Reserve instituted an open-ended policy of buying MBS at a rate of $40 billion per month. The Fed hopes to foster both refinancing by homeowners to free up spendable cash and additional home sales to help buoy home prices.
"It's not clear how much additional decline in rates will come as a result of the Fed’s actions," notes Gumbinger. "To a great degree, that will depend upon whether or not investors continue to participate in the MBS market at the same level as they did prior to the Fed joining the fray. Should yields on mortgages get too low, investors may start to look elsewhere to find better returns, which would tend to temper any decline."
Average mortgage rates and points for conforming residential mortgages for the week ending October 2, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average rate: 3.48 percent
- Average points: 0.24
Conforming 5/1-year adjustable-rate mortgage
- Average rate: 2.68 percent
- Average points: 0.19
Average mortgage rates and points for conforming residential mortgages for the previous week ending September 25 were, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average Rate: 3.55 percent
- Average Points: 0.25
Conforming 5/1-year adjustable-rate mortgage
- Average Rate: 2.67 percent
- Average Points: 0.19
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 HSH.com
HSH.com is a trusted source of mortgage data, trends, news and analysis. Since 1979, HSH’s market research and commentary has helped homeowners, buyers and sellers make smart financial choices and save money on mortgage and home equity products. HSH.com, of Riverdale, N.J., is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to research, find and select the products, services and brands that best meet their needs. The company is a leader in ethical marketing practices. For more information, please visit QuinStreet.com.
A 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.
