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Mortgage Rates Radar: Mortgage rates cruise to near year-ago levels

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Rates on the most popular types of mortgages moved lower again, 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 4.20 percent. Conforming 5/1 Hybrid ARM rates decreased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average 3.08 percent.

Mortgage rates bypass six-month lows

"Mortgage rates have now bypassed six-month lows, heading all the way back to levels seen last June," said Keith Gumbinger, vice president of HSH.com. "Of course, rates were on the rise at that time, after then-Fed Chairman Ben Bernanke discussed coming changes in Federal Reserve policy, most specifically that the Fed's QE program would end at some point. We're now about midway through that 'tapering' process, and mortgage rates are lower than they have been in months."

An ongoing litany of issues has served to keep mortgage rates down, including weak demand for mortgage credit from a sluggish housing market, near-zero economic growth in the first quarter of 2014, slower growth in China, political troubles in the Ukraine and more. The European Central Bank may be ready to embark on a rate-lowering QE program of its own, making our Treasuries and MBS more attractive to investors. Add to that a stock market which has slumped over the past week, and there are plenty of pressures putting a lid on rates.

"Lower mortgage rates are of course welcome, as they have appeared during the heart of the spring homebuying season," adds Gumbinger, "but it will take more than low rates to get the housing market running at a faster pace, what with millions of underwater and low-equity homeowners not participating in the market, tight underwriting standards, low inventories of desirable homes for sale and weak income gains all contributing to the challenging environment."

Current mortgage rates

Average mortgage rates and points for conforming residential mortgages for the week ending May 20, according to HSH.com:

HSH.com Mortgage Rates Radar - Four Week Trend

Conforming 30-year fixed-rate mortgage

  • Average rate:   4.20 percent
  • Average points: 0.21

Conforming 5/1-year adjustable-rate mortgage

  • Average rate:   3.08 percent
  • Average points: 0.11

Average mortgage rates and points for conforming residential mortgages for the previous week ending May 13 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate:   4.27 percent
  • Average Points: 0.16

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   3.13 percent
  • Average Points: 0.07

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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