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Mortgage Rates Radar: Mortgage rates firm to eight-week high

By   |  Posted in Mortgage Rates Radar

Rates for the most popular types of mortgages increased according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by five basis points (0.05 percent) to 4.46 percent. Conforming 5/1 Hybrid ARM rates increased seven basis points (0.07 percent), closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.18 percent.

Yellen makes a splash

"Fed Chair Janet Yellen made a splash in the press conference which accompanied last week's Federal Reserve policy meeting," said Keith Gumbinger, vice president of HSH.com. "Her characterization of how quickly the Fed might begin to raise interest rates once the QE tapering is completed was surprisingly clear, and seemed to be sooner than markets were expecting."

The Federal Reserve is gradually slowing purchases of Mortgage-backed Securities and Treasury bonds and is expected to end the Quantitative Easing (QE) program by about October of this year. Coupled with an upward change in where Fed members expect the federal funds rate to end in 2015, Ms. Yellen's characterization of how long "a considerable time after the asset purchase program ends" would last ("...around six months or that type of thing", she replied) seemed to suggest that the first change in short-term rates since 2008 would come sometime next spring. As markets expected both a somewhat later start and a slower rate of increase, some repositioning of investor holdings took place, lifting interest rates.

Mortgage rates still favorable

"While not a spike like we saw last spring, the small bump in rates was sufficient to put us back to levels seen in late January," added Gumbinger. "However, we are still at very favorable levels as we begin the traditional spring homebuying season, even if the Fed and an expected warming in the economy may conspire to nudge them higher in the weeks ahead."

Current mortgage rates

Average mortgage rates and points for conforming residential mortgages for the week ending March 25, according to HSH.com:

HSH.com Mortgage Rates Radar - Four Week Trend

Conforming 30-year fixed-rate mortgage

  • Average rate:   4.46 percent
  • Average points: 0.15

Conforming 5/1-year adjustable-rate mortgage

  • Average rate:   3.18 percent
  • Average points: 0.08

Average mortgage rates and points for conforming residential mortgages for the previous week ending March 18 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate:   4.41 percent
  • Average Points: 0.19

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   3.11 percent
  • Average Points: 0.13

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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