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Mortgage Rates Radar: Mortgage rates see another increase

By   |  Posted in Mortgage Rates Radar

Rates on the most popular types of mortgages rose again this week, with fixed rates rising to levels last seen in mid-September, according to HSH.com's weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed mortgage rates rose by seven basis points (0.07 percent) to 4.50 percent. Conforming 5/1 Hybrid ARM rates increased by nine basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.18 percent.

The economy is improving

"The latest data suggest that the economy accelerated in November, including solid figures for new hiring," said Keith Gumbinger, vice president of HSH.com. "The Fed has been waiting for the economy to show signs of reliable and durable strength before making changes to its support programs, and with the next Fed policy meeting just a week away there is some chance that a tapering might begin."

The Federal Reserve has been purchasing $85 billion of mortgage-backed securities and Treasury bonds each month throughout 2013, but has signaled on a number of occasions that it would like to end the process as soon as possible. The Fed has clearly stated that the decision to taper or not is solely dependent upon the performance of the economy.

A small change could come in December

"As the Fed has indicated a preference to wait until there is an accumulation of positive data, it's still not likely that it will make a change at the next meeting, but there is a possibility that one might come," added Gumbinger. "For example, the Fed might make a token move reducing Treasury purchases by $5 billion to signal that it intends to tweak the QE program as incoming data points to economic improvement. Such a small move shouldn't disturb the financial markets much, so the risks of unwanted damage from making a change are slight."

Current mortgage rates

Average mortgage rates and points for conforming residential mortgages for the week ending December 10, according to HSH.com:

HSH.com Mortgage Rates Radar - Four Week Trend

Conforming 30-year fixed-rate mortgage
-Average rate:   4.50 percent
-Average points: 0.22

Conforming 5/1-year adjustable-rate mortgage
-Average rate:   3.18 percent
-Average points: 0.13

Average mortgage rates and points for conforming residential mortgages for the previous week ending December 03 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage
-Average Rate:   4.43 percent
-Average Points: 0.23

Conforming 5/1-year adjustable-rate mortgage
-Average Rate:   3.09 percent
-Average Points: 0.14

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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