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Mortgage Rates Radar: Mortgage rates tick higher, await Fed decision

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Rates on the most popular types of mortgages nudged higher this week according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed mortgage rates rose by two basis points (0.02 percent) to 4.52 percent. Conforming 5/1 Hybrid ARM rates increased by just a single basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.19 percent.

Will the Fed taper?

"Mortgage rates have firmed in the weeks leading up to this Federal Reserve meeting," said Keith Gumbinger, vice president of HSH.com. "After holding policy steady in September and October, there is a good chance that the Fed will announce a slowing of Treasury bond purchases today. They might also slow purchases of Mortgage-Backed Securities (MBS), but that seems less likely."

The Federal Reserve has been purchasing approximately $85 billion in Treasuries ($45 billion) and MBS ($40 billion) monthly throughout 2013. Buying Treasuries helps lower long-term interest rates, while purchasing MBS promotes liquidity in the mortgage market, helping move those lower rates to homebuyers and refinancers. The Fed has pledged to keep these programs in place until the economic picture has brightened, and recent indications suggest that the economy is improving, so the Fed may determine the time is right to make a change.

Markets prepared for a change

"A small move today would not change the immediate interest and mortgage rate picture by very much, if at all," adds Gumbinger. "Financial markets seem better prepared for any change at this point and so wouldn't be very surprised, and interest rates are already positioned as though at least some change has occurred, with 10-year Treasuries and mortgages about a full percentage point above this year's lows."

Current mortgage rates

Average mortgage rates and points for conforming residential mortgages for the week ending December 17, according to HSH.com:

Conforming 30-year fixed-rate mortgage
-Average rate:   4.52 percent
-Average points: 0.22

Conforming 5/1-year adjustable-rate mortgage
-Average rate:   3.19 percent
-Average points: 0.14

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

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


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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