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Mortgage Rates Radar: Rates take leap on economic faith

By   |  Posted in Mortgage Rates Radar

Rates on the most popular types of mortgages leapt to the highest point in more than a years' time, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed mortgage rates jumped by 19 basis points (0.19 percent) to 3.99 percent. Conforming 5/1 Hybrid ARM rates increased by 10 basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.74 percent.

"Bond and mortgage markets continue to prepare themselves for an early exit by the Fed," said Keith Gumbinger, vice president of HSH.com. "Up until recently, expectations were that the Fed would begin to taper purchases of mortgage-backed securities (MBS) and Treasury bonds late in 2013, but that timeframe appears to have moved to September, possibly sooner."

The Federal Reserve continues to purchase a total of $85 billion per month in MBS and Treasuries to help keep interest rates low and mortgage markets liquid.

"Before the Fed begins to pull back, we will need to see a lot more solid economic data, especially in labor markets. The news of late suggests that the economy is holding its own, but little more, and that's with QE still fully in play. It could very well be that investors are getting ahead of themselves, given the lack of compelling evidence that the economy is ready to run without these supports," adds Gumbinger.

Still, he acknowledges, without a spate of weak data, mortgage rates are less likely to decline, or decline significantly. This is discussed in greater detail in HSH.com’s latest Two-Month Forecast.

Average mortgage rates and points for conforming residential mortgages for the week ending June 4, according to HSH.com:

HSH.com Mortgage Rates Radar - Four Week Trend

 

Conforming 30-year fixed-rate mortgage

·         Average rate:   3.99 percent

·         Average points: 0.23

 

Conforming 5/1-year adjustable-rate mortgage

·         Average rate:   2.74 percent

·         Average points: 0.17

 

Average mortgage rates and points for conforming residential mortgages for the previous week ending May 28 were, according to HSH.com:

 

Conforming 30-year fixed-rate mortgage

·         Average Rate:   3.80 percent

·         Average Points: 0.19

 

Conforming 5/1-year adjustable-rate mortgage

·         Average Rate:   2.64 percent

·         Average Points: 0.15

 

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 www.quinstreet.com

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Press Contact:

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