Mortgage rates find new lowsby Tim Manni
Rates on the most popular types of mortgages eased to new record lows, 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 3.47 percent. Conforming 5/1 Hybrid ARM rates decreased by two basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.65 percent.
“The elections are behind us and the fiscal cliff is now before us,” said Keith Gumbinger, vice president of HSH.com. “Markets appear a little more wary right now. Stock market indices have shed a few hundred points over the last few weeks, and that money is being pushed into long-term bonds, driving yields and mortgage rates lower. For example, the influential 10-year Treasury Bond has seen its yield slide by more than an eighth of a percentage point over the past two weeks.”
Despite near record-low rates in place, applications for mortgage refinances, the largest component of the market, have been steadily declining for the past five weeks, according to the Mortgage Bankers Association of America.
“With a slide in demand, lender pipelines are starting to empty, easing what had been a crush of demand. In turn, lenders are now free to price more aggressively to try to attract new clients, and we may be seeing a little of that as well,” noted Gumbinger.