Mortgage rates drift back to January lowsby Tim Manni
The headline of last week’s Mortgage Rates Radar was “Fixed mortgage rates rise but decline expected.”
This week, mortgage rates declined indeed, according to HSH.com’ latest mortgage rates survey, falling to lows not seen since January.
Rates on the most popular types of mortgages stepped backward this week 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 3.64 percent. Conforming 5/1 Hybrid ARM rates decreased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at average of 2.62 percent. Thirty-year fixed mortgage rates have retreated to late January, 2013, levels.
Financial markets push rates lower
“The financial markets have become a little jittery of late,” said Keith Gumbinger, vice president of HSH.com. “Mixed and uncertain results in Italian elections last week, and the sequestration stalemate in Washington as we began this one, pushed as least some investor cash back into bonds, driving mortgage rates lower.”
Good news about the American economy may reverse some of that, he noted.
Mortgage rates unlikely to stray too far
“Solid housing market numbers and rising activity among service businesses have buoyed the stock market again, and the siren song of greater returns may again call money from the safe havens of bonds, lifting yields. However, with Federal Reserve Chairman Bernanke reiterating the Fed’s support, and with plenty of economic trouble still here and abroad, bond yields and interest rates remain well tethered and are unlikely to stray too far from present levels.”
Purchase and refinance applications surge
As mortgage rates fell to monthly lows, mortgage applications followed suit by increasing the week ending March 1.
According to the Mortgage Bankers Association, overall applications surged 14.8 percent from the week prior. Refinance and purchase applications were both up 15 percent, hitting its highest points in over a month.
About HSH.com’s Mortgage Rates Radar
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.