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Weekly Mortgage Rates Radar 02/03/2016: Rate Declines Continue

Rates on the most popular types of mortgages found more reasons to continue their decline this week, according to HSH.com's Weekly Mortgage Rates Radar.

The average rate for conforming 30-year fixed-rate mortgages fell by another eight basis points (0.08 percent) to 3.81 percent. Conforming 5/1 Hybrid ARM rates decreased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.02 percent. In both instances, mortgage rates have fallen by a quarter of a percentage point since the beginning of 2016.

"Amid a state of less-than-stellar economic data and an unsteady global climate, the Fed seems to have modified its stance," said Keith Gumbinger, vice president of HSH.com. "Gone from the statement that closes each meeting was their assessment of the balance of risks to economic growth and inflation, which could signal a greater degree of uncertainty about the outlook for raising interest rates."

March hike a 'waning' possibility

With the latest Gross Domestic Product report showing economic growth at a meager 0.7 percent in the fourth quarter of 2015, and with the Fed’s preferred measure of inflation retreating during that period, financial markets increasingly thinks that the Fed may not lift rates anytime soon. There is a possibility that the next increase will be delayed until June or beyond. Officially, the Fed left open the possibility for an increase in the federal funds rate in March, but that seems to be a waning possibility given the current economic climate.

"In December, the Fed's own expectation was that we might see three or four increases in short-term rates this year," notes Gumbinger. "However, forward-looking market signals suggest that only two or perhaps three moves are a more likely happenstance. This means that mortgage rates are likely to stay lower for a longer period of time than had been expected, presenting opportunities for more homebuyers to get a near record-low mortgage rate."

Average mortgage rates and points for conforming residential mortgages for the week ending February 2, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average rate:   3.81 percent
  • Average points: 0.17

Conforming 5/1-year adjustable-rate mortgage

  • Average rate:   3.02 percent
  • Average points: 0.10

Average mortgage rates and points for conforming residential mortgages for the previous week ending January 26 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate:   3.89 percent
  • Average Points: 0.16

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate:   3.07 percent
  • Average Points: 0.11

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.

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