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Mortgage Rates Radar 04/26/2016: Fed impending, rates edge higher

Rates on the most popular types of mortgages moved higher in the last seven days, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by six basis points (0.06 percent) to 3.71 percent. Conforming 5/1 Hybrid ARM rates increased by four basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.98 percent. It is the first increase in rates in several weeks.

Expectations for two lift rates this year

"Although the Federal Reserve is unlikely to lift short-term rates on Wednesday, markets are steeling themselves for any message that a June move is increasingly likely," said Keith Gumbinger, vice president of HSH.com. "The Fed expects to lift rates perhaps twice this year, and if a June move really is in the cards, this leaves just a few weeks for investors to get their positions set."

Calm markets may prompt change

The Federal Reserve expects to lift rates twice this year, should economic conditions warrant. Global financial markets endured quite a bit of unrest after the Fed's move in December, but have calmed appreciably in the last two months. If markets remain calm, it is likely that there will be another small lift in rates, even if economic growth is soft and inflation subdued. These conditions existed prior to the December move and did not deter the Fed from acting.

"It's all about the Fed's message, and whether the potential for another hike is coming sooner or later," adds Gumbinger. "If the indication is for June, mortgage rates will likely firm a bit more in the coming days. If it seems as though the Fed will wait longer, to perhaps July or even September, markets would relax a bit and rates would settle back for a while. We'll know soon enough, but even if they do increase, they aren't going very far anytime soon."

Current mortgage rates

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

Conforming 30-year fixed-rate mortgage

  • Average rate: 3.71 percent
  • Average points: 0.15

Conforming 5/1-year adjustable-rate mortgage

  • Average rate: 2.98 percent
  • Average points: 0.10

Average mortgage rates and points for conforming residential mortgages for the previous week ending April 19 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  • Average Rate: 3.65 percent
  • Average Points: 0.20

Conforming 5/1-year adjustable-rate mortgage

  • Average Rate: 2.94 percent
  • Average Points: 0.13

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.

 

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