Rates on the most popular types of mortgages retreated again, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by another four basis points (0.04 percent) to 3.66 percent. Conforming 5/1 Hybrid ARM rates decreased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.92 percent. Fixed mortgage rates have now dipped to levels last seen in May 2013, and the popular 5/1 ARM is at about a one-year low.
Sweet spot for mortgage rates
"We are in a remarkable sweet spot for mortgage rates," said Keith Gumbinger, vice president of HSH.com. "Economic growth in the U.S. is soft but steady, inflation isn't a serious concern, we're not yet close to a meeting where the Fed is likely to raise short-term rates, and global economic issues are helping keep downward pressure on overall interest rates. This puts 30-year fixed mortgage rates at less than a quarter of a percentage point above 60 year lows."
After starting the year above the four percent mark, fixed mortgage rates have generally been on the decline, confounding expectations. As anticipated, economic growth has not picked up, and the Federal Reserve has cut in half the number of expected lifts in interest rates it is likely to engineer in 2016. Meanwhile, central banks around the world are employing measures that make U.S. Treasuries very attractive as a safe and relatively profitable place to park funds. This appeal has helped underlying rates decline.
Borrowers: take advantage of these rates
"There's no way to know how long the influences keeping mortgage rates down will last," adds Gumbinger. "Firmer growth and faster inflation will tend to lift them, as would a change in the Fed's or investor thinking about where short-term rates may go in the near future. For at least a little while, we're in a very favorable spot, and borrowers should take advantage of them, if they can."
Current mortgage rates
Average mortgage rates and points for conforming residential mortgages for the week ending April 12, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average rate: 3.66 percent
- Average points: 0.17
Conforming 5/1-year adjustable-rate mortgage
- Average rate: 2.92 percent
- Average points: 0.09
Average mortgage rates and points for conforming residential mortgages for the previous week ending April 05 were, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average Rate: 3.70 percent
- Average Points: 0.17
Conforming 5/1-year adjustable-rate mortgage
- Average Rate: 2.97 percent
- Average Points: 0.12
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.
