Rates on the most popular types of mortgages edged higher for a second consecutive week, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by four basis points (0.04 percent) to 3.75 percent. Conforming 5/1 Hybrid ARM rates increased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.05 percent.
Probability of June move remains low
"Interest rates have firmed up a bit lately as the chances of a June move by the Federal Reserve have increased," said Keith Gumbinger, vice president of HSH.com. "Although the probability has moved up in recent days, it is still pretty low. Investors must try to plan for even a slight chance of a move or risk being behind the curve when it comes."
At the moment, future markets suggest that there is about a 23 percent chance of a Fed move at the June meeting. The figure will surely rise if the data due this week reveals a strengthening economy. Last week, we learned that Gross Domestic Product was a little stronger in the first quarter of 2016 than what was originally estimated. If solid, this week's key reports on manufacturing, service industry activity and the June employment report all carry sufficient weight to raise the probability of a move by the central bank.
Slightly firmer mortgage rates
"It's "all data, all the time" until the next Fed meeting on June 14 and 15," adds Gumbinger. "A move by the Fed in July remains more likely, but if the data suggests that the economy has regained traction after a soft winter period, the Fed may decide that it's better to move sooner rather than later. We'll find out soon enough, but for the moment, just slightly firmer mortgage rates are in the cards."
Current mortgage rates
Average mortgage rates and points for conforming residential mortgages for the week ending May 31, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average rate: 3.75 percent
- Average points: 0.14
Conforming 5/1-year adjustable-rate mortgage
- Average rate: 3.05 percent
- Average points: 0.08
Average mortgage rates and points for conforming residential mortgages for the previous week ending May 24 were, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average Rate: 3.71 percent
- Average Points: 0.19
Conforming 5/1-year adjustable-rate mortgage
- Average Rate: 3.00 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.
