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Mortgage rates set several records last week

 

Mortgage rates and other interest rates had been on a flat to easing trend for much of last week as most of the economic data did little to dispel the notion that we remain in a rough patch, one even the Federal Reserve implicitly acknowledged at the close of its meeting on Wednesday.

Mortgage rates set records last week

According to the latest data from HSH.com, the overall average rate for 30-year fixed-rate mortgages (conforming, non-conforming and jumbo) eased by four basis points (0.04 percent) to 3.61 percent, another new low for 2013 and close to “all-time” record lows set last year.

The overall average rate for 15-year fixed-rate mortgages (conforming, non-conforming and jumbo) dropped by three basis points (0.03 percent) to 2.86 percent for the week, another actual all-time low.

FHA-backed 30-year fixed-rate mortgages followed along with a decline of two basis points (0.02 percent), falling to an average rate of 3.26 percent (record low by two basis points) and was accompanied by a three-hundredth of a percentage point slip in the overall average rate for 5/1 Hybrid ARMs, which trekked down to an average 2.57 percent--another new low water-mark for the most popular ARM.

Mortgage rates will move away from record lows

As far as mortgage rates go, it took an accumulation of fair economic news over a period of months and some considerable market optimism about the economy’s future to bump them up during the late winter and early spring.

That trend did an about face over the last six weeks or so as the economic news turned decidedly darker. Is the positive employment report the start of a new spate of solid news, or simply a bright spot in an otherwise dim sky? One report doesn’t change the overall trend, but may be enough to allay concern about a deeper downturn forming.

For the moment, the brighter employment picture on last Thursday and Friday was sufficient to cause a reversal in the decline in interest rates. The influential 10-year Treasury bounced upward by more than a tenth-percentage point last Friday, so it’s to be expected that at least some of that will show in mortgage rates as we round into this week. Many popular mortgages have been easing to record or near record lows, but will move away from them this week, when a 5 or 6 basis point rise seems most likely.

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