Rates on the most popular types of mortgages eased a little bit again, according to HSH.com's Weekly Mortgage Rates Radar.
The average rate for conforming 30-year fixed-rate mortgages fell by five basis points (0.05 percent) to 4.01 percent, its lowest average rate since early December. Conforming 5/1 Hybrid ARM rates decreased by nine basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.18 percent.
"Mortgage rates continue to be influenced by global economic events and trends," said Keith Gumbinger, vice president of HSH.com. "Of late, investors have been moving money out of riskier holdings in stocks and expressing a preference for the safety of bonds, especially U.S.-backed Treasury bonds. This is driving down yields and tugging mortgage rates down along with them."
Oil impact felt
Another factor influencing interest rates is the continued decline in oil prices. Along with slack global demand, declines in this key input cost tend to keep inflation pressures in check. Inflation erodes bond values over time, and the likelihood of less inflation means investors demand less protection from it, so yields decline somewhat. As well, a lack of building inflationary pressure could keep the Federal Reserve from making many changes to short-term rates this year.
"Economic troubles and little fear of any pickup in inflation continue to be the mortgage shopper’s friend," adds Gumbinger. "That being said, there are limits to how far interest rates can decline as long as the economy is growing and the Fed remains committed to lifting them in the future. Still, seeing rates heading back to the 4 percent mark should provide a bit of additional cheer for homebuyers and refinancers, who may be encouraged to get deals in place as a result."
By the numbers
Average mortgage rates and points for conforming residential mortgages for the week ending January 12, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average Rate: 4.01 percent
- Average Points: 0.20
Conforming 5/1-year adjustable-rate mortgage
- Average Rate: 3.18 percent
- Average Points: 0.11
Average mortgage rates and points for conforming residential mortgages for the previous week ending January 05 were, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average Rate: 4.06 percent
- Average Points: 0.17
Conforming 5/1-year adjustable-rate mortgage
- Average Rate: 3.27 percent
- Average Points: 0.08
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.
Each 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.
