Rates on the most popular types of mortgages continued to fall this week, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages declined by another five basis points (0.05 percent) to 3.89 percent. Conforming 5/1 Hybrid ARM rates fell by another four basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.07 percent. The decline for both products has been nearly a quarter of a percentage point over the past four weeks.
No chance the Fed makes a move this month
"Mortgage rates continued their unexpected slide this week," said Keith Gumbinger, vice president of HSH.com. "Rough financial market conditions and concerns about inflation are certain to be a portion of the Fed's discussion during its two-day meeting which concludes on Wednesday. Given these conditions, there's virtually no chance that the Fed will make any change to short-term interest rates."
When the Fed lifted interest rates for the first time in nearly 10 years last month, financial markets were fairly calm, and the quiet holiday season was upon us. Since the turn of the year, restive markets have been with us, and the Fed move has likely played at least a minor role in the turbulence. This is rooted in collapsing oil prices and China's stock market rout which has spread across the globe in recent weeks.
Markets concerned about the Fed's forecast
"It's more coincidence than not that the small move in the funds rate by the Fed occurred shortly before the present troubles began," added Gumbinger. "The small move to the federal funds rate itself might not mean much, but markets may now be expressing some concern about the Fed's forecast for perhaps three or four rate increases in 2016, which seems aggressive given slow growth and little inflation. We'll see if the statement which closes the meeting on Wednesday contains some soothing words; In the meanwhile, borrowers are seeing another opportunity to grab a mortgage at a great rate right now."
Current mortgage rates
Average mortgage rates and points for conforming residential mortgages for the week ending January 26, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average rate: 3.89 percent
- Average points: 0.16
Conforming 5/1-year adjustable-rate mortgage
- Average rate: 3.07 percent
- Average points: 0.11
Average mortgage rates and points for conforming residential mortgages for the previous week ending January 19 were, according to HSH.com:
Conforming 30-year fixed-rate mortgage
- Average Rate: 3.94 percent
- Average Points: 0.20
Conforming 5/1-year adjustable-rate mortgage
- Average Rate: 3.11 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.
Every 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. For information on additional loan products, visit HSH.com.
