Rates on the most popular types of mortgages held close to or moved into new record low territory, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages (FRMs) fell by seven basis points (0.07 percent) to 3.48 percent. Conforming 5/1 Hybrid ARM rates increased by a single basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.68 percent.
"The mortgage market continues to bend to the Fed's desire," said Keith Gumbinger, vice president of HSH.com. "With fixed rate mortgages easing to new record lows again this week. The weakness in the economy is serving to press rates downward, and since the Fed began its new policy of mortgag- backed security (MBS) purchases on Sept. 14, the average 30-year fixed rate mortgage has declined by almost a quarter of a percentage point."
Last month, in addition to its existing programs, the Federal Reserve instituted an open-ended policy of buying MBS at a rate of $40 billion per month. The Fed hopes to foster both refinancing by homeowners to free up spendable cash and additional home sales to help buoy home prices.
"It's not clear how much additional decline in rates will come as a result of the Fed’s actions," said Gumbinger. "To a great degree, that will depend upon whether or not investors continue to participate in the MBS market at the same level as they did prior to the Fed joining the fray. Should yields on mortgages get too low, investors may start to look elsewhere to find better returns, which would tend to temper any decline."
Average mortgage rates and points for conforming residential mortgages for the week ending Oct. 2, according to HSH.com:
Conforming 30-year fixed-rate mortgage
►Average rate: 3.48 percent
►Average points: 0.24
Conforming 5/1-year adjustable-rate mortgage
►Average rate: 2.68 percent
►Average points: 0.19
Average mortgage rates and points for conforming residential mortgages for the previous week ending September 25 were, according to HSH.com:
Conforming 30-year fixed-rate mortgage
►Average Rate: 3.55 percent
►Average Points: 0.25
Conforming 5/1-year adjustable-rate mortgage
►Average Rate: 2.67 percent
►Average Points: 0.19
The HSH.com Weekly Mortgage Rates Radar reports the average rates and points offered on conforming 30-year fixed-rate mortgages and conforming 5/1 ARMs. 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.
