Fear of Fiscal Cliff Causes Rate Fluctuation

Rates on the most popular types of mortgages moved both up and down this week, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages (FRMs) rose by six basis points (0.06 percent) to 3.55 percent. Conforming 5/1 Hybrid ARM rates decreased by a single basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at average 2.67 percent. "With a partial deal reached to pull us back off the 'fiscal cliff,' markets breathed a sigh of relief," said Keith Gumbinger, vice president of HSH.com. "Money flowed out of safe-haven hiding places in Treasuries and back into stocks, lifting yields and mortgage rates a little." The agreement reached last week covered the tax portion of the program, but a broad agreement on spending cuts was kicked down the road for a couple of months. A deal on spending cuts may happen at a time when fighting over the raising the nation's debt ceiling is in full swing, so the present optimism may fade in coming weeks. "This mild flare higher in mortgage rates has already started to retreat somewhat. With Federal Reserve programs fully in place to keep overall and especially mortgage rates low it continues to be a fantastic opportunity to buy a home or refinance,” said Gumbinger. Average mortgage rates and points for conforming residential mortgages for the week ending Jan. 8, according to HSH.com: Conforming 30-year fixed-rate mortgage ►Average rate: 3.55 percent ►Average points: 0.26 Conforming 5/1-year adjustable-rate mortgage ►Average rate: 2.67 percent ►Average points: 0.20 Average mortgage rates and points for conforming residential mortgages for the previous week ending Jan. 1 were, according to HSH.com: Conforming 30-year fixed-rate mortgage ►Average Rate: 3.49 percent ►Average Points: 0.24 Conforming 5/1-year adjustable-rate mortgage ►Average Rate: 2.68 percent ►Average Points: 0.22