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HSH.com: Mortgage Rates Continue to Tumble

NationalMortgageProfessional.com
Jan 29, 2014

Rates on the most popular types of mortgages eased for a third-consecutive week, according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by four basis points (0.04 percent) to 4.46 percent. Conforming 5/1 Hybrid ARM rates decreased by another lone basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.24 percent. "After trending lower due to the soft December employment report, some additional economic worries have helped mortgage rates to fall further," said Keith Gumbinger, vice president of HSH.com. "A preliminary January report suggests that growth in China may be slowing more than was expected, which has implications for many economies around the world that depend upon exports. This is coupled with a Federal Reserve that intends to provide less economic support going forward, which could exacerbate the slowing. Sensing this, many investors decided that it is safer to stash money in Treasuries, driving yields and mortgage rates lower." The Federal Reserve wraps up a two-day meeting today, as Ben Bernanke's tenure comes to a close and we welcome a new chair in Janet Yellen. It is expected that the Fed will continue to reduce purchases of Treasuries and mortgage-backed securities at a measured pace throughout 2014, but the recent softer data may provide a reason to skip making a change here and there in favor of a more cautious, data-driven approach. "While it is likely that the Fed will announce another reduction in QE purchases today, there is a chance they will hold off as they take time to fully evaluate the market's response to December’s program trim, which is only now being fully realized," said Gumbinger. "The first $10 billion reduction didn't seem to have too much impact overall on the mortgage market as mortgage rates are already well off their lows. In the weeks since the change occurred, interest rates have actually declined, so the Fed will probably feel that there is little risk to housing or financial markets by cutting back some more." Average mortgage rates and points for conforming residential mortgages for the week ending Jan. 28, according to HSH.com: Conforming 30-year fixed-rate mortgage ►Average rate: 4.46 percent ►Average points: 0.16 Conforming 5/1-year adjustable-rate mortgage ►Average rate: 3.24 percent ►Average points: 0.10 Average mortgage rates and points for conforming residential mortgages for the previous week ending Jan. 21 were, according to HSH.com: Conforming 30-year fixed-rate mortgage ►Average rate: 4.50 percent ►Average points: 0.21 Conforming 5/1-year adjustable-rate mortgage ►Average rate: 3.25 percent ►Average points: 0.11
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