Rates on the most popular types of mortgages downshifted again according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by nine basis points (0.09 percent) to 4.37 percent. Conforming 5/1 Hybrid ARM rates decreased by a full tenth of a basis point(0.10 percent), closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.14 percent.
"The economic news of late has been somewhat worrisome, sending investors to seek shelter in the relative safety of bonds," said Keith Gumbinger, vice president of HSH.com. "Much to the benefit of mortgage shoppers, this move is dragging down yields and mortgage rates. As folks have been expecting rising mortgage rates as they look to purchase or refinance their homes this winter, this is a nice surprise."
Belying a more upbeat assessment about the economy from the Federal Reserve, a varied group of data has pointed to a stumble in the economy for December and possibly January. Despite these signals, the Federal Reserve again chose to reduce the amount of extraordinary economic support being provided to the economy, trimming so-called QE purchases of Treasury Bonds and Mortgage-backed Securities by another $10 billion last week. To the extent that these purchases have propped up the economy, growth may be diminished in kind as it is reduced.
Gumbinger adds, "The reduction in Fed support, slowing manufacturing activity here and in China, some less-than-stellar figures on consumer spending, housing and more are causing some concern that the economy has decelerated over the last couple of months. With the latest GDP report showing only a fair 3.2 percent rate of growth in the fourth quarter of last year, the economy doesn't need to slow very much to put us back into the kind of funk we've been hoping to escape since the recovery began several years ago."
Average mortgage rates and points for conforming residential mortgages for the week ending Feb. 4, according to HSH.com:
Conforming 30-year fixed-rate mortgage
►Average rate: 4.37 percent
►Average points: 0.15
Conforming 5/1-year adjustable-rate mortgage
►Average rate: 3.14 percent
►Average points: 0.10
Average mortgage rates and points for conforming residential mortgages for the previous week ending January 28 were, 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
