Rates on the most popular types of mortgages moved in opposite directions this week according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by a single basis point (0.01 percent) to 4.38 percent. Conforming 5/1 Hybrid ARM rates decreased by two basis points (0.02 percent), closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.12 percent.
"Even though the recent economic data has been disappointing, there is considerable optimism that this is only a soft patch, and not the start of a new downturn," said Keith Gumbinger, vice president of HSH.com. "There has been some discounting of the poor January employment report, and the Federal Reserve has expressed no new concerns about the economy's prospects for growth."
In her first appearance before Congress this week, new Federal Reserve Chair Janet Yellen discussed the economy and Federal Reserve policy, and it appears she is comfortable with both the present path for quantitative easing (QE) tapering and the market's reaction to these changes. These reassuring words and some certainty about the Fed's expected actions helped equity markets to rally, driving influential yields back upward. Both stock markets and yields have trended higher in recent days, after a January downturn.
"With Ms. Yellen expressing confidence that the recovery will continue and even accelerate over the coming year, it remains a fair bet that mortgage rates will move higher," said Gumbinger. "However, it's also a fair bet that the path to get us there will be winding at times, so we remain in a "buy on the dips" pattern for mortgage borrowers, who should be prepared to act when these opportunities present themselves."
Average mortgage rates and points for conforming residential mortgages for the week ending Feb. 11, according to HSH.com:
Conforming 30-year fixed-rate mortgage
►Average rate: 4.38 percent
►Average points: 0.15
Conforming 5/1-year adjustable-rate mortgage
►Average rate: 3.12 percent
►Average points: 0.08
Average mortgage rates and points for conforming residential mortgages for the previous week ending Feb. 4 were, 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
