Rates on the most popular mortgage types edged higher, 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 4.24 percent. Conforming 5/1 Hybrid ARM rates increased by four basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.18 percent.
"Mortgage rates have lifted a little from recent bottoms, but with an uneven economy and plenty of troubles in the world, they are unlikely to go too far," said Keith Gumbinger, vice president of HSH.com. "Of late, there has been just enough good economic news to see rates firm a little, but they remain both favorable and considerably below the high-water marks of the year."
Thirty-year fixed mortgage rates began the year averaging over 4.6 percent, and have surprised potential homebuyers by declining for much of the spring. The drop in rates could be laid at the feet of a number of factors, with a soft economy, slack demand for credit and low inflation chief among them, let alone global issues which pull money into U.S. markets, driving rates down. All this has come in the context of a pullback by the Federal Reserve, which was expected to lift interest rates, but hasn't so far.
"The Federal Reserve concludes a two-day meeting today, and another $10 billion trim to QE is expected," adds Gumbinger. "However, the expected effect on rates from the diminishment of the program hasn't happened; private investors have picked up where the Fed has left off, snapping up Treasury bonds and high-quality Mortgage-Backed Securities. Provided investors keep up the pace, we don't need the Fed to keep rates low, as the market is doing it by itself."
Average mortgage rates and points for conforming residential mortgages for the week ending June 17, according to HSH.com:
Conforming 30-year fixed-rate mortgage
►Average rate: 4.24 percent
►Average points: 0.23
Conforming 5/1-year adjustable-rate mortgage
►Average rate: 3.18 percent
►Average points: 0.10
Average mortgage rates and points for conforming residential mortgages for the previous week ending June 10 were, according to HSH.com:
Conforming 30-year fixed-rate mortgage
►Average rate: 4.23 percent
►Average points: 0.17
Conforming 5/1-year adjustable-rate mortgage
►Average rate: 3.14 percent
►Average points: 0.08
