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February 15th, 2012

ARM rates fall to record low

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Mortgage and down paymentBelow is the latest “Weekly Mortgage Rate Radar” release from HSH.com, a Wednesday-to-Tuesday wraparound weekly survey of the two most popular types of mortgages. The significance of this release is that it’s published one full day prior to Freddie Mac’s weekly survey:

Rates on the most popular types of mortgages moved in slightly different directions in the past week, according to HSH.com’s Weekly Mortgage Rate Radar. The average rate for conforming 30-year fixed-rate mortgages rose by 3 basis points (0.03 percent) to 4.03 percent. Conforming 5/1 hybrid ARM rates decreased by a single basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.95 percent, a new record low.

“Even with the slight rise in fixed rates this week, it’s hard not to love mortgage rates holding at these levels,” said Keith Gumbinger, vice president of HSH.com. “Right now, there’s not a lot of economic news to push them around much.”

“Low rates are of course good for homeowners looking to refinance, but the fact that rates also remain stable is important for homebuyers, since it can take months for a purchase transaction to go through,” Gumbinger explained.

Sharp moves in rates, especially upward, can change the terms of a real estate deal. “A bump in rates lowers the mortgage amount that can be borrowed,” said Gumbinger. “If the bump is large enough, it can ruin a potential transaction. On the other hand, a sharp drop in rates might bring more bidders for a given property,” increasing the asking price.

Average mortgage rates and points for conforming residential mortgages for the week ending February 14 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  •     Average rate: 4.03 percent
  •     Average points: 0.27

 

Conforming 5/1-year adjustable-rate mortgage

  •     Average rate: 2.95 percent
  •     Average points: 0.23

 

Average mortgage rates and points for conforming residential mortgages for the previous week ending February 7 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage

  •     Average rate: 4.00 percent
  •     Average points: 0.25

 

Conforming 5/1-year adjustable-rate mortgage

  •     Average rate: 2.96 percent
  •     Average points: 0.20

Methodology
The Weekly Mortgage Rate Radar reports the average rates and points offered on conforming 30-year fixed-rate mortgages and conforming 5/1 ARMs. The weekly mortgage rate survey covers a large sample of mortgage lenders and is conducted over a Wednesday-to-Tuesday cycle, with data released every Wednesday. HSH.com’s survey helps consumers find the best rates on home loans in changing market conditions. Unlike mortgage rate surveys that report average rates only, the Weekly Mortgage Rate Radar’s inclusion of both average rates and average points provides a more accurate view of mortgage terms currently offered by lenders.

Every week, HSH.com conducts a survey of mortgage rate data for a wide range of consumer mortgage products including ARMs, FHA-backed and jumbo mortgages, as well as home equity loans and lines of credit from hundreds of direct lenders in the U.S. For information on additional loan products, visit HSH.com.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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