First mortgage rate increase in two monthsby Tim Manni
The conforming 30-year fixed-rate mortgage experienced its first increase since August, according to the latest mortgage rates report from HSH.com.
HSH.com’s Weekly Mortgage Rates Radar found that the average rate for conforming 30-year fixed-rate mortgages rose by four basis points (0.04 percent) to 3.52 percent. It was the first increase in the average rate for the most popular loan choice since mid-August.
However, the conforming 5/1 Hybrid ARM rates remained unchanged, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.68 percent.
“Some positive news about the economy late last week pushed aside some of the gloom”, said Keith Gumbinger, vice president of HSH.com. “The employment picture brightened a little bit and some measures of economic activity moved a bit higher. This stopped the recent decline in mortgage rates and caused a modest bump in the fixed-rate average this week.”
Rising rates signal improving conditions
Poor economic news fosters a lower interest rate environment, as investors discount the prospects for future inflation, and the demand for many kinds of credit slows, along with other considerations such as Federal Reserve policies.
“The lowest mortgage rates often come in the midst of the bleakest economic conditions,” added Gumbinger, “but thankfully, we seem to be holding onto a modest growth pattern. The recent news even adds some optimism that the economy might gain a little steam in the coming months.”