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October 17th, 2012

Mortgage rates move upward ever so slightly

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int rate QMarkLast week, we reported the first mortgage rate increase in two months. The conforming 30-year fixed-rate increased by 0.04 percent. The good news is that this week the conforming 30-year fixed-rate is unchanged.

According to our Mortgage Rates Radar, the latest mortgage rates report from HSH.com, while the average rate for conforming 30-year fixed-rate mortgages was unchanged for the week, holding at 3.52 percent, conforming 5/1 Hybrid ARM rates increased by two basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.70 percent.

“Mortgage rates have nudged up off record lows, but they really have nowhere to go,” said Keith Gumbinger, vice president of HSH.com. “The Federal Reserve’s program to keep them low is meeting a little resistance from a slightly warmer economic climate, but that’s merely sufficient to keep rates from falling.”

A range of economic reports, from employment and consumer moods to retail sales have all been stronger recently.

“If the economy continues to show signs of improvement this fall, mortgage rates could firm a little more. For that to occur though, we’ll need a lot more evidence that forward momentum is building, “Gumbinger added. “Meanwhile, a fantastic opportunity to refinance or purchase a home with a record low mortgage rate remains firmly in place.”

Playing the mortgage-rate-waiting game

For years now we’ve been warning readers not to play the mortgage-rate-waiting game. As soon as mortgage rates begin to rise off record lows (and it has happened several times in the last three years alone), some borrowers who are ready to begin the mortgage process and those ready to transact retreat to the sidelines to wait for mortgage rates to fall once more.

As we’ve warned, this can be a risky game to play.

The best advice we can give is to always be prepared. If you’re planning on buying or refinancing, have a mortgage rate in mind so if rates begin to rise, you’ll be able to lock in quickly and save. Waiting for rates to fall “just a little bit lower” can get you into trouble if rates decide to shoot upwards.

All that said, you need to remember that recent upward movements have been slight at best, and there still isn’t enough positive force to send mortgage rates upward very quickly.

One final thing to remember: mortgage rates always rise faster than they fall.

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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.

Our bloggers:

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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