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December 12th, 2012

Mortgage rates hold near record lows, refis rise

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3-Federal-ReserveRates on the most popular types of mortgages were mostly flat, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages was unchanged at a record low of 3.45 percent. Conforming 5/1 Hybrid ARM rates increased by a lone basis point, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.68 percent.

“A mixed batch of economic data over the last week has kept mortgage rates directionless,” said Keith Gumbinger, vice president of HSH.com. “Markets may be moved a little one way or the other after today’s Federal Reserve meeting, but if the Fed acts as expected, there should be little change to mortgage rates as a result.”

Another Fed program expected

Gumbinger expects the Federal Reserve to announce a new round of bond buying to stimulate the economy. This program would replace the Fed’s present Operation Twist, which concludes at the end of the month.

“Low interest rates have been critical to the housing recovery, and the Fed wants to keep the market moving. A new program of purchasing Treasury bonds, coupled with purchases of Mortgage Backed Securities under QE3, should keep record low or near-record low mortgage rates available for some time to come,” added Gumbinger.

Mortgage application move higher

For the week ending December 7, mortgage applications were on the rise once again. According to the Mortgage Bankers Association’s weekly survey, overall mortgage applications rose 6.2 percent. Refinance applications were up 8 percent from the week prior. At the end of last week, refinance applications were at their highest point since October 12.

“Continued uncertainty due to the lack of resolution regarding the fiscal cliff led interest rates lower last week, with mortgage rates reaching a new low in our survey,” said Mike Fratantoni, MBA’s Vice President of Research and Economics in a statement. “Refinance activity increased, with the refinance index hitting its highest level in two months, and the refinance share reaching its highest level since January 2009.  Applications for purchase increased for a fifth consecutive week, and are running almost ten percent above their level at this time last year.”

Refinancers react to low rates

Not only did the refinances increase from 82 percent to 84 percent of total applications from the week prior, the share of HARP refinances increased from 27 to 29 percent.

This data indicates that consumers are still reacting to low mortgage rates. The way we see it, low mortgage rates will continue to be with us at least into the first part of the new year. Whether you’re considering a purchase or a refinance, be sure to check out current mortgage rates on HSH.com.

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One Response to “Mortgage rates hold near record lows, refis rise”

  1. Roberto Says: December 12th, 2012 at 5:21 pm

    It does no one any good to have mortgage rates so low and not be able to refinance or take advantage of such rates because one has poor credit. I’ve heard Lexington Law is the place to really help get your credit repaired and under control. It’s important to take advantage of these historic low mortgage rates. http://www.lexingtonlaw.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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