Mortgage rates leveled off last weekby Tim Manni
Despite all the volatility in the markets recently which has mainly served to push rates higher, mortgage rates leveled off last week as we prepare to hear the Fed’s action plan for tapering their Quantitative Easing efforts.
Below is an excerpt from of our latest Market Trends newsletter, Keith Gumbinger’s weekly examination of the economic conditions that influenced mortgage rates. Sign up to receive the Market Trends in your inbox Friday evening.
Conforming mortgage rates barely moved
HSH.com’s broad-market mortgage tracker–our weekly Fixed-Rate Mortgage Indicator–found that the overall average rate for a 30-year fixed-rate mortgages (conforming, non-conforming and jumbos) rose by the smallest possible amount, just a single basis point (0.01 percent) to 4.76 percent during the week ending September 13.
The overall average rate for a 15-year fixed-rate mortgages (conforming, non-conforming and jumbos) also added a lone basis point (0.01 percent) to the previous week’s figure, climbing to 3.83 percent.
FHA-backed 30-year fixed-rate mortgages climbed a more stout six basis points, climbing to 4.42 percent.
The overall 5/1 Hybrid ARM moved by only two hundredths of a percentage point (0.02 percent) to a relative bargain of 3.47 percent for the week.
Mortgage rates still at two-year highs
We head into this week at better than two-year highs for mortgage rates.
The Fed will of course consider this in their deliberations on Tuesday and Wednesday, and they will no doubt take notice of the number of announced layoffs due to slowing mortgage activity.
While mortgage rates do remain very favorable, at least compared against most of modern history, the fast bump in rates will take time to be overcome by growing hiring and increasing wages. However, the sluggish economy isn’t throwing off much in that way, and it does appear that we will have a slow spell at the very least to wade through as we close 2013.
Will mortgage rates rise or fall this week?
It’s a toss-up for mortgage rates this week.
In addition to the Fed’s decision, there are some important indicators due out, including the latest from the National Association of Homebuilders, housing starts and permits, existing home sales, CPI industrial production and more.
An active week seems on tap, but we think mortgage rates will managed to hold pretty tight to present levels. Call it a movement of a couple of basis points in either direction, dependent upon the firmness of the data.