Rates on the most popular types of mortgages continued to decline, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by six basis points (0.06 percent) to 3.69 percent. Conforming 5/1 Hybrid ARM rates decreased by just two basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.94 percent.
“The appreciable decline in mortgage rates continued again this week, but we may be nearing the end of it, at least for the moment,” said Keith Gumbinger, vice president of HSH.com. “Gloomy global markets have brightened a little in the past few days, and influential yields have rebounded a bit after weeks of regular declines.”
Ten-year U.S. Treasuries have a strong influence on fixed-rate mortgages, and in recent days yield on these have fallen regularly as investors moved their money out of the way of plummeting equity prices. In turn, this has pulled down mortgage rates.
Last week, Federal Reserve Chair Janet Yellen spoke before Congress and left open the possibility that the Fed may still raise short-term rates this year, something which is at odds with recent global economic trends. However, after an initial poor reaction to this idea, investors apparently considered it in greater context, including a recent bit of more positive economic data with January retail sales and consumer sentiment measures in their assessment. This caused a perceptible change in the direction of yields and mortgage rates, which on a daily basis have nudged higher on Friday and Tuesday from a Thursday low point of HSH.com’s survey week.
“Mortgage rates have stopped falling for the moment, and should the nascent trend hold, may even rise a little bit this week,” added Gumbinger. “Regardless, the considerable fall in rates since the turn of 2016 has produced an unexpected opportunity for homeowners and homebuyers. That said, markets are fickle and rarely continue in one direction for very long, so a bounce higher for rates isn’t unexpected. Borrowers should always consider locking in rates that make their purchase or refinance deal work without delay.”