Mortgage Rates Decline Ahead of Easter in HSH Weekly Report

mortgage ratesInterest rates were down for the two most popular types of mortgage products in the most recent Weekly Mortgage Rates Radar, a weekly report published every Tuesday by the respected real estate portal.

The mortgage rate on 30-year fixed-rate mortgages declined by just one basis point from 3.80 percent to 3.79 percent, while conforming 5/1 adjustable-rate mortgages lost a more substantial seven basis points, dipping from 3.03 percent to 2.96 percent. HSH’s reports cover a wraparound week starting every Wednesday and ending the following Tuesday.

According to vice president Keith Gumbinger, the coming weeks may see “additional volatility” creep into the picture in the coming week, sort of making the past week the calm before the proverbial storm. “Financial markets, like the Federal Reserve, are moving in a ‘data dependent’ mode, so stronger reports may tend to lift interest rates, with weaker reports allowing for declines,” he added. “As the March employment report is due out Friday, and with a few important bits of data out before we get there, a more measurable move for rates later in the week is to be expected. However, the move’s direction will be dictated by the incoming data.”

Although, it is not likely that the Fed is going to increase interest rates until the middle of the year at the earliest, the central bank is keeping a close eye on certain economic statistics, particularly employment, inflation, and wage growth. For the meantime, these variables point to the Fed leaving interest rates at near-zero levels for a little longer, giving consumers a much-needed reprieve from such a move. However, the Fed believes that the rate hike process may be a slow and steady one, and not anything abrupt enough to roil financial markets, whether they be in the U.S. or overseas.

“If labor market conditions continue to tighten, this would tend to move forward the date of the Fed’s first move,” said Gumbinger, predicting when the Fed may raise rates. “Presently, markets expect that the first change to policy may come mid-to-late summer, but a strong March jobs report, or one accompanied by signs of wages rising rapidly, could move this more toward June or July and interest rates might firm accordingly.” He also noted that mortgage rates should “remain fantastic” as consumers gear up for spring home buying season, even in the event of a rate hike.