Mortgage interest rates on popular types of home loans were down for the most part in the latest HSH.com Weekly Mortgage Rates Radar. The streamlined weekly report, which now covers only 30-year fixed-rate mortgages and 5/1 adjustable-rate mortgages, covers the wraparound week of Wednesday to Tuesday and reports rates on conforming mortgages based on data from a “large sample of mortgage lenders.”
30-year fixed-rate mortgages, which were previously at 3.92 percent, dropped three basis points to 3.89 percent on the HSH report released Tuesday, March 17, 2015. 5/1 hybrid ARM rates, on the other hand, were also down slightly, ticking down two basis points from 3.12 percent to 3.10 percent. And based on the wraparound week’s trends, it looks like there was not much movement due to the hot-and-cold tenor of recent economic reports, as well as the lack of clarity regarding the U.S. Federal Reserve’s continued use of the word “patient” in its language pertaining to an inevitable interest rate hike.
“Mortgage rates have been fairly volatile in the past few weeks, driven by stronger or weaker economic reports,” said HSH.com vice president Keith Gumbinger in a statement explaining the recent week’s trends. “The Federal Reserve has made it pretty clear that the economy’s behavior and especially that of labor markets and inflation will be the key factors in deciding just when to start to raise short-term interest rates. However, with the data of late as mixed as the Fed’s message about the timing of any change, interest rates have become less settled.”
One of the recently-released economic reports worth mentioning is the February employment report, which showed that the U.S. economy again was able to create more than 200,000 jobs, and that the jobless rate dropped to 5.5 percent, which signals “full employment” based on the Fed’s standards. However, inflation statistics remain very soft, especially with oil prices still low and wage gains quite lacking, among other variables.
For the coming week, Gumbinger is not sure at this point in the game how mortgage rates will gyrate; he believes it will all depend on the Fed’s monthly policy meeting, which starts today. “That said, the updated economic projections due at the same time may reveal more clues as to the likely date of ‘liftoff’ for interest rates,” he continued. “Without better clarity, volatility for rates is likely to continue.”
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