Less-than-stellar economic reports released last week were offset by two bright spots in the economy: gas prices and mortgage rates declined. The reduced pressure on consumers from high gas prices could help revive the muted economy and lower mortgage rates may push the housing market to an even stronger recovery.
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan declined by thirteen basis points (0.13 percent) to 4.32 percent, the lowest mortgage rate since the third week in June. Average rates for 15-year fixed-rate mortgage loans fell by nine basis points (0.09 percent) to 3.48 percent. Rates for FHA-insured, 30-year fixed-rate home loans also declined by nine basis points (0.09 percent) to an average rate of 3.93 percent. The average rate for a 5/1 hybrid adjustable-rate mortgage (ARM), also declined by nine basis points (0.09 percent) to an average rate of 3.06 percent. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
The September employment report, delayed by the government shutdown, revealed that just 148,000 people were hired for the month, falling below already somewhat weak expectations. The unemployment rate dropped down to 7.2 percent, but unfortunately that drop is tied to the number of people who have given up looking for a job. The lowest labor market participation of the recession and recovery (63.2 percent) was reported along with the jobs report.
The lack of strong economic data has led many Federal Reserve-watchers to assume that the Fed will wait until January or March 2014 or later before beginning to taper its bond-buying program.
The mortgage experts at HSH.com anticipate that mortgage rates will stay close to the same this week unless new economic reports that are particularly bad or exceptionally good are released. It's possible that mortgage rates will see a tiny uptick of a few basis points this week.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.