Mortgage rates pushed upward and are likely to do so again as long as investors continue to flood into the stock market. Yet other factors, such as low inflation, a weak job market and the commitment of the Federal Reserve to keep interest rates low are a counterweight to the upward pressure on mortgage rates. Borrowers may not like the slight uptick in rates, but mortgage rates are still near their historic lows.
According to HSH.com, last week the overall average rate for a 30-year fixed-rate home loan rose by 8 basis points (0.08 percent) to 3.76 percent. Average rates for 15-year fixed-rate mortgage loans rose by 7 basis points (0.07 percent) to 2.98 percent. FHA-insured, 30-year fixed-rate home loan rates also rose by 5 basis points (0.05 percent) to an average rate of 3.36 percent. The average rate for a 5/1 Hybrid Adjustable Rate Mortgage (ARM) stayed close to its record low rate, rising just 2 basis points (0.02 percent) to 2.61 percent. The gap between ARMs and fixed-rate loans widened again which could spur new interest in this, the most popular ARM loan product. Compare mortgage rates for your area before refinancing or applying for a purchase loan.
Slower growth around the globe, including in Europe and China, has kept prices low for imports into the U.S. but also reduced demand and kept prices low for exports. Manufacturing reports in New York State and the Philadelphia Federal Reserve district showed poor conditions in May. Even the employment numbers, which had been encouraging, took a turn for the worse during the week ending May 11, when 360,000 new applications for unemployment were filed. This was not only 32,000 more applications than the previous week, but also the highest number since March.
On the positive side, the index of Leading Economic Indicators shows that we could see some improvement in economic growth this summer. The mortgage experts at HSH.com anticipate that rates will rise a little again this week.
Our live database of current mortgage rates can help you find the best mortgage rates in your area.