HSH.com Weekly Mortgage Rates Radar: Rates Tick Lower Again

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HSH.com releases its latest Weekly Mortgage Rates Radar showing another small decline for mortgage rates in the seven day period ending October 8, as the government shutdown continues to gum up the mortgage industry. The Weekly Mortgage Rates Radar reports the average rates and points offered by lenders for the two most popular types of mortgages, the conforming 30-year fixed-rate mortgage and the conforming 5/1 adjustable-rate mortgage (ARM).

Rates are lower than at any time since early summer, and borrowers are of course responding to them. For the moment at least, lenders are happy to take applications but without needed verification of tax filings, loan closings may be delayed.

Rates on the most popular types of mortgages continued along a slight downward path according to HSH.com's Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages fell by four basis points (0.04 percent) to 4.34 percent. Conforming 5/1 Hybrid ARM rates decreased by six basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 3.21 percent.

"Mortgage rates drifted lower this week, but the rate of decline has slowed," said Keith Gumbinger, vice president of HSH.com. "The influence on mortgage rates from the Fed's surprise inaction late last month is now behind us, and important economic signals such as the Employment Report have been interrupted by the government shutdown. Without clarity as to where we are or where we might go, investors are acting cautiously."

Investors aren't the only ones without a clear sense as to how to proceed. At least some mortgage shoppers are in a kind of document limbo, as the IRS is closed so is not responding to requests for tax return verifications, authorized by a document called the 4506-T.

Although Fannie Mae and Freddie Mac require a verification of filed tax returns, it is technically possible at some point that this requirement could be waived, or a waiver of liability could be offered to lenders originating loans without these verifications. However, this is unlikely to happen unless the housing market approaches a standstill.

"Rates are lower than at any time since early summer, and borrowers are of course responding to them," adds Gumbinger. "For the moment at least, lenders are happy to take applications but without needed verification of tax filings, loan closings may be delayed. The longer the shudown persists, the more severe these delays will become."

Average mortgage rates and points for conforming residential mortgages for the week ending October 08, according to HSH.com:

Conforming 30-year fixed-rate mortgage
-Average rate: 4.34 percent
-Average points: 0.18

Conforming 5/1-year adjustable-rate mortgage
-Average rate: 3.21 percent
-Average points: 0.13

Average mortgage rates and points for conforming residential mortgages for the previous week ending October 01 were, according to HSH.com:

Conforming 30-year fixed-rate mortgage
-Average Rate: 4.38 percent
-Average Points: 0.17

Conforming 5/1-year adjustable-rate mortgage
-Average Rate: 3.27 percent
-Average Points: 0.12

Methodology
The Weekly Mortgage Rates Radar reports the average rates and points offered on conforming 30-year fixed-rate mortgages and conforming 5/1 ARMs. The weekly mortgage rate survey covers a large sample of mortgage lenders and is conducted over a Wednesday-to-Tuesday cycle, with data released every Wednesday. HSH.com’s survey helps consumers find the best rates on home loans in changing market conditions. Unlike mortgage rate surveys that report average rates only, the Weekly Mortgage Rates Radar’s inclusion of both average rates and average points provides a more accurate view of mortgage terms currently offered by lenders.

Every week, HSH.com conducts a survey of mortgage rate data for a wide range of consumer mortgage products including ARMs, FHA-backed and jumbo mortgages, as well as home equity loans and lines of credit from hundreds of direct lenders in the U.S. For information on additional loan products, visit HSH.com.

About HSH.com
HSH.com is a trusted source of mortgage data, trends, news and analysis. Since 1979, HSH’s market research and commentary has helped homeowners, buyers and sellers make smart financial choices and save money on mortgage and home equity products. HSH.com, of Riverdale, N.J., is owned and operated by QuinStreet, Inc. (NASDAQ: QNST), one of the largest Internet marketing and media companies in the world. QuinStreet is committed to providing consumers and businesses with the information they need to research, find and select the products, services and brands that best meet their needs. The company is a leader in ethical marketing practices. For more information, please visit QuinStreet.com.

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Alex Bryant
HSH.com
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