Zillow: Mortgage Rates Decline After Six Weeks of Increases

For the first time in six weeks the Zillow Mortgage Rate Ticker finds the average rate for the 30-year fixed rate mortgage to be lower than the week before, a drop of five basis points to 3.88% as of Tuesday afternoon.

For most of the past week the rate hovered between 3.84% and 3.94%, although it hit 3.79% at one point last Friday.

“Rates dipped this week after rising for six consecutive weeks on anticipation that the Fed may slow the pace of the quantitative easing stimulus program early,” said Erin Lantz, director of Zillow Mortgage Marketplace. “This coming week, rate movements will be guided by Wednesday’s press conference to discuss the FOMC’s latest meeting.

“If Chairman Ben Bernanke suggests the Fed is considering accelerating the wind-down of the stimulus program, we expect rates to continue to climb. If instead, Bernanke expresses renewed concerns about the strength of the economic recovery and implies that a longer stimulus period is needed, then rates may retreat closer to levels we saw through the first four months of the year.”