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Mortgage rates were slightly lower on Tuesday. The average 30-year mortgage rate fell one basis point to 4.16% (one basis point equals a hundredth of a percentage point), which equates to a $486.69 monthly payment per $100,000 borrowed. A month ago, the equivalent payment would have been lower by $11.58.

The average 15-year mortgage fell by two basis points, to 3.32%, equating to a $706.08 monthly payment per $100,000 borrowed. A month ago, the equivalent payment would have been lower by $11.17.

Rate (National Average)

Today

1 Month Ago

30-year fixed jumbo

4.66%

4.48%

30-year fixed

4.16%

3.96%

15-year fixed

3.32%

3.09%

30-year fixed refi

4.20%

4.03%

15-year fixed refi

3.34%

3.16%

5/1 ARM

3.53%

3.28%

5/1 ARM refi

3.76%

3.59%

5/1 ARM: ADJUSTABLE-RATE MORTGAGE WITH AN INITIAL FIXED 5-YEAR INTEREST RATE. DATA SOURCE: BLOOMBERG. RATES MAY INCLUDE POINTS.

With holidays approaching, market measures of financial stress approach their low for the year

Bloomberg remarked today that its own U.S. Financial Conditions Index is finishing the year close to zero (from below) and near its highest values for the year, thanks to "a rally in stocks and decline in volatility since the U.S. election."

The index tracks the overall level of stress in the U.S. money, bond, and equity markets to help assess the availability of credit. Values above zero indicate accommodative financial conditions, while negative values are indicative of tighter financial conditions relative to pre-crisis norms.

A similar measure, the St. Louis Fed Financial Stress Index, which is published weekly, appears to confirm that observation. In interpreting the graph below, note that, unlike the Bloomberg index, lower values suggest lower financial market stress:

St Louis Fed Financial Stress Index

The index, which begins in late 1993, is constructed such that the average value is zero, which represents normal financial market conditions. Thus, values below zero suggest below-average financial market stress, while values above zero suggest above-average financial market stress.

For potential homebuyers, more accommodative financial conditions do not mean that mortgage rates won't continue to increase in 2017 (this Fool thinks higher rates are likely). However, an accommodative environment does provide an incentive for banks to continue to make credit available at reasonable rates, and that is all to the good of those who are shopping around for a home (and a mortgage to go with it).

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