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November 3rd, 2008

Monday’s Market Trends Recap

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The most recent issue of HSH’s Market Trends Newsletter, “Mortgage Rates: It’s All About Change,” leads off by discussing last week’s rise in mortgage rates:

October 31, 2008 — Rates go up, rates go down, and back around we go. Home mortgage rates spiked higher this week, as it appeared that at least some money stuffed into shelter amid the recent market storms came back out to play again in equity markets. Stock markets sprung higher, dragging interest rates upward, as the continuing search by investors trying to rebalance uneasy portfolios continues to whipsaw different markets at different times.

The overall cost of mortgage money, as gauged by HSH’s Fixed-Rate Mortgage Indicator (FRMI), spiked 34 basis points (.34%) higher, making it the third consecutive week of at least a 30-basis-point movement in rates. However, the swings from week to week are becoming somewhat smaller; they’ve moved 40 basis points up, then 37 down, and now 34 up again. Five-one Hybrid ARMs jumped 11 BP, leaving the most popular alternative to the traditional 30-year fixed rate at 6.80%.

The issue moves on to report on last week’s economic indicators that impacted the movement of the market as well as consumers:

Still, there are encouraging signs here and there which get pushed out of the headlines, downplayed, or outright ignored. Take home sales, for example: last week, Existing Home Sales popped much higher than expected, only to have detractors claim that they would have fallen if not for discounted prices for foreclosures. That’s equivalent of saying “That store would have closed except for that big half-off sale!” The point here is that even good news — in this case, that home sales are rising — is too often treated with scorn.

HSH’s free weekly Market Trends Newsletter, an in-depth analysis of various financial markets of the week prior, is published every Monday. Email subscribers — receive it in your inbox by Friday night, so sign up today!

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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