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November 10th, 2008

Monday’s Market Trends Recap

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HSH’s latest issue of its Market Trends Newsletter, “Mortgage Markets, Election Aftermath,” discusses the election’s influence on the movement of last week’s mortgage rates. As the Fed pondered loans for the auto industry, factory orders and manufacturing activity declined, yet despite job cuts worker productivity increased:

In the weeks leading up to the election, mortgage rates bounced higher and lower by unusually large amounts on a week to week basis. This week was a little different, in that the size of the up and down stroke diminished somewhat. Swings in rates have been up 40 basis points, down 37, up 34 again and down again this week. Perhaps we are trending back toward a more stable period.

The overall cost of mortgage money, as gauged by HSH’s Fixed-Rate Mortgage Indicator (FRMI), eased by 17 basis points (.17%), landing at an average 6.88%. The overall average for the five-one Hybrid ARMs shed 11 BP, finishing the survey week at 6.70%.

Conforming 30-year FRMs dipped by the same 17 basis points seen in the FRMI, closing HSH’s national survey at 6.38%, while private-market jumbos declined a lesser 13 basis points.

HSH’s Market Trends Newsletter provides an in-depth analysis of various financial markets, and gauges the cause and influence of numerous economic indicators:

Manufacturers across the board could use some support. The weak dollar and fair economies of our trading partners lent support to them for much of this downturn, but the financial crisis has now spread far beyond our borders. Without access to financing, and amid considerable uncertainty about their economies and ours, orders have screeched to a halt over the past two months. Factory Orders from September noted a 2.5% decrease, and that followed a 4.3% decline in August. It was unsurprising, then, that the Institute of Supply Management (ISM) survey of manufacturing activity downshifted hard in October, landing at a reading of 38.9, below already low expectations and a wide gap from even the 50 level which would represent at least a break-even level. The only bright spot in the ISM report was that price pressures so evident as recently as June have virtually vanished.

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! Also, be sure to check in with our Market Trends blog for all news relating to any weekly shift in mortgage rates.

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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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