“New Year, Same Low Rates (for most)”by Tim Manni
By the end of last week, market analysts got their first indications of activity for the new year. From the latest issue of HSH’s Market Trends newsletter: “Mortgage rates were basically unchanged [last] week, which included the first days of 2009. Thinly traded markets, vacations and holidays being what they are, a lack of any real direction is pretty typical.
Overall, the average 30-year fixed rate mortgage nudged a lone basis point higher. HSH’s Fixed-Rate Mortgage Indicator FRMI rose to 5.89%. The overall average for the 5/1 Hybrid ARM slipped back by fourteen basis points, landing at 5.80% for the week, the lowest such average since February 2008.
Now that investors have closed the books on 2008, we may start to see some money shift away from low-yielding but highly secure investments, especially Treasuries. With a new administration coming in, new opportunities may present themselves as the government moves ’stimulus’ off the drawing board and into the economy. However, as long as the economy remains in difficult straits, it is a fair bet that not all that much risk-taking will come anytime soon.”
How will mortgage rates fair during their first full week of the new year? “If previous years are any indications we should see a flare higher in mortgage-related activity, a resumption of more-volatile markets, and probably, slightly higher interest rates as investors begin to reposition for the period just ahead. If the 10-year Treasury is any indication, rates may tick a little higher early next week.”
Click here to read the rest of “New Year, Same Low Rates (for most).” 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.