Steady Rates Amid Big Government Plansby Tim Manni
Despite the anticipation that surrounded the government’s unveiling of their latest housing-rescue initiative, mortgage rates were only marginally inspired. According to the latest issue of HSH’s Market Trends Newsletter, Steady Rates Amid Big Government Plans, “The government’s plans to spend hundreds of billions of dollars to goose the economy, plus hundreds of billions more for housing and mortgage markets, failed to produce much enthusiasm.”
“Mortgage rates held firm throughout considerable market turbulence. The holiday-shortened week saw HSH’s overall average for the cost of mortgage money — our Fixed-Rate Mortgage Indicator (includes conforming, jumbo and ‘expanded conforming’ interest rates) — rise by three basis points to land at 5.79%. The FRMI’s 5/1 Hybrid counterpart rose by a lone basis point to 5.55%. Conforming FRM rates eased to an average 5.22%, while 30-year FRM jumbos rose by eight basis points.”
“Good news is still hard to come by with regards to housing. However, low (if erratic) mortgage rates do seem to be having at least some effect. The National Association of Homebuilders index of member sentiment moved one tick higher in February to land at 9, up from a record low in January. Not much improvement, but some, and three out of the four regions in the survey noted improvement (the Northeast being the exception, but we suspect weather issues played a role there). The survey noted that “traffic of potential buyers” climbed to 11, it’s highest number since October.”
“As mortgage rates eased off last week, applications for mortgages increased, and the “application for purchase” index reported by the Mortgage Bankers Association of America saw its first lift in a month. Refi activity, of course, flared much higher, but we are more encouraged at signs of some homebuying activity.”
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