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March 30th, 2009 (Modified on March 31st, 2009)

“New Record Low for Conforming Loans”

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All things considered, last week was a pretty good one for not only Wall Street, but for Main Street as well. According to the latest issue of HSH’s Market Trends Newsletter, New Record Low for Conforming Loans, “After a big Wall Street “rally,” it’s not an uncommon pattern for some reversal to take place. A week ago, a Fed-announced plan to purchase certain Treasuries caused about a half-percent decline in 10-year Treasury yields, the biggest one-day move in several decades. [Last] week, a considerable portion of that was given back amid warmer economic news and lots of available supply. Even so, conforming mortgage rates fell to a new low as consumer demand picked up sharply.”

“That 10-year Treasury yield slipped from 3.02% on Tuesday 3/17 to 2.51% on Wednesday, 3/21… but more or less rose steadily to 2.81% this Wednesday before backing off some. As discussed here last week, the once-mighty influence of the 10-year TCM on mortgage rates has become less mighty in the past year or so, and we thought only half of the rally might make it through to the average 30-year FRM. With a daily decline last week from 5.15% Wednesday to Thursday’s 4.94%, that’s almost exactly what we got. Since then, though, rates have reversed course, again following to some degree the reversal in yields of the Treasury. The 4.94% of last Thursday turned into a 5.06% figure by this Wednesday, an increase slightly less than one-half that seen in the 10-year TCM.”

“For the week, the overall average for fixed-rate mortgage money measured by HSH’s Fixed-Rate Mortgage Indicator eased by eight basis points (.08%) to close the final full week of March at 5.54% The FRMI’s 5/1 Hybrid companion shed six basis points, finishing HSH’s weekly survey at 5.30%. Jumbo 30-year FRMs trended back by thirteen basis points to 6.50% (an average that puts it on par with those seen back in May 2007), and the final weekly average for 30-year conforming FRMs nudged six basis points lower from last week to a new record low of 5.01% + 0.27 points.”

Click here to continue reading “New Record Low for Conforming Rates.” 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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