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April 13th, 2009

“Mortgage Rates Firm A Little”

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According to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates Firm A Little,” a quiet week, economically speaking, helped foster the hope that perhaps “if nothing else, the worst of the downturn may be passing.”

“With millions of Americans still hitting the unemployment lines and various market troubles evident everywhere you care to look, it’s way too soon for outright enthusiasm — but perhaps not too early to allow hope to creep back into the national economic lexicon.”

“Low mortgage rates may be at the heart of the improving outlook.”

“The overall average for fixed-rate mortgages — measured by HSH’s all-inclusive FRMI — moved five basis points higher for the week, continuing a series of mild moves in place over the past four weeks. For perhaps the most popular ARM — the 5/1 Hybrid — the overall average rate rose by three basis points to land at 5.27%.”

“With true, private-market jumbo mortgage rates still holding at comparatively lofty levels, jumbo borrowers can’t simply dismiss ARMs as a viable product as easily as conforming borrowers can. Jumbo 5/1 Hybrid ARMs now average 5.52%, just under a full percentage point below comparable jumbo 30-year FRMs, even if those products remain at multi-year lows. The five-year savings of such a choice can be considerable; with a $650,000 loan amount, the five-year difference in interest cost is nearly $30,000.”

“Thirty-year fixed conforming rates moved seven basis points higher for the week, remaining near historic lows, not nearly enough to disturb encouraging patterns of mortgage origination activity. The Mortgage Bankers Association reported that applications for refinancing moved higher by 3.2% during the week ending April 3, but we’re happier to see the 11.1% lift in purchase-money applications, a fifth consecutive week of improvement. Purchase apps are now at their highest level since late January.”

Click here to continue reading “Mortgage Rates Firm A Little.” 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.

Our bloggers:

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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