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April 6th, 2009

“Rates Still Easing; New Record Low for Conforming”

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For any potential home buyers out there deciding whether or not to pursue a home loan, this may be your sign.  According to the latest issue of HSH’s Market Trends Newsletter, “Rates Still Easing; New Record Low for Conforming,” while some economic news improved last week, Conforming loan rates fell to a new record low.

“Perhaps the week’s decline in mortgage rates and the improvement in stocks was a coincidence, but it was the first week in a while without any major new government initiative to roil the markets.”

“Overall, fixed-rate mortgages eased back by seven basis points (.07%), closing the first survey week of April at 5.47%, the lowest average rate for HSH’s Fixed-Rate Mortgage Indicator since late June 2003. For its part, the FRMI’s a 5/1 Hybrid counterpart shed six basis points to finish the survey week at 5.24%.”

“Conforming 30-year FRM tripped back by four basis points to their latest record-low average, just below 5%. Jumbo 30-year FRMs continued to decline; the week’s 6.44% puts us back at rates last seen two years ago this week.”

“Since the turn of the decade, some 480 weeks have elapsed. Those contending that jumbo rates are “too high” would do well to learn that only 166 of those 480 weeks have featured an average interest rate below this week’s value — and that the remaining 314 have not only been above (but often well above) today’s figure. As a reference point, we are only about 89 basis points from the decade’s low average for Jumbos, but 253 below the high.”

Click here to continue reading “Rates Still Easing; New Record Low for Conforming.” 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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2 Responses to ““Rates Still Easing; New Record Low for Conforming””

  1. Vish Gajendran Says: April 6th, 2009 at 6:47 pm

    The lenders have so far not implemented the new limits(same as the enhanced limits set in 2008) for super conforming high balance mortgages as announced by Fannie Mae late March.Is there any explanation?

  2. Tim Manni Says: April 7th, 2009 at 12:25 pm

    Vish,

    Thanks for your question. The explanation is that since Congress changed the new limit, the entire market place has to play catch-up, and that includes updating all of their old software (including at Fannie Mae). It’s easier to write something into law than it is for lenders to implement it. The flip-flopping in jumbo-loan limits not only throws a monkey wrench in the high-balance loan business for lenders, it creates a lot of consumer confusion as well. A price in which a consumer once could get a loan at, and now they can’t, has a huge impact on borrowing behavior. Something announced in March, may not be functional until months later.

    I hope that helps answer your question. Visit us again soon,
    Tim

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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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