“Mortgage Rates and the ‘Unofficial’ Start of Summer”by Tim Manni
According to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates and the ‘Unofficial’ Start of Summer,” despite entering their annual “summer lull” somewhat early this year, 30-year conforming interest rates remain more than a full percentage point below figures seen last year.
“It’s worth noting that last year’s season began in the wake of the forced takeover of Bear Stearns by JPMorgan and ended with the failure of Fannie Mae, Freddie Mac, and Lehman Bros, as well as other assorted troubles. It does seem likely that this summer will be quieter and much more stable on balance, but the economy remains troubled, if on a lessening basis.”
“Low mortgage rates are among the bright spots in the economic landscape, promoting greater solvency among banks and lenders, and helping households to recast their obligations into more favorable terms.”
“HSH’s Fixed-Rate Mortgage Indicator (FRMI), a gauge of the overall cost of 30-year mortgage credit which includes conforming, jumbo and “high-limit” conforming data, rose by three basis points, landing at 5.46% for the week. The FRMI’s hybrid 5/1 counterpart sported a single basis point move, closing the survey period at 5.05%.”
“Both conforming and jumbo 30-year FRMs wandered just a few basis points; conformings moved up by one, and jumbos just two.”
“In the wake of housing’s long downturn, we started to observe signs of a trough forming a few months ago. The market has meandered along since then; improvements have been spotty, but there are accumulating signals that the worst is falling behind us. For example, the National Association of Homebuilders index of member sentiment climbed to a reading of 16 on May, the highest reading since last September and fully double its low value. That said, it remains in dismal territory, but is finally firming after a couple of years of more or less continual declines.”
Click here to continue reading “Mortgage Rates and the ‘Unofficial’ Start of Summer.” 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.”