June 15th, 2009

Interest Rates: Storm Over?



According to the latest issue of HSH’s Market Trends Newsletter, “Interest Rates: Storm Over?,” the 10-year Treasury’s downshift on Friday served to, in the least, delay the rising trend in interest rates.

“After rising for several weeks, the storm for mortgage rates may be abating. With an intra-day runup which saw its yield above 4% for a time, the mortgage-influential 10-year Treasury downshifted to 3.79% by late Friday, shedding more than 20 basis points (0.20%) off the week’s peak. That may not presage a huge fall in mortgage interest rates, but should be sufficient to stop and at least partially reverse the upward trend.”

“The strong flare in rates — attributed to a number of concerns, from inflation potential, undisciplined fiscal policy, and a moderating recession — serve as a reminder that even in this great period of government intrusion, private markets still retain considerable power.”

“For this week, HSH’s overall measure of the cost of mortgage credit — our Fixed-Rate Mortgage Indicator (FRMI), inclusive of conforming, jumbo and “high-limit” conforming data — moved 22 basis point higher to land at 6.04%, the highest such reading since November 28, 2008, the week when the Federal Reserve first began its programs to manipulate mortgage rates. For 5/1 Hybrid ARMs, the overall average moved 20 basis point upward, finishing the survey week at 5.44%.”

“Conforming and FHA-backed loans make up the majority of the marketplace. For those, the increase this week was 29 and 36 basis points respectively, with a zero-point 30-year Conforming loan averaging 5.80%.”

Click here to continue reading “Interest Rates: Storm Over?” 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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