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June 29th, 2009

“Slight Slip for Mortgage Rates”

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According to the latest issue of HSH’s Market Trends Newsletter, “Slight Slip for Mortgage Rates,” thanks to a late-week rally in Treasuries, mortgage rates dropped ever-so slightly. “The completion of a huge $104 billion debt offering by the Treasury went very well, allaying for now fears that the market won’t be able to absorb the voluminous new debt being issued.”

“Overall, fixed mortgage interest rates declined by a single basis point to 5.90% according to HSH’s Fixed-Rate Mortgage Indicator, which encompasses rates for true jumbo, conforming and “high-limit” conforming loans. HSH’s overall average for Hybrid 5/1 ARMs shed two basis points to finish at 5.31%, while conforming 30-year FRMs eased to 5.55% for the week.”

“We continue to see some signs that economic growth is bubbling beneath the surface and that the recession’s depth is lessening. As a reflection of that, the final report for the national Gross Domestic Product for the first quarter of the year was revised upward by two ticks to -5.5%, a bare improvement in a bleak quarter. Still, any upgrade is a welcome one, and with a better tenor to economic reports over the past month or two, the second quarter does seem to promise a move higher to a less negative reading.”

“After the successful auctions were completed this week, and with the Fed meeting out of the way, there was a considerable rally in Treasuries, with the ten-year Treasury yield sliding back to levels last seen in early June. As we’ve noted at other times, mortgage rates are much slower to decrease than to increase, but the eighteen-basis point drop in that yield should drag mortgage rates downward at least for the early part of next week. There’s a fair bit of data due out in a shortened week, but if recent spread patterns hold, we could see as much as a ten basis point drop in conforming rates, probably enough to start to get refinancers interested again.”

Click here to continue reading “Slight Slip for Mortgage 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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