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July 2nd, 2009

2009 Mortgage Rates: Seasonal Adjustments Need Not Apply

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Different times of the year can establish different ranges for mortgage rates. Most recently, the low of 5.03% observed on May 26 and the peak of 5.81% on June 11 have have established the extremes of the range we expect Conforming rates to remain in for quite some time.

At the close of business yesterday the 30-year Conforming rate finished at 5.49%, according to HSH.com. Last week the same rate finished at 5.51%. A tiny move of only two basis points isn’t uncommon during the summer when markets tend to get quiet.

The summer months are a season where mortgage rates tend to remain relatively flat. “Simply put, it’s vacation season,” said HSH VP Keith Gumbinger.  We expect that minimal weekly fluctuation to continue, although it may not always be so small, through the coming months.

Since 2009 has been a year of extraordinary economic circumstance, the normal seasonal occurrences which usually tend to influence mortgage rates haven’t necessarily applied. The Fed has been a steady buyer, and should continue to be through year’s end, of mortgage-backed securities. As long as the economy remains weak, and the Fed’s assertion that “inflation will remain subdued for some time,” rates really won’t have much place to go.

Unless we see a stark change in circumstance — such as strong economic growth or rising inflation — our summer range of between 5.03% and 5.81% should hold strong no matter the season.

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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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