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October 12th, 2009

Jumbo Fixed Rate: Lowest in Four Years

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According to the latest issue of HSH’s Market Trend’s Newsletter, “Conforming Rates Down; Jumbos Crack 6% Mark,” the average rate for a 30-year jumbo fixed-rate mortgage dropped to 5.96% — the first time the rate has fallen below 6% since September 9, 2005. Not to be outdone, on Wednesday the average conforming 30-year fixed-rate mortgage with no points came in at an average 5.09%, among the lowest average rates seen in 2009.

HSH30CFRMWeekly

“Continuing an easing pattern that’s been ongoing since about mid-August, mortgage rates trended down a little bit more this week. Accompanied by rising stock and gold prices, it would seem that investor money which has been “on the sidelines” is starting to make its way into the market. The Dow Jones Industrial Average is again within shouting range of 10,000 mark and has risen a full 50% from the year’s low, while bond yields continue to be fairly subdued.”

“HSH’s measure of the overall average for 30-year fixed-rate mortgages — including conforming, jumbo and agency jumbo pricing — shed six basis points (.06%), pushing our Fixed-Rate Mortgage Indicator FRMI down to 5.34%.”

“The FRMI’s 5/1 Hybrid ARM counterpart declined by seven basis points, closing the survey week at an average 4.67%.”

“Conforming 30-year FRMs have again descended to levels seen earlier this year, when they spent a nine-week period jumping back and forth over the 5% mark. Those rates have been artificially manipulated to low levels by the influence of the Federal Reserve and other government agencies.”

“However, things are starting to improve somewhat in what remains of the private non-conforming mortgage market. This week’s 5.96% average for a 30-year jumbo FRM was its first foray below 6% since September 9, 2005. It’s worth noting that jumbos have sported a lower average rate in just 49 of the 509 weeks which have elapsed since Y2K — and that the “bottom of the bottom” noted during that period was only about 40 basis points (.40%) below this week’s figure.”

Click here to continue reading “Conforming Rates Down; Jumbos Crack 6% Mark.” 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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