Mortgage Rates Fall to Spring-Like Levelsby Tim Manni
Despite a week filled with inconsistent economic data, mortgage rates managed to fall last week to spring-time levels. According to the latest issue of HSH’s Market Trends Newsletter, “Rates Leg Down a Little,” 30-year conforming rates dropped to their “their lowest average rate since the late March to late May period.”
“With September now behind us, stock markets started October in a fashion similar to other Octobers: they sold off to some degree. After a pretty good third quarter’s profits were booked, at least some of those gains from equity sales have been stashed back into Treasuries, driving yields down. This is turn is pressuring mortgage rates down to the lows of earlier this year.”
“Of course, that the available economic news wasn’t all that strong also helped investors see the value in low-yielding (but 100% guaranteed) securities, too.”
“The overall average for 30-year FRMs declined by almost a tenth-percent this week, and HSH’s FRMI closed Friday with five-day average of 5.40%. Five-one hybrid ARMs also eased back, shedding eight basis points to close the national survey at 4.74%. At 5.07%, conforming 30-year FRMs sported their lowest average rate since the late March to late May period gave us nine consecutive weeks just over (and under) the 5% mark.”
What’s in Store for Next Week?
“Does October continue to live up to its reputation as a wicked month for stocks? To the degree that it does, mortgage rates should benefit. Spring lows ignited a fair bit of refi activity, but building lasting refi waves requires low (if not continually declining) interest rates for a period of weeks, even months. We’ll continue to have low rates, but significant declines are unlikely. If you’re considering refinancing, don’t hesitate too long or a fickle October market may catch you napping.”
Click here to continue reading “Rates Leg Down a Little.” 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.