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December 14th, 2009

Mortgage Rates Firmed Last Week, More to Come?

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As we predicted, mortgage rates firmed up last week, marching upward from their record lows seen on December 1.

“As expected, mortgage rates edged higher [last] week. Some better economic news, some lingering glow from November’s employment report [on December 4], and light investor demand for new Treasury debt boosted rates a little. We may see some hangover from that [this] week, if the relationship between the 10-year Treasury yield and average mortgage rates holds true.”

“For [last] week, HSH.com’s FRMI, our overall average for mortgage rates (including conforming, jumbo and agency jumbo), increased by five basis points (0.05%), closing the survey period at 5.29%. Thirty-year fixed-rate Jumbo loans rose less than conforming did, a move of five basis points compared to the eight seen for agency-backed loans. Meanwhile, the overall average for 5/1 Hybrid ARMs also saw a five-basis point upward move, closing the survey week at 4.61%.”

“Numbers which suggest the economy is healing remain few and far between, but there is a growing number of sporadic signs that we’re heading in the right direction. For example, the months-long drawdown in inventories to get stockpiles in better balance with weak final consumer demand does seem to be coming to an end. That augurs well for new orders to help lift factory activity, and production should continue to find new footing.”

“With the holiday season fully underway, mortgage rates probably have little room to wander, even if the economic calendar [this] week is more full than [last] week’s. Inflation reports in the form of the Producer and Consumer Price Indices are due, we’ll get a look at the housing markets from the a builder and construction perspective, and a couple of indicators covering factory activity. The continued bump in underlying Treasury rates [last] week should add a couple of additional basis points to averages [this] week, and conforming 30-year FRMs may (again) tick to the other side of 5% as a result.”

Click here to continue reading “Rates Firm a Little, More Likely.” 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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