Mortgage Rates Moved Higher During Holiday Weekby Tim Manni
Mortgage rates rose again during the holiday-shortened week, according to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates Move Higher.”
Although last week’s move upward marked the third consecutive weekly increase, “It’s important not to make too much of the flare in rates“:
Holidays are now in full swing, markets are thinly populated and traded, and exaggerations in market moves are common. Some of the rise in yields [last] week appeared to be money shuffling from bonds and into equities to take advantage of any “Santa Claus” rally in stocks. Since there has been a four-day “winning streak” it would seem that this is the case at the moment.
It’s also important to remember that the ranks of potential homebuyers and refinancers are generally reduced by the demands of the holiday season, so relatively few borrowers are affected by the minor rise in rates.
That said, the overall average for 30-year fixed-rate mortgages related by HSH.com’s FRMI saw this indicator of conforming, jumbo and expanded conforming loans rise to 5.48%. A 5/1 Hybrid ARM counterpart to the FRMI bounced up by six basis points, landing at 4.71%. Borrowers searching for under-5% conforming 30-year FRMs in their stockings will be disappointed this Christmas (unless they are willing to pay about a 1% fee to get it).
We suggest that you forget about rate movements and enjoy the holiday. Some of the rise over the past couple of weeks is likely to be washed away when more pronounced activity returns to the markets in a couple week’s time. Until then, we could see slightly higher or lower rates [this] week, all still well within the context of recent ranges.
We’d like to wish all our clients, visitors and friends a very Merry Christmas. HSH is closed for business on December 24 and 25.
In case you missed last week’s Market Trends: With so many issues facing housing and mortgage markets in 2010, we’re working on a 2010 Outlook, and expect it will be ready sometime [this] week. We’ll let you know when it comes, but until then, HSH’s new two-month forecast is out.
Click here to continue reading “Mortgage Rates Move Higher.” HSH’s free Market Trends Newsletter, an in-depth analysis of various financial markets from the week prior, is published every Monday. Email subscribers receive it in their inbox 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.