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January 25th, 2010

Conforming 30-Year FRMs Fall Closer to 5%

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The turbulent market works to the advantage of mortgage shoppers once again. According to “Amid Many Market Concerns, Mortgage Rates Still Easing,” the latest issue of HSH’s Market Trends Newsletter, conforming 30-year fixed rate mortgages have fallen to their lowest levels in about a month:

To the benefit of Treasuries and mortgages, stock markets continued to crater amid less-than-stellar earnings reports, with the downturn exacerbated by new rounds of populist bank-bashing, this time via a unique taxation proposal from the Obama Administration.

[Last] week, the overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI slid back by five basis points (0.05%) as our indicator of the costs of conforming, jumbo and expanded conforming mortgage loans closed the week at 5.41%. A Hybrid 5/1 ARM counterpart to the FRMI eased by three basis points, finishing the week at an average 4.65% Conforming 30-year FRMs nudged closer to 5% to their lowest average in about a month, so that should cause some pick up in refinance activity when applications are tallied by the Mortgage Bankers Association [this] week.

What’s in store for this week?

Mortgage rates continued their downward slant [last] week, but it appears that the bulk of the decline is done, at least for the moment. We could see a downward move for rates of another couple of basis points [this] week — late week Treasury values suggest as much — but with all of the above to consider (and more), and it being unlikely that the stock market will have an equally lousy week, we think that rates might hold steady or even tick up a couple of basis points instead.

It’s never too late to look ahead. If you’ve got a couple of minutes, you should check out our 2010 Outlook for Mortgage Markets and Rates. It covers what we think are the ten most important considerations for the market next year.

Click here to continue reading “Amid Many Market Concerns, Mortgage Rates Still Easing.” 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.

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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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