Update1: New Guest Post on ‘Five Cent Nickel’

Update1: The Wall Street Journal thought our guest post on FiveCentNickel.com was worth the read — be sure to check it out if you haven’t already.

Original post (published on 2/3/10): I was given the opportunity to write a guest post for the popular personal finance blog FiveCentNickel.com. I decided to write about what HSH.com knows best: mortgage rates.

In the wake of one of the worst housing downturns in decades, conforming mortgage rates emerged at unprecedentedly-low levels thanks to a federal program that purchased mortgage-backed securities. With that very program set to expire in less than two months, many analysts expect a considerable increase in mortgage rates.

How much will rates rise and when? Here’s a portion of our guest post on FiveCentNickel, titled “2010 Outlook for Mortgage Rates,” that can help provide some answers:

During 2010, the mortgage market will transition from almost-fully-government-supported to one once again driven by the private market to a much greater degree. As markets return to “normal,” so too will mortgage rates, which, for the early portion of 2010, should still remain among the best seen during the past 50 years. However, barring a double dip to the recession, borrowers should have no expectations that rates will remain at multi-generation lows throughout the year.

Broadly, we expect 30-year fixed-rate mortgages to hang around the 5% mark during the first quarter of 2010, as support programs (MBS purchases and the homebuyer tax credit) remain fully in force. After that we’ll start the transitional period described above. While some analysts expect an immediate increase of up to a full percentage point in rates when the Fed decides to stop buying agency MBS, we’re not among them.

Click here to find out why.

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