Mortgage Rates Stop Falling, Hold Steadyby Tim Manni
“As expected, the recent slide in mortgage rates came to a soft halt [last] week,” according to the latest issue of HSH.com’s Market Trends Newsletter. As stated in the release immediately following their two-day meeting, the Federal Reserve maintained that their MBS purchase program would end as planned on March 31, 2010. Despite the fact that many (including us) foresee a legitimate rise in rates when that program ends, rates held steady for the most part:
[Last] week, the overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI rose by a single basis point (0.01%) to 5.42%. The FRMI includes conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation. It also has a Hybrid 5/1 ARM counterpart, which shed six basis points during the latest survey cycle, landing at 4.59% for the week. Conforming 30-year fixed mortgage rates eased by a couple of basis points while jumbos moved a like amount upward.
While mortgage rates didn’t appear to want to do anything much [last] week, there is a slew of first-week-of-the-month data on tap, including the all-important monthly employment report. If the economy is growing, and if hiring does begin to show, the Federal Reserve will start to become more likely to consider raising interest rates, with all the consequences that will entail. Given the deep hole we’re trying to climb out of, the Fed may hold their fire for some time even after that process gets underway, but the market will be certain to express their concerns long before that. It’s worth noting that at least one Fed Governor expressed a preference for higher rates at this week’s meeting, a signal that rates may be changing before too long.
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.
Our latest two-month forecast offers our predictions for the immediate future.
Click here to continue reading “Mortgage Rates Steady.” 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.