Last Week’s Decline in Mortgage Rates May Continue this Weekby Tim Manni
Poor economic news last week brought on good news for would-be homebuyers and refinancers. According to HSH.com’s most-recent Market Trends Newsletter, last week’s downward trend in rates could carry over into this week (emphasis added):
While the inventory-led “technical” economic recovery pushed the latest revision of the nation’s Gross Domestic Product to a robust 5.9% increase in the fourth quarter of 2009, more than a few signs [last] week pointed to a much more muted pace of growth.
Although it would be hard to find any group who might cheer on stumbling economic growth, would-be homebuyers and refinancers do benefit to some degree as a weak trajectory means continued low — and possibly falling — interest rates in the days ahead.
[Last] week, the overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI shed a lone basis point (.01%), ending HSH.com’s survey week at 5.40%. The FRMI includes conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation. The FRMI’s Hybrid 5/1 ARM counterpart remained unchanged during the latest survey cycle, closing the survey week at 4.58%.
It’s hard to believe that March is fast upon us. The new month will bring a cascade of first-week-of-the-month data [this] week, including the latest ISM surveys, Construction Spending, the Beige Book, Productivity, Consumer Credit and the all-important Employment Report for February. Given current trends, it seems likely that manufacturing-related stuff should be stronger, consumer and labor weaker (steady at best) and that mortgage rates will follow the decline in yields this week. Figure a handful of basis point decline for the average 30-year fixed-rate by week’s end.
Click here to continue reading “Bad Economy Good News for Mortgage Rates.” 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.