Mortgage Rates Fell Last Week
by Tim Manni
“Mortgage Rate Retreat,” the latest issue of HSH.com’s Market Trends Newsletter, says the current mortgage rate pattern of “two steps forward, one step back” is typical in a recovery environment. “It is worth noting that as they occur, the general working range for interest rates does tend to tick slightly higher as time progresses.” Last week’s drop in mortgage rates was the first decline we’ve seen in four weeks:
HSH’s market-spanning Fixed-Rate Mortgage Indicator (FRMI) decreased by eleven basis points (0.11%) [last] week to an average 5.38%. The FRMI includes rates for conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation and so covers a wide swath of the market. The FRMI’s 5/1 Hybrid ARM companion lost eight basis points, finishing the survey week at 4.44%. The average rate for FHA-backed 30-year fixed rates rang in at 5.10%. The FHA program is estimated to be capturing as much as 35% of new originations, as it is the only market response available for less-than-stellar borrowers or those with small down payments.
So far, the economic recovery has been inconsistent. What does the economy’s “uneven” recovery mean for mortgage rates?
That uneven nature means that we should expect to see periods of rising rates followed by what are probably temporary declines. As we move further and further away from the worst of the economic crisis and grind toward whatever will again pass for normal, patterns of backing and filling are to be expected. Also to be expected is that each such set of moves will probably leave the next set of lows somewhat higher than the previous until we get back to ‘normal’… whenever that may be.
What’s in store for mortgage rates this week?
[This] week we’ll see what happened to new and existing home sales in March. Will there be sufficient evidence to determine whether the tax credit deserves to be extended again? Joining that question will be durable goods orders, the Producer Price Index, and a few other nuggets of data. Rates spent the better part of [last] week on a steady-to-downward bent, relative to the last couple of weeks, and we should start [this] week on a low note. Most likely, we’ll end up about flat at the end of the week.
Click here to continue reading “Mortgage Rate Retreat.” HSH.com’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.
