May 24th, 2010

Mortgage Rates Back to Historic Lows



The big news this morning is that rates are back in historical territory. According to the latest issue of’s Market Trends Newsletter, “After setting 2010 lows [two weeks ago], mortgage rates managed another downshift [last] week and are once again near historic — approximately 50-year — lows”:

HSH’s market-spanning Fixed-Rate Mortgage Indicator (FRMI) slipped by another six basis points, finishing HSH’s weekly survey at 5.21%. The FRMI includes rates for conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation, and so covers a wider audience than other surveys. The average 5/1 Hybrid ARM — presently the most popular alternative to the traditional fixed-rate mortgage — came in at an average interest rate of 4.24%.

The weekly average [5/17/10 -- 5/21/10] for the benchmark 30-year Conforming mortgage landed at 4.93%, low enough to entice many homeowners to again consider refinancing.

Can we really expect mortgage rates to fall even further???

There seems little reason for mortgage rates to continue declining, based on economic fundamentals and risks, but then we’ve held that opinion for the past few weeks only to be confounded every time.

Back in the old, pre-financial market meltdown days, mortgages used to be among those products which benefited from these kinds of flight-to-quality moves. Today’s new securities, of course, have market and interest rate risks, but are built from mortgages comprised of much better borrower stock than those of a couple of years ago. This being the case, and with risks associated with investing in mortgages at the beginning of what should be a long decline, they may be becoming more attractive to investors seeking to park some cash. If so, that’s good news for housing market moving forward. We’ll see.

In equity markets, it has been said that “the trend is your friend” so we’ll stop fighting it; slightly lower rates on tap [this] week.

Click here to continue reading “Markets Greeced Again.”’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'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 and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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