Mortgage Rates Hit Lowest Point Since Dec. ‘09
by Tim Manni
-Last week mortgage rates fell to their lowest level in 2010!-
For another week, mortgage shoppers benefited from the turmoil in Greece as investors shifted cash to safer, federally-backed investments. The “flight to quality” caused the yield on the 10-year Treasury to fall to its lowest level in months, pulling mortgage rates down as well.
Last week, the 30-year Conforming rate fell to a level unseen since last year (emphasis added):
HSH’s market-spanning Fixed-Rate Mortgage Indicator (FRMI) declined by five basis points to close the weekly survey at 5.27%. 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 4.30%, down eight basis points from [the previous] week’s 4.38%.
The weekly average for the benchmark 30-year Conforming mortgage landed at 5.03%, its lowest weekly figure since December 11, 2009.
When can we expect rates to begin increasing?
Given the world’s troubles and the “money response” to them, it’s not clear when any sizable increase in mortgage rates — the steady climbing kind of trend one would expect to accompany firming economic growth — might occur. That said, the abrupt focus on these problems and the urgent responses which have followed makes them somewhat less likely to intensify in the days and weeks ahead. Should some tenuous stability start to emerge, it seems likely that at least some of the money driving interest rates down will start to reverse course, a situation which usually occurs with stealthy speed. Once this occurs, and the focus returns to economic fundamentals, it’s a fair bet that mortgage (and other) interest rates will begin a march upward.
Probably not [this] week, though. Mortgage shoppers continue to be presented with excellent opportunities to grab near-50-year-low mortgage rates, and that should be the case at least for the early part of [this] week. New data on inflation, a review of the minutes of the last Federal Reserve meeting, LEI and some regional manufacturing reports are all on tap. Of late, Greece and others aside, good news seems to be followed by other good news, so let’s expect that to be the case… and mortgage rates which seem unequally likely to rise or fall by much.
Click here to continue reading “2010 Lows for Mortgage Rates.” 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.
