What’s to Stop Falling Mortgage Rates?by Tim Manni
For months now we’ve been saying that rates have to firm up sooner or later. But week after week the headlines of our weekly newsletters stay the same. Last week was no different.
Mortgage rates fell again last week, according to the latest issue of our Market Trends Newsletter, “Great Rates, but Summer Bummer.” The weekly average for the 30-year Conforming rate (week ending July 23) fell to 4.64%, down from 4.69% the week prior.
HSH’s overall mortgage-rate gauge, our Fixed-Rate Mortgage Indicator (FRMI) includes rates for conforming, jumbo, and the GSE’s “high-limit” conforming products and so includes a broad swath of the mortgage-borrowing public. The FRMI closed the week by falling eight basis points (.08%), landing at 4.90%. If a long-term fixed-rate mortgage isn’t the best option for you, perhaps you might consider a hybrid 5/1 ARM, which finished the week at 3.92%.
With very few signs of a strengthening economic recovery, we ask: what will stop rates from falling even lower?
The summer bummer of weak economic recovery should continue next week. Mortgage rates again stand at new lows, and what’s to stop the downward march? Will appetites for low-yielding mortgage paper continue to develop, even as new risks to home valuations may be forming and economic growth faltering? It’s hard to come up with any sound reasoning why it should, but with stock markets finding a little footing, we might just hold pretty steady next week.
Have you been able to take advantage of these historically-low rates? If you have (even if you haven’t for one reason or another), leave us a comment and let us know — we want to hear all about it.
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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.