It’s hard for future predictions to improve the presentby Tim Manni
In the latest issue of our Market Trends Newsletter, HSH.com’s VP Keith Gumbinger provided a great analogy between the future of winter-weather conditions and the outlook for our nation’s economy. Even though the famous prognosticator Punxsutawney Phil predicted a shortened winter with milder conditions ahead, it still doesn’t change the fact that many parts of the country are presently waking up to below-freezing temperatures and mountains of snow on their sidewalks and lawns.
The same applies to the current and future state of the economy. Sure, economically speaking, things are predicted to get better as time goes on, but that still doesn’t change the fact that presently things are moving along (perhaps painfully) slowly:
Certain hopeful signs and promises are or have been emerging, but the best days lie ahead for at least the moment. Interest rates have been known to bounce in fits and starts in such a climate; the suggestion of tomorrow’s improvement is a component of the rally in stocks and the corresponding rise in mortgage rates over the past couple of months.
We observed another slight increase in rates last week:
HSH.com’s overall mortgage tracker — our weekly Fixed-Rate Mortgage Indicator (FRMI) — found that the overall average rate for 30-year fixed-rate mortgages increased by another five basis points, holding now at an average 5.17%. FHA-backed 30-year FRMs, a considerable and crucial part of the first-time homebuying market, moved up by two more basis points (.02%) to finish the week at 4.79%. Borrowers looking for an alternative to the benchmark 30-year FRM might consider a 5/1 Hybrid ARM, which is available at an relatively inexpensive 3.83% for the first five years, up three basis points from [the week ending 01/28/11].
Will mortgage rates rise or fall this week?
For the answer to that question and more, be sure to continue reading the latest edition of HSH.com’s Market Trends Newsletter.