Will mortgage rates continue to rise this week?by Tim Manni
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 rose by six basis points (.06%) to finish the week at 5.17%. A key component of the first-time homebuyer market, FHA-backed 30-year fixed-rate mortgages increased by five basis points to land at 4.81%. ARMs are starting regain at least some favor in the market, and Hybrid 5/1 ARMs, perhaps the most preferred alternative to the traditional 30-year FRM (notably for jumbo buyers) increased a full tenth-percentage point (.10%), beginning April at an average of 3.84%.
March’s job numbers, both the added payrolls and the unemployment rate, posted their best figures since the onset of the recovery. While last month’s employment numbers were a welcomed sign, the figures aren’t robust by any means. Couple that with a housing market that has shown little if anything to be optimistic about and it becomes obvious that our economy still has a ways to go, meaning less upward pressure on rates.
The upside in all of this is potential homebuyers and refinancers still have low mortgage rates to be thankful for. Whether access to those rates is attainable or not is a whole other story. All that said, the overall mindset is that the glass is beginning to look half full, explains HSH.com VP Keith Gumbinger in our latest Market Trends Newsletter:
Mortgage rates are pushed higher by improving growth and especially improving inflation. A still-soft job market and weak housing markets act as a counterbalance to that upward pressure, while the events overseas do add degree of uncertainty to the outlook. As the glass begins to seem more likely to be half full than empty, the likelihood is that interest rates will tend to be somewhat higher on balance than lower. A stock market finding its footing is one expression of that as money moved more confidently into risk and away from safety.
What’s in store for mortgage rates this week — are we expecting them to rise even more? How about beyond just this week? If you’re looking for a mortgage-rate forecast that looks some nine weeks into the future, be sure to check out our “Two Month Forecast for Mortgage Rates.”