Mortgage rates remain at historical lows as HARP 2.0 kicks offby Tim Manni
Fannie Mae and Freddie Mac released their details of the expanded HARP program to lenders yesterday (lenders can begin accepting applications Dec. 1). While the language in the GSE’s releases was rather technical, meant for lenders as opposed to borrowers, we deciphered the biggest changes and explained what they will mean to homeowners in a blog post titled, “Fannie, Freddie release HARP 2.0 details.”
“Details of the expanded refinance program are just coming out, but the enhancements seem very likely to bring both lenders and borrowers to the table,” said Keith Gumbinger, vice president of HSH.com. “Among the changes are lower costs for borrowers, easier income qualifications and greater liability protection for lenders,” Gumbinger added.
Low mortgage rates are also a key ingredient to making HARP 2.0 a success. And according to the latest weekly mortgage rate report from HSH.com, rates remained near record lows for the wraparound week ending Nov. 15.
Rates on the most popular types of mortgages were fairly flat from the previous week, according to HSH.com’s Weekly Mortgage Rate Radar. The average rate for conforming 30-year fixed-rate mortgages rose by a single basis point (0.01 percent) to 4.14 percent. In contrast, conforming 5/1 hybrid ARM rates fell by 4 basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at average of 2.98 percent.
Fed is helping to keep rates stable
The Fed is certainly one reason why mortgage rates have consistently remained near record lows–a trend of continued importance as HARP 2.0 will begin at the start of next month.
Economic ramifications from the external events–like those happening in Greece and Italy–are one of the reasons the Federal Reserve embarked on Operation Twist better than a month ago. Coupled with a new MBS money-recycling program, the effect so far seems to be keeping interest rates fairly stable amid what might have been wider swings.
In the face of gently improving economic data in the U.S., mortgage rates have settled back after a minor upward run, and continue to provide important supports to beleaguered homeowners and homebuyers alike.
Low mortgage rates expected to continue
Looking forward, there’s little reason to expect any big change in mortgage rates. There’s no reason to expect that any of the economic reports out this week will change the interest rate picture to any great degree. A wobble of a couple of basis points in either direction this week is equally likely, but no matter, since mortgage rates will hang around these levels and just above record lows, regardless.
In HSH.com’s latest two-month forecast for mortgage rates (published Oct. 7), we anticipated that 30-year conforming fixed-rate mortgages would wander between 3.90 percent and 4.25 percent. Mortgage rates have maintained that range, and given that the next two-month forecast is due out by mid-December, we should remain in that window through the end of the year.
Have a HARP 2.0 question? Leave me a comment below and I’ll do my best to answer your question.