December 5th, 2011’s Market Trends newsletter: Mortgage rates should be higher



int rate QMarkThe world remains awash in troubles, including slowing growth and recession likely forming in Europe, less-stellar growth in China and a still-weak recovery here at home.

That being the case, and with fiscal policy flailing about both here and abroad, central banks announced both individual and coordinated actions to help address some of these issues, and stock investors cheered loudly at the efforts. A considerable rise in stocks last week came partly at the expense of bonds, and while underlying interest rates rose somewhat as a result, most mortgage rates didn’t follow them.

Sign up for’s Market Trends newsletter

Equity markets were also cheered by reports of very solid sales on Black Friday and Cyber Monday to kick off the holiday retail season. We’ll need to see if these extreme bargain hunters continue to come out for the rest of the annual buying binge before it’s all said and done, but a good start is an encouraging sign that consumers are will to spend more than they have in the past.

Mortgage rates steady despite economic concerns

According to the latest figures from, the overall average rate for 30-year fixed-rate mortgages (conforming, nonconforming and jumbo) was unchanged from the previous week, holding fast at an average 4.35 percent. The overall average rate for 15-year fixed-rate mortgages (conforming, nonconforming and jumbo) closed last week with a single-basis-point increase to 3.67 percent.

Important to homebuyers and low-equity-stake refinancers, 30-year FHA-backed mortgages climbed off last week’s record low by three basis points (0.03 percent) to moved to 3.95 percent, while the overall average for 5/1 Hybrid ARMs trickled higher by just one hundredth of one percent to 3.12 percent.

Central banks doing their part to keep credit flowing

For their part, the Federal Reserve, European Central Bank, Bank of Canada, Bank of England, Bank of Japan, and the Swiss National Bank all pledged to make U.S. dollars available more cheaply to one another in order to make certain that currency liquidity issues don’t further disrupt global markets.

This means that credit can keep flowing more easily despite tightening lending conditions in Europe, and that may help keep individual economies functioning as they address their debt difficulties. That credit will keep flowing means companies can continue to borrow and invest, and that improvement in potential business conditions improved the moods of equity investors measurably. While this does not directly address the Eurozone’s troubles, it does address the results of those troubles to at least some degree.

On the domestic front, the Federal Reserve’s latest review of regional economic conditions—called the “beige book” for the color of its cover—found slow to modest growth in all 12 Federal Reserve districts. Actually, the latest report sounded very much like the one released in October, and both were of a generally stronger tone than was September’s, when “mixed or weakening activity” was seen in some districts.

Things looking up–mortgage rates should be higher

The country’s improving economic tone is of course reflected in more than just one economic report. It lends some hope that some economic momentum may be finally starting to build. By no means are we out of the woods yet or have no risks which might again derail us from an upward path, but the grind forward seems to be moving a little quicker of late.

With the economic sky brightening somewhat, mortgage rates would normally have some reason to press higher. However, Eurozone clouds lurk on the horizon yet, and whether the ensuing storm will be a drizzle or a downpour remains yet to be seen, as does the duration of the event. 

Mortgage rates seem likely to settle this week, erasing last week’s slight bump upward.

Share and Enjoy:
  • email
  • Print
  • RSS
  • Add to favorites
  • Yahoo! Bookmarks
  • Facebook
  • Twitter
  • Technorati
  • Digg
  • Google Bookmarks
  • StumbleUpon
  • Yahoo! Buzz
  • Mixx
  • BlinkList
  • Live
  • Reddit

One Response to “’s Market Trends newsletter: Mortgage rates should be higher”

  1. Carson Says: December 5th, 2011 at 8:38 pm

    With the European economy coming on particularly bad times, it will be interesting to see what measures the banks will take.

Leave a Comment

Receive Updates via Email

Delivered by FeedBurner

About the HSH Blog's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

Connect With Us

  • rss feed icon
  • facebook icon
  • twitter icon

Compare Lowest Mortgage Rates