Mortgage rates decline after Hurricane Sandyby Tim Manni
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Hurricane Sandy invaded the eastern seaboard last week, causing unprecedented damage in New Jersey, New York and states up and down the coast. Millions remain without power or basic services, and finding fuel and staying warm even a week later remains a challenge for many. Simply getting to and from anywhere without delay or detour is nearly impossible. Financial markets closed early in advance of the storm and for a time afterward and things remain far from normal in New York City, the financial capital of the United States.
Couple this event with a presidential election just a day away, and it’s fair to say that a small move in mortgage rates probably isn’t at the top of anyone’s mind.
Mortgage rates decline
HSH.com’s broad-market mortgage tracker–our weekly Fixed-Rate Mortgage Indicator (FRMI)–revealed that the overall average rate for 30-year fixed-rate mortgages (conforming, non-conforming and jumbos) declined by five basis points (0.05 percent) to 3.71 percent, erasing the previous week’s rise.
Meanwhile, the FRMI’s 15-year companion moved lower by four basis points (.04 percent) to again arrive at 3.02 percent.
FHA-backed 30-year FRMs rose by two hundredths of a percentage point, as the most viable option for credit- or equity-impaired borrowers saw its average lifted to 3.35 percent.
Finally, the overall average rate for 5/1 Hybrid ARMs eased by four basis points, slipping to 2.72 percent, a value seen three times in the past four weeks.
Jobs provide ‘upward surprise’
Perhaps the most important report out last week was the employment report for October.
Forecasters called for perhaps 125,000 new hires to have occurred during the month, but an upward surprise was seen as 171,000 new jobs were filled during the month. There were also upward revisions to August and September to the tune of 84,000 additional jobs, so the news was fair all around.
While the gains in jobs were of course welcome–and sizable, relative to figures from earlier this year–they are still modest gains at best, barely sufficient to keep pace with the regular expansion of the working-age population. The nation’s official rate of unemployment rose by a single tick to 7.9 percent as the size of the nation’s workforce expanded by two tenths of a percentage point.
Elections influences on rates is unknown
With a tight election coming on Tuesday, it’s hard to know what will happen to mortgage rates and markets in coming days. Most probably, mortgage rates will continue to hang around these levels, kept there by the Fed’s steadying hand.
Don’t forget to get out and vote on Tuesday, even if you feel you’re stuck choosing the best of a bad lot. We should never take for granted the hard-earned right to exercise our choices and should take every opportunity to do so.