Mortgage rates continue to lift off record lowsby Tim Manni
Below is an excerpt from our latest Market Trends newsletter, an examination of the factors which caused mortgage rates to move in one direction or another the week before. The Market Trends is written each week by Keith Gumbinger, vice president of HSH.com:
Last week, the Consumer Finance Protection Bureau finally released long-awaited standards to define a “Qualified Mortgage.” For the most part, the regulation seemed merely a codification of present industry practices and so didn’t contain too many surprises.
Meanwhile, mortgage rates lifted a little bit last week, but that bump seems to have largely come from early in the week, with rates settling back somewhat by Friday.
Mortgage rates continue to climb
HSH.com’s broad-market mortgage tracker–our weekly Fixed-Rate Mortgage Indicator–found that the overall average rate for 30-year fixed-rate mortgages rose by five basis points (0.05 percent) to 3.73 percent, a cumulative rise over the past few weeks of 15 basis points from a record low.
The overall average rate for 15-year fixed-rate mortgages increased by just two basis points, lifting the popular refinance product to an average rate of 2.99 percent for the week.
FHA-backed 30-year fixed-rate mortgages eased by one hundredth of a percentage point (.01 percent), settling back to 3.31 percent, as inexpensive mortgage money remains available to credit- or equity-impaired borrowers. Also, the overall average rate for 5/1 Hybrid ARMs rose by a single basis point, ticking up to 3.71 percent.
Fantastic interest rates continue
The mortgage market continues to slowly grind forward to whatever will eventually constitute normal. Settlements for the “abuses” of the past continue to occur, agreements and deals on soured loans are happening, and new regulations are starting to shape tomorrow’s mortgage market.
Although there remain many, many items yet to be resolved, adjusted or otherwise corrected, it would appear that after several years, the journey seems to finally have begun, and we continue to take steps forward.
For the moment, we continue to have fantastic interest rates provided by the Fed plus fairly liquid and functioning mortgage markets thanks to Fannie, Freddie and FHA. We should enjoy them while they’re here, and take advantage of the “good old days” while they last.
For this week…
This week features no new regulations, but we will see a larger set of fresh economic data. Retail sales, producer and consumer price indexes and looks at housing and consumer sentiment are all due. We should have a new Two-month forecast for mortgage rates ready to go by then, too, but for this week, we think mortgage rates are likely to take back a couple of basis points of last week’s rise.