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February 11th, 2013

Rising mortgage rates run out of steam

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Below is an excerpt from of our latest Market Trends newsletter, a weekly examination of the economic conditions that influenced mortgage rates. Sign up to receive the Market Trends in your email Friday evening.

After several weeks of being boosted by good news, the rise in mortgage rates seems to have run out of steam. Without a continuing stream of improving economic data, there just isn’t enough momentum to create a sustained rise in rates.

Rising rates: No damage done

The rally in stock markets which has attracted investor cash seems to have come to a halt, too, and it wouldn’t surprise us at all if we saw some reversal of money from stocks and back into bonds, as investors look for a place to park cash while awaiting the next updraft in the stock market.

2.11.13

Since it has only totaled about a quarter-percentage point, the mild rise in rates doesn’t have appear to done any damage to refinancing or home-purchase activity, and borrowers continue to respond to the favorable interest rate environment.

Mortgage rates hardly moved last week

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 (conforming, non-conforming and jumbo) climbed by just a single basis point (0.01 percent) to 3.84 percent, for the week ending Feb. 8.

The overall average rate for 15-year fixed-rate mortgages (conforming, non-conforming and jumbo) held steady at 3.10 percent for the week.

FHA-backed 30-year fixed-rate mortgages managed a decline of one hundredth of a percentage point (0.01 percent), moving back down to 3.41 percent, as inexpensive mortgage money remains readily available to credit- or equity-impaired borrowers. The overall average rate for 5/1 Hybrid ARMs failed to move in either direction, choosing instead to remain at an average rate of 2.76 percent for the period.

Not much movement ahead

There wasn’t much by way of fresh economic news to push the market around last week, and what was available featured few surprises.

This week again features a light calendar of economic data, leaving investors to again ponder the direction of the economy and how best to employ their money throughout it. If last week’s experience is any guide, we probably don’t see a whole lot of movement for mortgage rates one way or the other, but could probably find a decline of a couple of basis points by the time the week comes to a close.

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About the HSH Blog

HSH.com'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 HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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