According to the latest issue of HSH’s Market Trends Newsletter, “Markets Feeling Good, For Now,” the improving economy should bring higher rates along with it, but as of now, that hasn’t happened.
“While the sun’s not nearly out yet, the economic sky seems to continue to brighten. Usually, that would start to foster somewhat higher interest rates — but apparently, not yet.”
Different times of the year can establish different ranges for mortgage rates. Most recently, the low of 5.03% observed on May 26 and the peak of 5.81% on June 11 have have established the extremes of the range we expect Conforming rates to remain in for quite some time.
At the close of business yesterday the 30-year Conforming rate finished at 5.49%, according to HSH.com. Last week the same rate finished at 5.51%. A tiny move of only two basis points isn’t uncommon during the summer when markets tend to get quiet.
According to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates Ease Somewhat,” as we expected, mortgage rates eased back from their three-week run upwards. “A tempering of enthusiasm about how quickly the economy will resume a pattern of growth and no new auctions of Treasury Bonds contributed to the decline.”
“Overall, fixed mortgage interest rates declined by 13 basis points, according to HSH’s Fixed-Rate Mortgage Indicator, which includes rates for conforming, jumbo and expanded conforming loans. At 5.91%, rates remain quite favorable for potential homebuyers but probably not low enough to see refinancers lining up at lender offices. The overall average for 5/1 hybrid ARMs moved down by 11 basis points, landing at 5.33%. Conforming 30-year FRMs, perhaps the most important product in the market, slipped back by seventeen basis points for the week, while true 30-year FRM jumbos managed a decline of nine.”
According to the latest issue of HSH’s Market Trends Newsletter, “Interest Rates: Storm Over?,” the 10-year Treasury’s downshift on Friday served to, in the least, delay the rising trend in interest rates.
“After rising for several weeks, the storm for mortgage rates may be abating. With an intra-day runup which saw its yield above 4% for a time, the mortgage-influential 10-year Treasury downshifted to 3.79% by late Friday, shedding more than 20 basis points (0.20%) off the week’s peak. That may not presage a huge fall in mortgage interest rates, but should be sufficient to stop and at least partially reverse the upward trend.”
Just as we predicted in our last Market Trends Newsletter, improving economic conditions brought upward pressure to mortgage rates last week. According to the latest issue of HSH’s Market Trends Newsletter, “Firmer Economy, Firmer Rates,” even though would-be refinancers haven’t welcomed the higher rates, the upward pressure may actually help the economy.
“Investor money formerly stuffed into the safe haven of Treasury bonds is beginning to filter out into other areas of the economy, and the sooner that normalization takes place, the quicker the economy will experience actual recovery.”
According to the latest issue of HSH’s Market Trends Newsletter, “Surprise Mortgage Rate Rise…Relax,” don’t be surprised if improving economic conditions bring an upward influence to mortgage rates.
“Bond and mortgage markets spasmed this week, and the corresponding sharp rise in rates over a two-day period served as a reminder that even a battered private market markets can be a dangerous animal. It wasn’t completely clear what sparked the rout, but there was speculation that a combination of unclear goals in Federal Reserve quantitative easing programs, floods of new sovereign debt and shoddy treatment of GM bondholders all led to the selloff.”
According to the latest issue of HSH’s Market Trends Newsletter, “The Fed, and Record Rates (again),” the conclusion of the Fed’s two-day FOMC meeting sent conforming mortgage rates down once again to historically-low levels.
“Without usual policy tools at its disposal, the Fed again weighed heavily into mortgage and bond markets. At the close of its meeting Wednesday, The Fed announced an extension of its plan to buy up Fannie and Freddie-issued debt and mortgage-backed securities offered by the GSEs as well as Ginnie Mae (FHA-backed product) and detailed a long-rumored plan to start purchasing certain Treasury securities.”
According to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates Pretty Stable. Economy, Not so Much,” after another week of dismal economic reports, the clocks may be the only thing moving forward.
“We’ll get longer days starting on Sunday, but the days feel quite long enough already, what with the difficult economic environment. Perhaps a sun still shining for the evening commute will lend some cheer, as may the warmer days which will follow. At a time when things are pretty difficult, it’s at least something to look forward to.”
According to the latest issue of HSH’s Market Trends Newsletter, “Mortgage Rates, Like Economy, Flat,” the bad economic news that “used to bring the silver lining of lower mortgage rates,” hasn’t helped as it has in the past.
“Mortgage rates were pretty flat. HSH’s overall average for the cost of mortgage money — our Fixed-Rate Mortgage Indicator (includes conforming, jumbo and ‘expanded conforming’ interest rates) — rose again this week by three basis points to land at 5.82%. The FRMI’s 5/1 Hybrid companion slipped back by four basis points, closing the survey week at 5.51%. Although jumbo 30-year FRMs slipped back a little to 6.73%, conforming FRMs rose by seven basis points.”
Despite the anticipation that surrounded the government’s unveiling of their latest housing-rescue initiative, mortgage rates were only marginally inspired. According to the latest issue of HSH’s Market Trends Newsletter, Steady Rates Amid Big Government Plans, “The government’s plans to spend hundreds of billions of dollars to goose the economy, plus hundreds of billions more for housing and mortgage markets, failed to produce much enthusiasm.”
“Mortgage rates held firm throughout considerable market turbulence. The holiday-shortened week saw HSH’s overall average for the cost of mortgage money — our Fixed-Rate Mortgage Indicator (includes conforming, jumbo and ‘expanded conforming’ interest rates) — rise by three basis points to land at 5.79%. The FRMI’s 5/1 Hybrid counterpart rose by a lone basis point to 5.55%. Conforming FRM rates eased to an average 5.22%, while 30-year FRM jumbos rose by eight basis points.”
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.
