According to the latest issue of HSH’s Market Trends Newsletter, “Home Loan Rates Slip Back; Lower To Come?,” mortgage rates fell last week to levels unseen since late spring, and have the potential to fall even lower.

“The overall average rate for 30-year fixed-rate mortgages revealed in HSH’s Fixed-Rate Mortgage Indicator (FRMI) nudged downward, slipping seven basis points (.07%) to close the first week of September at 5.56%. The overall average for 5/1 Hybrid ARMs lost five basis points to landing at 4.87%. Conforming 30-year FRMs finished the period at 5.25%, a level last seen in late May.”

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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.”

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Mortgage rates fell last week to levels unseen in months, but, according to the latest issue of HSH’s Market Trends Newsletter, “Easing Rates as Summer Wanes,” borrowers shouldn’t expect rates to fall all the way back to their spring lows.

“Mortgage rates slipped back a little bit this week, moving somewhat closer to the bottom of the range which has held since late May and early June.”

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Improving economic data sent mortgage rates rising toward week’s end. Interestingly, the latest issue of HSH’s Market Trends Newsletter, “Better Data Equals Higher Rates — Maybe,” questions whether our improving economy will continue to put upward pressure on rates.

“One thought did occur to us this week beyond the conventional wisdom. It’s a given that an improving economy will of course drive interest rates higher, as demand for credit and prospects for inflation increase. Usually, this has a corresponding effect on mortgage rates (particularly fixed-rate mortgage rates). With so many of the troubles in housing and mortgage financing so evident over the past couple of years, and the risks of making loans so clear and persistent, we’re left to wonder:”

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According to the latest issue of HSH’s Market Trends Newsletter, “Firmer Rates, Barely,” mortgage rates are hovering in the middle of the range they have been in for some time now. Since economic conditions are neither completely bleak or steadily improving, rates are “waiting to see where [they] go from here.”

“Subtle signs of economic improvement are gaining in number and frequency, but it’s all too easy to confuse a move back toward flatline growth as actual recovery, or to conclude that a rising trend is wholly sustainable. While we’re encouraged by the momentum away from emergency panic levels, risks to any nascent economic recovery remain, and real improvement is still in our future.”

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According to the latest issue of HSH’s Market Trends Newsletter, “Rate Fall, then Firm,” the Fed’s sponge-like actions, absorbing the excess supply of mortgage-backed securities and Treasuries when and if it forms, has served to keep interest rates low.

“The Fed is providing support to various financial markets, including the mortgage market, with purchases of MBS and Treasury debt alike. Earlier this year, there were rumors pervading the markets that the Fed would engineer 4.5% 30-year fixed-rate mortgages; we never put any stock in them. With the release of the minutes, they revealed for the first time that there is no specific target for rates in mind, but rather the Fed seems to be acting as a sponge to absorb excess supply in those markets when and if it forms, serving to keep interest rates low. The minutes noted that ‘The asset purchase programs were intended to support economic activity by improving market functioning and reducing interest rates on mortgage loans and other long-term credit to households and businesses relative to what they otherwise would have been. But the Committee had not set specific objectives for longer-term interest rates…’. At the same time, they also revealed a steadfast hold to the objective of the established program of measured buying of these assets, and that there would be no knee-jerk adjustments to try to address short-term fluctuations in market interest rates.”

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According to the latest issue of HSH’s Market Trends Newsletter, last week’s average for Conforming 30-year fixed-rate mortgages was 5.35%, the lowest such figure since May 29.

“In an early summer swoon, mortgage rates continued to press downward, following waning enthusiasm about the economy’s prospects.”

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According to the latest issue of HSH’s Market Trends Newsletter, “Short Week, Lower Rates,” the factors that once caused rates to rise sharply have eased off for the moment.

“A few weeks ago, mortgage rates flared higher, climbing from still-economic-emergency levels. The rise came amid what was interpreted to be signals of an improving economic outlook, the potential for inflation, pondering over what the Federal Reserve and Treasury would do and rampant government spending, among other factors.”

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According to the latest issue of HSH’s Market Trends Newsletter, “Slight Slip for Mortgage Rates,” thanks to a late-week rally in Treasuries, mortgage rates dropped ever-so slightly. “The completion of a huge $104 billion debt offering by the Treasury went very well, allaying for now fears that the market won’t be able to absorb the voluminous new debt being issued.”

“Overall, fixed mortgage interest rates declined by a single basis point to 5.90% according to HSH’s Fixed-Rate Mortgage Indicator, which encompasses rates for true jumbo, conforming and “high-limit” conforming loans. HSH’s overall average for Hybrid 5/1 ARMs shed two basis points to finish at 5.31%, while conforming 30-year FRMs eased to 5.55% for the week.”

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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.”

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