Two weeks ago I suggested that homebuyers be ready to act swiftly if mortgage rates dipped, since most experts are predicting that rates will remain on an upward trend as we look forward. I hope you potential homebuyers out there were listening because mortgage rates did ease last week, and current market conditions have made things quite affordable.
Mortgage rates increased last week to “better than five-month highs,” with certain expressions cracking the five percent mark for the first time in what feels like ages.
The latest issue of HSH.com’s “Market Trends Newsletter” explains the reasons behind this recent upswing in mortgage rates: Read the rest of this entry »
If you were following us last week you would have read that mortgage rates once again fell to record lows. How low? We’re talking the lowest levels in 54 years. On Thursday of last week, the 30-year Conforming fixed rate rang in at 4.69%, a figure last seen in 1956.
“There was a time when ultra-low mortgage rates would create a cascade of activity, 40-point headlines, and a bombardment of lender phones — a crush of volume that would overwhelm lender staffs,” according to the latest issue of HSH.com’s Market Trends Newsletter.
You may be saying, “Huh?”
Remember, the firming of rates is just one part of an overall economic recovery, and that’s a good thing, according to the latest issue of HSH.com’s Market Trends Newsletter:
No, it’s not good news that mortgage rates are firming up a bit; rather, it’s good economic news that is fostering the mild rise in rates. As the worst of the recession ever-so-slowly begins to fade behind us, and the technical recovery starts to include wider facets of the economy, borrowers and mortgage-watchers should become more accustomed to hearing of firmer rates in the marketplace.
The transition from a Federally-backed mortgage market to a more private-oriented one is officially underway. While rates did rise during this transition, the increase was relatively minor.
According to the latest issue of HSH.com’s Market Trends Newsletter, “Mortgage Rates Rise (A Little)” (emphasis added):
Mortgage rates rose [last] week, at least a little bit. Most of the increase wasn’t due especially to the end of the Federal Reserve’s MBS purchase program, but rather to good, old-fashioned economic data and perhaps even some increase in investors searching for places to put their money outside of ultra-safe investments.
Poor economic news last week brought on good news for would-be homebuyers and refinancers. According to HSH.com’s most-recent Market Trends Newsletter, last week’s downward trend in rates could carry over into this week (emphasis added):
While the inventory-led “technical” economic recovery pushed the latest revision of the nation’s Gross Domestic Product to a robust 5.9% increase in the fourth quarter of 2009, more than a few signs [last] week pointed to a much more muted pace of growth.
Mortgage shoppers continue to play tug-of-war between consistently-low mortgage rates and tight credit conditions:
[Last] week, the overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI was unchanged from [the week prior] at 5.42%. The FRMI includes conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation. It also has a Hybrid 5/1 ARM counterpart, which increased by one basis points during the latest survey cycle, landing at 4.60% for the week.
The latest Senior Loan Officer survey of lending conditions, released [last] week, revealed some fair signals that the tightening of credit conditions were starting to come to an end. For the first time since the downturn began, a net percentage of banks eased borrowing terms for Commercial and Industrial loan clients, suggesting that market conditions for these kinds of borrowers has improved considerably. Four quarters ago, over 64% of banks were still tightening, so this is a fairly rapid – and welcome – improvement.
“As expected, the recent slide in mortgage rates came to a soft halt [last] week,” according to the latest issue of HSH.com’s Market Trends Newsletter. As stated in the release immediately following their two-day meeting, the Federal Reserve maintained that their MBS purchase program would end as planned on March 31, 2010. Despite the fact that many (including us) foresee a legitimate rise in rates when that program ends, rates held steady for the most part:
[Last] week, the overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI rose by a single basis point (0.01%) to 5.42%. The FRMI includes conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation. It also has a Hybrid 5/1 ARM counterpart, which shed six basis points during the latest survey cycle, landing at 4.59% for the week. Conforming 30-year fixed mortgage rates eased by a couple of basis points while jumbos moved a like amount upward.
The turbulent market works to the advantage of mortgage shoppers once again. According to “Amid Many Market Concerns, Mortgage Rates Still Easing,” the latest issue of HSH’s Market Trends Newsletter, conforming 30-year fixed rate mortgages have fallen to their lowest levels in about a month:
To the benefit of Treasuries and mortgages, stock markets continued to crater amid less-than-stellar earnings reports, with the downturn exacerbated by new rounds of populist bank-bashing, this time via a unique taxation proposal from the Obama Administration.
Mortgage rates eased some more last week, and according to the latest issue of HSH’s Market Trends Newsletter, “there doesn’t seem to be an economic report [out this week] which might cause a measurable firming for rates.” At the moment, any pessimistic economic outlook should work to the advantage of potential homebuyers and refinancers:
Now that the holiday season is behind us, the resumption of more regular activity will again start to reveal how the market perceives prospects for growth and inflation. If the stock and bond markets movements [last] week were any indication, there has been some fading of optimism about growth and concerns about inflation.
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.
