Mortgage rates stood their ground last week amidst a “turbulent” week in the markets. According to the latest issue of HSH’s Market Trends Newsletter, “Rates Steady This Week,” that’s one trend that may not last much longer.

“Mortgage rates managed to finish a fairly turbulent week in the markets at a level unchanged from [the week before]. There was a bit of underlying volatility to the stock and bond markets, though, which suggests that the quiet demeanor of rates [last] week probably won’t last.”

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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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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, “Markets, Rates Improved,” things looked quite a bit better last week than they have in previous weeks.

“Mortgage rates managed a little dip downward. The Federal Reserve’s program of buying up mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae (FHA) is serving to keep rates fairly stable even as the government continues to issue considerable volumes of new debt to cover its various stimulus and spending programs. Any declines in mortgage rates could be the result of some minor increase in investor appetite for such investments, but we think it’s more likely that demand-generated pricing premiums are easing as earlier cascades of refinancing requests have passed. In times of unmanageable volumes, lenders may increase rates somewhat in order to temper demand or to enhance the potential profitability of making a loan. After all, there’s little reason to cut prices when the store is full of customers already.”

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According to the latest issue of HSH’s Market Trends Newsletter, Rates Tip Backward; Stimulus and More Coming, “A weeks-long run of rising mortgage rates ended this week despite vague pronouncements from the new Treasury Secretary about forthcoming plans for the second $350 billion of TARP money.”

“For the week, HSH’s overall average for the cost of mortgage money — our Fixed-Rate Mortgage Indicator (includes conforming, jumbo and ‘expanded conforming’ interest rates) — dropped by eighteen basis (.18%) points to land at 5.76%, the lowest such average in a month. As mortgage rates have risen over the past few weeks, there has been a corresponding slide in applications for home loans, according to the Mortgage Bankers Association of America. Among other factors, at least some of the increase can be attributed to lenders pricing ‘defensively’ to temper an unmanageable crush of business, and it would seem that the crush has subsided enough to warrant an attempt to attract more business.”

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According to the latest issue of HSH’s Market Trends Newsletter, “Home Mortgage Rates Creep Upward,” while there are several factors that have led to a rise in mortgage rates, the 10-year Treasury remains a factor at the forefront:

“Mortgage rates moved a little higher amid the raging “stimulus” debate. It seems to us that more than one factor is the cause behind the mild lift in rates, not the least of which are glimmers of hope amid the economic data.”

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By the end of last week, market analysts got their first indications of activity for the new year. From the latest issue of HSH’s Market Trends newsletter: “Mortgage rates were basically unchanged [last] week, which included the first days of 2009. Thinly traded markets, vacations and holidays being what they are, a lack of any real direction is pretty typical.

Overall, the average 30-year fixed rate mortgage nudged a lone basis point higher. HSH’s Fixed-Rate Mortgage Indicator FRMI rose to 5.89%. The overall average for the 5/1 Hybrid ARM slipped back by fourteen basis points, landing at 5.80% for the week, the lowest such average since February 2008.

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