Mortgage rates fall to January lows

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 inbox Friday evening.

falling ratesBuilding political tensions and saber-rattling from North Korea, Japan going nearly all-in on quantitative easing, and a worrisome downshift in economic activity helped bonds to rally last week, driving some yields down to 2013 lows. Mortgage rates followed right along, moving downward somewhat, offering a little better opportunity for folks to finance or refinance with rates a little nearer to record lows.

If the effects of the spending sequestration are still largely unassimilated into the economy, this recent economic slowness could be exacerbated. As a result, the economy may simply continue to limp along, failing to produce a period of strong growth that would allow for tapering or termination of the Federal Reserve’s monetary IV drip.

Of course, that’s good for mortgage rates.

Mortgage rates matching record lows’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) eased by five basis points (0.05 percent) to 3.77 percent, its lowest rate since late January.

The overall average rate for 15-year fixed-rate mortgages (conforming, non-conforming and jumbo) slipped by three basis points (0.03 percent) to 3.02 percent for the week.

FHA-backed 30-year fixed-rate mortgages managed a decline of four basis points (0.04 percent), falling to an average rate of 3.35 percent, while the overall average rate for 5/1 Hybrid ARMs dropped by two hundredths of a percentage point, landing at an average 2.65 percent, matching an all-time low.

Falling mortgage rate expected this week

The steady drumbeat of not-as-good-as-expected data and various global issues have helped interest rates to fall, mortgage rates among them.

The slippage in rates last week should persist into this week and may allow some of the more marginal refinance candidates a crack at it again. Rates are likely to slip over the next couple of days, just in time for the spring home buying season to get fully underway.

Absent a spate of really good news from the forthcoming retail sales, weekly jobless claims or consumer sentiment reports, average rates can be expected to fall by perhaps a tenth percentage point (0.10 percent) this week.

HSH Associates Financial News Blog

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