For the week, HSH.com's FRMI, their overall average for mortgage rates (including conforming, jumbo and agency jumbo), downshifted by five basis points, closing the survey period at 5.24%. Both conforming and jumbo rates declined this week, with conforming 30-year FRMs slipping to a 4.91% weekly average. At the same time, the overall average for 5/1 Hybrid ARMs managed a five-basis point slip of its own, landing at 4.56% for the week. Some aggressively-priced 5/1 ARMs can now be found in the market with rates starting as low as the mid-3% range.
Readers and visitors who regularly follow our work know that fluctuations in mortgage rates are a regular recurrence, and that rates rise much more quickly than they fall. This being the case, they always advise borrowers that when they've got a mortgage in place that makes their purchase or refinance deal work, they should lock in the interest rate, rather than trying to guess at any kind of bottom in the market.
Their educated readers also know that 30-year FRMS holding tightly to either side of a 5% threshold is a great deal, whether it's upper 4% or low 5% on the bottom line. Interest rates will kick a little higher next week, probably all the way back to (yawn) early November levels, when they were only outstanding.
There are many issues still facing the economy, so the enthusiasm fostered by this week's better numbers probably fades to some degree next week. A fairly light economic calendar should have all eyes on Friday's retail sales numbers. Still, the flare in underlying rates should push mortgage rates higher, and we'll probably move about an eighth-percentage point higher than this week.
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