Interest rate news from HSH Associates

Quietly, 30-year fixed mortgage rates have trended to new highs for 2006, rising two basis points to and at an average 6.39%, according to the national survey of mortgage rates and terms conducted by HSH Associates, Financial Publishers. HSH also noted that the average rate for a five-one HybridARM rose six basis points to close the survey period at 6.04%.

Statistics for other loan terms and types can be found at http://www.hsh.com/stats-index.html.

A light economic calendar this week left markets to focus on the new issuance of the 30-year bond, which returned to the market after a four-year hiatus. The auction of the new debt was well received, especially by foreign central banks. The strong demand for the new bond drove its yield down below that of most other maturities on the yield curve, which is now nearly fully “inverted”.The yield curve has become inverted because there has been tremendous demand for US Treasuries, mostly at the longest end of the curve at a time when inflation pressures are moderate and believed to be manageable

Mortgage rates have now retraced an 18-basis point (.18%) decline which occurred from December 16 through January 20. In the past three weeks, interest rates have climbed back up by 16 of those 18 basis points, and there’s nothing to indicate any halt to the steady creep upward at the moment. At the same time, there doesn’t seem to be much reason for rates to continue to press significantly higher, either, but it wouldn’t take much to get them to multi-year highs from current levels.