The following are excerpts from the HSH Associates newletter (www.HSH.com ) for the week ending July 4, 2008:
“The tug-of-war for the ultimate direction for mortgage rates continues. After weeks of rising on the heels of inflation fears, the drag of a dispirited economy exerted greater leverage this week, pulling mortgage rates back from 10-month highs. There continues to be a considerable lack of demand for certain types (of mortgages), and in order to attract even the meager amount of attention currently in evidence — and in light of market risks — mortgage debts needs to pay higher yields to keep attracting money. Thus, mortgage rates remain not only higher than they would normally be (compared to risk-free investments) but remain stubbornly firm, too.
Conforming loans which can easily be sold to Fannie Mae and Freddie Mac continue to absorb much of the available investor dollars, and so those rates remain comparatively low relative to private-market jumbos. The average for a 30-year fixed-rate conforming loan slipped by nine basis points this week, as did jumbo mortgages.
At the moment, a weakening economy held sufficient sway as to press mortgage rates downward. A lighter calendar of economic data is due out, and it’s reasonable to expect that the markets will be fully in “summer mode” now that July is here. This argues for little significant change in interest rates next week, but mortgage rates may tick down a basis point or two.”
|30 yr fixed mtg||6.22%||6.30%|
|15 yr fixed mtg||5.77%||5.87%|
|30 yr fixed jumbo mtg||7.31%||7.41%|
|5/1 jumbo ARM||6.26%||6.42%|