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August 31st, 2012

Two-month forecast for mortgage rates



Expert resized-HSH SpecialEvery nine weeks, HSH.com releases a “Two-month forecast for mortgage rates.” We start by taking a look back at the previous two months, move on to analyze current market influencers then ultimately provide a rate range for where mortgage rates of different products will wander in the near future.

How did we do last time?

Back in June, we predicted that “Occasional new record lows seem likely during the forecast period,” and that turned out to be quite true. In fact, four of the nine weeks featured new low points for HSH.com’s fixed-rate mortgage indicator (an overall average for conforming, non-conforming and jumbos).

We believed that the range for HSH.com’s FRMI would wander between 3.85 percent and 4.12 percent. While we nailed the low, the high for the forecast period never topped 3.98 percent.

Our guess for the overall 5/1 Hybrid ARM was a range of 2.77 percent to 2.97 percent, and we stood almost in the middle of that range, moving between a high of 2.89 percent to a low of 2.80 percent.

For conforming, 30-year fixed-rate mortgages, we expected to sway between 3.94 percent and 3.65 percent. We actually saw a range of 3.80 percent to 3.66 percent.

Overall, we’ll call out last forecast a reasonable success.

Our latest forecast

As we move almost halfway through the third quarter, we have seen a slight overall improvement from the second quarter.

“Unemployment claims have slipped back a little, hiring has picked up a tad, retail sales have improved and manufacturing has at least stabilized, albeit at a break-even, no-growth level, but still better than continued decline,” wrote Keith Gumbinger, vice president of HSH.com and author of the forecast.

“We’re not quite at a point of stasis or stagnation, and there’s nothing wrong with modest growth if it is reliable. More would of course be better, but it will have to come organically if we are to see it.”

If you haven’t already, be sure to read our latest “Two-month forecast for mortgage rates” to see where interest rates will be between now and the end of October.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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