Mortgage Rate Trends: Weekly Market Trends & Forecast
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Rates Fairly Level For Holiday Mortgage Shoppers
November 27, 2013 -- Populated with sizable discounts, "doorbuster" sales, extended hours that now intrude into the Thanksgiving holiday, "Black Friday" is the retailer's bellwether day of the year. Although it would be most interesting if such discounts appeared in mortgage prices, they don't. The image of potential homebuyers and refinancers waiting on lines at a mortgage banker's office at 3am is to get a quarter-point savings is certainly an amusing one but one we are unlikely to see. This being the case, if any are out shopping for financing on Friday, they will need to content themselves with attractive and stable rates this year.
With a shortened, holiday-infused week this week and only a small group of economic data to consider, mortgage rates moved the smallest week-to-week amount of the last month.
HSH.com's broad-market mortgage tracker -- our weekly Fixed-Rate Mortgage Indicator (FRMI) -- found that the overall average rate for 30-year fixed-rate mortgages increased by four basis points (0.04%) to 4.41%. The FRMI's 15-year companion sported a rise of three basis points (0.03%) from the prior week's value, increasing to 3.51%. The popular FHA-backed 30-year FRM moved a little further away from the four percent level, with a three basis point rise nudging it to 4.05% for the week. For its part, the overall 5/1 Hybrid ARM moved by the least of the bunch, adding just one one-hundredth of a percentage point (0.01%) to 3.03% for the week.
See this week's Statistical Release and Mortgage Trends Graphs.
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Some housing news was available this week, but only as an incomplete picture. Normally, the Census Bureau releases both housing starts and building permits together, but October's data was affected by the shutdown, so only he measure of building permits was available for the month. Permits did rise smartly, though, climbing by 6.2 percent to a 1.034 million annualized rate. As they have been for several months, single-family permits were fairly flat at a 620,000 (annual) rate, so all the gains came from the multi-family sector, which popped higher to 414,000 units planned to be built at a future date.
According to the Chicago Federal Reserve, the rate of economic growth slipped below par in October. That's the message seen from the National Activity Index, an amalgam of some 85 economic indicators. The minus 0.18 reading for the month was a mirror image of September's positive 0.18 and could be the result of some shutdown influence in the underlying data. Still, with September and August figures being revised upward there's no concern as yet that some major slowdown is happening. Rather, it could just be that the we have slipped a little below the economy's natural rate of growth, believed to be something on the order of a GDP of 2.6 percent or so.
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Slippage of a good sort was seen in the number of initial jobless claims. For the week ending November 23, just 316,000 new applications for unemployment assistance were filed at state offices, the lowest such figure since downward distortion days of early September, but this figure is probably a valid and more trustworthy one. If the present downward trend can be trusted, we might just see a pickup in hiring when the November employment comes out next week. The initial read on October's hiring was a firm 204,000 and there is at least some reason to believe that November may approach that level as well.
The index of Leading Economic Indicators cooled somewhat during October, managing a gain of just 0;2 percent after a 0.9 percent flare in September. The Conference Board's indicator has had only one foray into negative ground so far in 2013 (and one month of flatline) and so the suggestion is that the economy will continue in its slow growth pattern as we approach 2014, and perhaps as we wend our way into next year, too.
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Orders for durable goods continue their familiar seesaw pattern of expansion and contraction. For October, it was contraction's turn, and orders for goods intended to last three years or longer declined by a full2 percent for the month. September was a stronger month than was first estimated, and orders actually rose by a stout 4.1 percent for that period. With housing contributing demand for appliances, air conditioners and the like, and with auto sales fairly solid, durable goods orders are likely to see an return to uptick next month, as is their nature.
Consumer moods are less erratic than are orders for things, though. After mostly moving higher though the middle of the year, all available measures entered downturns as they reflected the mess that has been happening in Washington, what with the debt ceiling and budget impasses which ultimately resulted in the 16-day shutdown last month. After last winter's "fiscal cliff" mess decimated moods it took months for them to recover, and that's probably going to be the case after the latest episode... and only if we can avoid more of the same political dysfunction we've endured.
HSH's Statistical Release features charts and graphs for eleven mortgage products, including Hybrid ARMs.
Our state-by-state statistics are now here.
That said, the latest measure of Consumer Confidence slipped by two points in November, landing at 70.4 for the month, the lowest figure since April. An interesting item contained within the report was the measure of the likelihood of a home purchase in the near future; that sub-index slipped to its lowest value since February, so perhaps some slowing of home sales might be expected in the period just ahead. In a different assessment of consumer attitudes, the University of Michigan survey of Consumer Sentiment managed a 1,9 point improvement, with the figure reported here rising to 75.1 for the final November reading. Despite the increase, though, Sentiment remains well below the best values of the year, but perhaps we are starting to again move in a upward direction. That may have been seen as well in the weekly Bloomberg Consumer Comfort Index for the week ending November 24; the CCI added 0.9 points to rise to minus 33.7 for the week, the indicator's first upward bump in a number of weeks.
There's not a whole lot to say about the direction for mortgage rates this week. We are in a bit of a lull -- call it a sweet spot, if you will -- between Fed meetings, between significant economic reports, and in a once-in-a-many-lifetime concurrence of the Thanksgiving and Hanukah holidays. That markets are mostly behaving is something to be grateful for, since we've seen plenty of volatility this year and even this month. As you gather with family, friends and loved ones to celebrate one or more holidays, please take a minute to consider those Americans in the military, far from families or even friendly confines, as well those less fortunate than you might find yourself.
For a longer-range outlook for rates and the economy, one which will take you up until mid December, have a look at our new Two-Month Forecast.
Still underwater in your mortgage despite rising home prices? Want to know when that will come to an end? Check out our KnowEquity Underwater Mortgage Calculators, to learn exactly when you will no longer have a mortgage greater than the value of your home.
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