Saturday, February 7, 2009

Home Mortgage Rates Creep Upward

Ann Arbor real estate update - Mortgage rates rise slightly amid federal stimulus debate.
February 6, 2009 -- Mortgage rates moved a little higher amid the raging "stimulus" debate. It seems to us that more than one factor is the cause behind the mild lift in rates, not the least of which are glimmers of hope amid the economic data.

Fixed-Rate Mortgage Indicator - inclusive of conforming, jumbo and 'expanded conforming' interest rates -- rose by eight basis points (.08%), finishing the week at 5.94%. The companion overall 5/1 Hybrid ARM average moved .06 upward, landing at a week-ending value of 5.67%. Conforming 30-year FRMs (fixed rate mortages) trudged upward by nine basis points, while Jumbo 30-year FRMs actually declined to 6.83% for the period.

One of the factors pressing interest rates higher is that the influential 10-year Treasury continued to move higher, and finished the week stalking the 3% mark. As we've noted on a number of occasions, the Treasury has still considerable but somewhat diminished influence on FRM rates in the present environment. For example, the 10-year Treasury has now risen by 75 basis points since touching a weekly low of 2.18% on December 26, but conforming mortgage rates have only lifted by 31 basis points over that time.

Courtesy Rick Richter, Goldstar Financial- Ann Arbor, Michigan

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