1/1/10 Mortgage Market Week-in-Review
January 03, 2010
What Did Interest Rates Do This Week?
** based on Freddie Mac weekly average survey **
30-yr Fixed - Higher
This Week: 5.14%
Last Week: 5.05%
1yr Ago: 5.10%
15-yr Fixed - Higher
This Week: 4.54%
Last Week: 4.45%
1yr Ago: 4.83%
Jumbo Fixed (Average 30-yr Fixed)
This Week: 5.895%
Last Week: 5.875%
Highlight of This Week's Major Economic Reports
2009 came to an end with mortgage rates on the rise, but to keep things in perspective - rates are comparable to where they were in late October, and much lower than this past summer's peak.
One of the main factors that contributed to the uptick in rates was the Fed winding down its purchase of Treasuries, which allowed the natural laws of supply-and-demand to take a hold on the market. Prices of bonds went up as a result, which causes yields (rates) to go up.
Nevertheless, as Freddie Mac, puts it: "Although long-term mortgage rates rose for the fourth week in a row, they still remain affordable by historical standards. Based on today's median loan amount of $138,000, monthly principal and interest payments for a 30-year fixed-rate mortgage are close to one-third less than a decade ago when rates peaked at 8.6 percent in May 2000. This translates into almost 50% less in interest payments over the full 30-year term."
What to Look for Next Week
Nothing like the state of the job market to grab everyone's attention, and we get to find out how the last month of last decade fared with the release of the December employment report. Economists expect the smallest drop in payrolls since the recession began two years ago, which - if true - we hope will signify that we're nearing the end of this "employment slump."
Short-Term Rate Outlook
Potentially Slightly Higher
** based on Freddie Mac weekly average survey **
30-yr Fixed - Higher
This Week: 5.14%
Last Week: 5.05%
1yr Ago: 5.10%
15-yr Fixed - Higher
This Week: 4.54%
Last Week: 4.45%
1yr Ago: 4.83%
Jumbo Fixed (Average 30-yr Fixed)
This Week: 5.895%
Last Week: 5.875%
Highlight of This Week's Major Economic Reports
2009 came to an end with mortgage rates on the rise, but to keep things in perspective - rates are comparable to where they were in late October, and much lower than this past summer's peak.
One of the main factors that contributed to the uptick in rates was the Fed winding down its purchase of Treasuries, which allowed the natural laws of supply-and-demand to take a hold on the market. Prices of bonds went up as a result, which causes yields (rates) to go up.
Nevertheless, as Freddie Mac, puts it: "Although long-term mortgage rates rose for the fourth week in a row, they still remain affordable by historical standards. Based on today's median loan amount of $138,000, monthly principal and interest payments for a 30-year fixed-rate mortgage are close to one-third less than a decade ago when rates peaked at 8.6 percent in May 2000. This translates into almost 50% less in interest payments over the full 30-year term."
What to Look for Next Week
Nothing like the state of the job market to grab everyone's attention, and we get to find out how the last month of last decade fared with the release of the December employment report. Economists expect the smallest drop in payrolls since the recession began two years ago, which - if true - we hope will signify that we're nearing the end of this "employment slump."
Short-Term Rate Outlook
Potentially Slightly Higher