Mortgage Rates for the Week of May 11th, 2009
|
Loan Type |
Maximum |
Rate |
Payment per $1,000 |
Fee (Points) |
APR |
|
30 Yr. Fixed |
$417,000 |
4.500% |
$5.07 |
1.0 |
4.65% |
|
15 Yr. Fixed |
$417,000 |
4.125% |
$7.46 |
1.0 |
4.38% |
|
30 Yr. Fixed |
$729,750 |
4.875% |
$5.29 |
1.0 |
5.03% |
|
15 Yr. |
$5,000,000 |
5.750% |
$8.30 |
1.0 |
5.87% |
|
5/1 ARM |
$5,000,000 |
4.875% |
$5.29 |
1.0 |
4.99% |
|
7/1 ARM |
$5,000,000 |
5.250% |
$5.52 |
1.0 |
5.37% |
|
10/1 ARM |
$5,000,000 |
5.500% |
$5.68 |
1.0 |
5.62% |
Increased optimism about the pace of an economic recovery helped the stock market and resulted in selling in worldwide bond markets. As a result, mortgage rates ended the week slightly higher. Mortgage rates are being pressured by concerns that an economic rebound will bring increased inflation sooner than recently thought. In addition, large Treasury auctions are adding significant supply to the market, forcing yields higher. Fortunately, foreign investors remain active buyers and Fed purchases continue at a strong pace.
Comments from Fed Chief Bernanke and generally stronger-than-expected economic data fueled upward revisions to the consensus economic forecast this week. In Tuesday's testimony to Congress, Bernanke offered his most optimistic economic outlook since the recession began. He expects economic activity to "bottom out, then to turn up later this year." He warned that the labor market may recover very slowly, but he expects that the Unemployment Rate will peak below 10%. He pointed to the decline in mortgage rates as a successful outcome of Fed programs, and suggested that there have been signs that the housing market may be near a bottom. Housing sector data released during the week supported his view. Pending Home Sales, a leading indicator for the housing market, rose 3%; Construction Spending posted gains as well.
In a typical economic recovery, the labor market is one of the last areas to turn around, and the pattern is expected to hold this year. The April Employment report showed that the economy lost 539,000 jobs, which, although a large number, represents fewer jobs than expected. The Unemployment Rate rose to 8.9% from 8.5% in March. The consensus outlook is that a pickup in the job market will lag an improvement in the overall economy by several months.
