Some economic trade winds are beginning to pick up, threatening to take mortgage rates with them.
A pickup in U.S. home sales, a stronger residential construction market and a stock market that has once again crested the 10,000 level have all been baked into the current mortgage rate trends cake. You’d think that might boost most — but not all — mortgage rates.
But that’s not what happened.
For the week, the universal direction was a southerly one. Thirty-year fixed-rate mortgages fell to 5.16% from 5.23%, according to the BankingMyWay Weekly Mortgage Rate Tracker. Fifteen-year fixed-rates fell likewise to 4.6% from 4.64% — some of the lowest rates the market has seen in a while.
In the adjustable-rate side of the field, one-year ARMs plummeted 60 basis points — to 4.24% from 4.84%, while three-year ARMS also saw the bottom fall out last week, to 4.49% from 5.02%. Five-year ARMs slid to 4.35% from 4.45%.
Maybe the mortgage market got the willies after the latest jobs number, which brought national unemployment to the 10% level after the economy lost another 192,000 jobs in October.
Balancing the jobless number were strong monthly showings for home sales and residential construction, feeding into the mindset that the housing market is turning around. According to the National Association of Realtors, September marked the eighth straight month of higher housing sales, rising at an annual rate of 6.1%. That’s up 21% from the same period in 2008.
The U.S. Commerce Department weighed in on new residential construction spending, reporting that spending on new home construction rose by 3.9% in September, as measured on an annualized basis. Even so, new home construction remains soft, down 26% since September 2008.
The residential construction number can be explained pretty easily — with the $8,000 new homebuyer tax credit expiring by the end of November (before Congress extended it last week through April 30, 2010) home buyers rushed to meet the deadline.