Mortgage Trends This Week: Jan. 11

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One person’s loss is another one’s gain.

That’s the takeaway for mortgage rate investors this week, who get to step on the backs of frustrated bank certificate of deposit investors to grab lower interest rates this week.

As measured by BankingMyWay’s Weekly Mortgage Rate Tracker, interest rates, with the exception of one-year and three-year adjustable-rate mortgages, were lower right down the line last week.

Fifteen-year fixed-rate mortgages were down to 4.69% from 4.76%, while 30-year fixed-rate mortgages fell to 5.25% from 5.31%.

While those one-year ARMs rose to 4.51% from 3.91%, three-year ARMs only inched northward to 4.63% from 4.62%. Five-year ARMs fell to 4.54% from 4.58% for the week.

While mortgage customers can expect a bump-up in rates in March, when the Federal Reserve ends its $1.25 trillion mortgage-backed securities buying spree, for now the run-up to higher rates is over.

Economists point to a lousier-than-expected jobs number last week, as the U.S. labor market shed 85,000 jobs, when most economic experts felt the economy would lose only a few thousands jobs. That put the spotlight on the so-called Great Recession, which the stock market, the latest gross domestic product numbers and our political leaders in Washington told us was over.

Well maybe not, or at least don’t tell small business owners and out-of-work Americans that things are getting better. The former isn’t hiring and the latter isn’t getting hired, and that bleak-looking picture frames the mortgage rate environment this week.

Other economic news that helped push rates downward again, comes from the U.S. mortgage market, where homeowners are once again struggling to make their payments. According to numbers released by the American Bankers Association, delinquencies on home mortgages reached a record high in the third quarter of 2009. Home equity delinquencies shot up to 4.3% for the quarter, from 4% in the second quarter of 2009. Home equity lines line of credit, or HELOCs, also rose to 2.1% from 1.9%.

Clearly, the jobs report is the main reason why rates are lower again. Investors were glad to leave 2009 behind and were eager for a clean slate in 2010, as more money poured into the stock market amidst reports of economic recovery. And while 85,000 jobs lost isn’t a huge amount (the U.S. labor market, as President Obama correctly pointed out, lost 700,000 jobs in January of 2009), it was a low enough number to give economists pause; and it was enough to drive mortgage rates downward once again.

With rates lower this week, and with the Fed’s mortgage security buyback program coming to an end, this could be the best time this year to get a good mortgage deal. To get going on that front, check out BankingMyWay’s Mortgage Rate Search. You won’t find rate deals lower anywhere else.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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