Alan Greenspan’s 1996 speech citing “irrational exuberance” came to mind for some members of the Federal Open Market Committee’s March meeting whose minutes were just released this week. In ’96, the Tokyo market, open during the remarks, took a sharp downward turn, as the rest of world markets followed. Greenspan’s speech, issued during the dot-com bubble of the 1990s, suggested the market was overvalued. Some participants at the March FOMC meeting, left feeling the market was “quite high,” according to Bankrate. A slumping auto market and a shaky Wall Street have also contributed to rate concerns. Those concerns serve to nudge investors toward safe haven Treasury securities and drive bond yields and mortgage rates lower.
Bankrate reported the lowest mortgage rates in three months, in its’ weekly national survey of the 10 top banks and thrifts in 10 top markets. Freddie Mac’s report, released on Thursday, showed a similar slumping trend, with its Primary Mortgage Market Survey showing the 30-year rate averaging 4.10 percent with an average of 0.5 point. That is down from last week’s 4.14 percent.
Last week, Freddie’s 30-year fixed rate mortgage averaged 4.14 percent. The 15-year was also down to 3.36 percent with an average 0.5 point, down from last week’s 3.29 percent. Similarly, Bankrate’s survey showed a 30-year FRM at 4.24 percent, down from 4.30 percent last week. The 15-year FRM was at 3.48 percent, down from 3.49 percent last week.
Adjustable mortgage rates dropped also, Bankrate reports, with the 7-year ARM moving to 3.63 percent and the 10-year to 3.82. Bankrate also provides a weekly Rate Trend Index. This index consists of a panel of mortgage experts predicting rate trends for the next week. Bankrate reports more than half of this week’s panelists, 55 percent, expect mortgage rates to stay fairly unchanged in the week ahead. One third foresaw a rise and 9 percent anticipated declines in the next week.