San Jose Mortgage Rate (30 Year Fixed and 5 Year ARM) and Market Commentary for the week of May 3rd, 2010.

The week that was:

  • Freddie Mac in its Primary Mortgage Market Survey reported that 30-year fixed-rate mortgage averaged 5.06 percent with an average 0.7 point for the week ending April 29, 2010, down slightly from last week when it averaged 5.07 percent. The 5-year adjustable-rate mortgage (ARM) averaged 4.00 percent this week, with an average 0.6 point, down from last week when it averaged 4.03 percent.

“Mortgage rates on 30-year fixed loans have averaged about 5 percent over the first four months of this year, staying within a band of roughly a quarter percentage point and virtually matching 2009 annual average,” said Frank Nothaft, Freddie Mac vice president and chief economist.” These low rates have been helping to moderate house price declines over the course of the year.

  • Most of the week markets focused on the debt issues in the European Union led by the cliff-hanging balancing on Greece’s potential sovereign debt defaults.
  • Last week’s economic data, the few there was, were generally indicative of recovery. Key stock indexes ended the week lower even with better reports from the Chicago manufacturing report covering the mid-west and another decline in unemployment filings.
  • The FOMC meeting concluded with continued comments that the Fed will interest rates low for a lot longer.
  • Treasury sold $118B in 2 yr, 5 yr and 7 yr notes, of the three auction the 7 yr note on Thursday was the strongest as the Fed continues to confirm that inflation is not on the radar.

The Week that will be:

  • Monday has March personal income and spending and the April ISM manufacturing report. There key data points each day this week, but the big one markets will be setting up for, comes on Friday with the March employment report. The early estimates are for non-farm payrolls to have increased about 200K with the unemployment rate unchanged at 9.7%.
  • Interest rate markets will likely continue in their respective narrow and directionless pattern with not much change by the end of the week. We do expect some increased volatility early this week based on economic releases and continuing news coming from the EU over the debt problems in Europe.
  • The Goldman-Sachs civil suit and now a possible criminal charge will also get attention from investors and traders this week.

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