Mortgage backed securities (MBS) that rates are tied to closed up this week (benchmark Fannie 30yr 3% coupon up 20 ticks or 63 basis points to close at 103-21), causing rates to drop .125% versus last week—this is the lowest level since mid-January. Rates drop when bond prices rise on a buying rally like we had this week, and the rally was driven by three main macro issues: Bernanke reaffirming commitment to QE, Italy’s election reminding markets Eurozone debt troubles are far from over, and a similar level of fiscal paralysis in the U.S.
Rates as of Friday’s close below, and for the first two “conforming” tiers, rates now are about .25% higher than record lows last touched January 15-16.
Also below is a link to my daily commentary along with the MortgageNewsDaily MBS team and Barry Ritholtz’s quick list of the week’s good and bad U.S. economic events/data.
CONFORMING RATES ($200,000 to $417,000) 0 POINT:
30 Year: 3.5% (3.62% APR)
FHA 30 Year: 3.25% (3.37% APR)
5/1 ARM: 2.375% (2.495% APR)
SUPER-CONFORMING RATES ($417,001 to $625,500 cap by county) 0 POINT:
30 Year: 3.625% (3.745% APR)
FHA 30 Year: 3.375% (3.495% APR)
5/1 ARM: 2.75% (2.87% APR)
JUMBO RATES ($625,501 to $2,00,000) 1 POINT:
30 Year: 3.375% (3.495% APR)
10/1 ARM: 3.0% (3.12% APR)
5/1 ARM: 2.5% (2.62% APR)
Lower or higher rates apply to specific borrower and property profiles. Lower or higher rates available using tax deductible points or zero-cost transactions. These rates assume full doc pricing on Single Family Home purchase loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. Jumbos shown as range since they’re less market sensitive and change randomly based on lender pricing competition. Rates based on loan amount ranges shown and rates available at the time of production. Rates aren’t a loan commitment nor a loan guarantee, and are subject to change without notice.
*Conventional Super-Conforming cap = $625,500. FHA Super-Conforming cap = $729,750.
– Mortgage Rates Drift To One Month Lows (MortgageNewsDaily)