Mortgage backed securities (MBS) that rates are tied to closed last week about even (benchmark Fannie 30yr 3% coupon up 2 ticks or 6 basis points), so rates also closed even versus last week. The big event last week was release of minutes from the January 3 Fed rate policy meeting, and expectations were for more Fed bias toward imminently ending bond buying to keep rates low (aka QE or quantitative easing). But that bias wasn’t as strong as it was January 3 when the December 12 meeting minutes were released, so MBS markets caught a reprieve.
Rates as of Friday’s close below, and for the first two “conforming” tiers, rates are about .375% higher than record lows last touched January 15-16. However, jumbo loans above $625,500 and FHA loans are not not rising because secondary markets for those loans more favorable for now.
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: 3.625% (3.745% APR)
FHA 30 Year: 3.25% (3.37% APR)
5/1 ARM: 2.5% (2.62% APR)
SUPER-CONFORMING RATES ($417,001 to $625,500 cap by county) 0 POINT:
30 Year: 3.75% (3.87% 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: 3.5% (3.62% 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 Finish The Week Near Recent Highs (MortgageNewsDaily)