WeeklyBasis 04/18/05: Low Rates Means to Buy Now

Rates/commentary for the week of April 18, 2005. If you’re thinking about writing an offer on a new house, this is the week to do it. Fixed and ARM rates open down .25% this week on stock weakness and lower consumer sentiment last week. This sharp improvement has come as investors have dumped stocks for safer treasury and mortgage bonds. When bond prices trade up, yields (and mortgage rates) decline. Suddenly the inflation concerns that were driving rates higher seem to have subsided. Producer Prices Tuesday and Consumer Prices Wednesday will provide hard data to prove whether or not the market is guessing correctly. These two key inflationary indicators are expected to show modest gains. If true, markets could trade in this lower range for a bit longer. But this shouldn’t sway the Fed’s “measured” rate increases because the one-year (through February) CPI and PPI increases are still notable even if this week’s single-month figures don’t prove significant. This also means that we can’t count on this rate dip holding. We’ll certainly take it for now though!

Conforming ($200,000 – $359,650) – NO POINTS
30 Year: 5.625% (5.765% APR)
15 Year: 5.25% (5.39% APR)
5/1 ARM: 5.25% (5.40% APR)

Jumbo ($359,650 – $650,000) – NO POINTS
30 Year: 5.875% (6.015% APR)
15 Year: 5.5% (5.64% APR)
5/1 ARM: 5.375% (5.525% APR)