WeeklyBasis 05/09/05: Strong Jobs, Slightly Higher HELOCs

Rates/commentary for the week of May 9, 2005. Even with last week’s Fed rate hike and stronger-than-expected jobs growth report, rates open today only about .125% higher than the lows of the past month. Monthly jobs data is always interesting to me because of its counter-intuitive nature. Yes it’s true that an improved jobs picture signals a stronger economy and causes mortgage rates to rise. But also, employment stability and better pay mean a steady supply of ready and able home buyers. That’s something I will continue to monitor. As for this week, the real question is whether we can hold onto this month-long rate dip. The main concern will be about $51 billion in new Treasury bond supply. All this new supply is likely to dilute pricing, and this may push rates up (bond prices and yields move inverse of each other). One final reminder: last week’s Fed hike means Home Equity Line second mortgages will be .25% higher when borrowers receive their next statement. Have a great week.

Conforming ($200,000 – $359,650) – NO POINTS
30 Year: 5.625% (5.765% APR)
15 Year: 5.375% (5.515% APR)
5/1 ARM: 5.375% (5.525% APR)

Jumbo ($359,651 – $650,000) – NO POINTS
30 Year: 6.0% (6.14% APR)
15 Year: 5.625% (5.765% APR)
5/1 ARM: 5.5% (5.65% APR)