WeeklyBasis 12/05/05: Rates Up Slightly on Pre-Fed Hedge

Even though bond yields (a proxy for mortgage rates) are up about .125% this week after a string of positive economic news, most lenders’ rates opened the week unchanged. This happens in times of volatility, and it’s simple supply and demand. If rising rates are pushing borrowers out of the market, lenders end up with lots of unused funds to lend, so they lower rates to bring borrowers back in even if it means thinning their spreads relative to bond and other rate markets. But they never price themselves too far from the market (or for too long), so as traders make their final hedges before next Tuesday’s Fed meeting, it’s reasonable to expect rates will tick up a bit. Have a great week, and have fun people-watching on the holiday party circuit!

Conforming ($200,000 – $359,650) – NO POINTS
30 Year: 6.25% (6.39% APR)
15 Year: 5.875% (6.015% APR)
5/1 ARM: 6.0% (6.14% APR)

Jumbo ($359,651 – $650,000) – NO POINTS
30 Year: 6.5% (6.64% APR)
15 Year: 6.125% (6.265% APR)
5/1 ARM: 6.125% (6.265% APR)