THE BASIS POINT

30yr Rates Up To 5% After Lower Jobless Claims & Higher Manufacturing Inflation

 

Rates improved a bit yesterday and gave up ground today, making 30yr fixed rates on loans up to $417k hold at 5%, with higher loan amounts and condo loans about .125% to .25% higher.

Rates improved yesterday after Housing Starts fell as expected and Building Permits rose almost 17%, then retreated a bit today after weekly Jobless Claims came out at 404k, a big drop from down from 441k, bringing the 4-week moving average down by 4000. Also today, we saw that December Existing Home Sales rose 12.3% to a seasonally adjusted annual rate of 5.28m from an upwardly revised 4.7m in November, but remain 2.9 percent below the 5.44m pace in December 2009. We also saw that the Philly Fed survey, a measure of manufacturing and inflation outlook, showed that manufacturing activity and prices are expected to rise. This plus renewed fear about inflation in China and the release of next week’s Treasury auctions are weighing on bond markets, causing today’s rate retreat.

 

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