WeeklyBasis 08/08/05: Bonds Still Selling, Rates Up Slightly

After the positive jobs growth data Friday, rates are up for the fifth straight week – bringing the total to about +.5%. More jobs and stronger manufacturing data mean the economy is improving. So investors are more confident in the markets and seek higher returns from stocks. They sell bonds to buy stocks, and this pushes bond yields (and mortgage rates) higher. We are likely to see more of the same up-trend this week as the Fed raises it’s overnight bank-to-bank lending rate by another .25% on Tuesday, and with July retail sales data on Thursday. Remember, we’re in a record low period historically. These are just trading fluctuations, and they’re inevitable, especially following a long-term low rate trend.

Conforming ($200,000 – $359,650) – NO POINTS
30 Year: 5.875% (6.015% APR)
15 Year: 5.5% (5.64% APR)
5/1 ARM: 5.625% (5.775% APR)

Jumbo ($359,651 – $650,000) – NO POINTS
30 Year: 6.125% (6.265% APR)
15 Year: 5.75% (5.89% APR)
5/1 ARM: 5.625% (5.775% APR)