THE BASIS POINT

WeeklyBasis 01/09/06: ARMs Continue with Great Pricing

 

Lenders started 2006 with aggressive pricing – especially with ARMs – and the trend continues this week. What I mean by this is that ARM rates are below what bond market yields might suggest. Lenders have had help from lower bond yields since mid-December, but there have definitely been extra pricing incentives since 2006 began. The big data this week comes Friday with Producer Prices which are a key inflation measure, and Retail Sales which will give us the first definitive look at the holiday shopping season. For the week, I think rates should be flat or slightly higher. As for some market predictions for 2006, I am currently working on this (for my February newsletter), and will send it out in this WeeklyBasis email in the next week or two.

Conforming ($200,000 – $417,000) – NO POINTS
30 Year: 6.0% (6.14% APR)
15 Year: 5.625% (5.765% APR)
5/1 ARM: 5.75% (5.9% APR)

Jumbo ($417,001 – $650,000) – NO POINTS
30 Year: 6.375% (6.515% APR)
15 Year: 6.0% (6.14% APR)
5/1 ARM: 5.875% (6.025% APR)

 

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