WeeklyBasis 02/13/06: Bernanke In, How Will Markets React?

Fixed rates are even this week and ARMs are up about .125%, due mostly to a bond market selloff late last week. When bonds prices drop during a selloff, bond yields (rates) rise and so do the mortgage rates that are pegged to those yields. This week is full of consumer, manufacturing and housing data including Retail Sales, Industrial Production, Producer Inflation and Housing Starts, and Consumer Confidence. On top of all this, we’ve also got new Fed Chairman Ben Bernanke’s first-ever congressional testimony on the economy Wednesday. Unlike Greenspan’s often obtuse testimony, Bernanke is known for being straightforward. This might prove to be helpful for regulating markets in the long term, but as he gets started with his public facing job duties Wednesday, you can be sure the markets will react strongly to his words. Problem is that nobody truly knows what he’s going to say. My prediction is that rates rise slightly.

Conforming ($200,000 – $417,000) – NO POINTS
30 Year: 6.125% (6.265% APR)
15 Year: 5.875% (6.015% APR)
5/1 ARM: 6.125% (6.275% APR)

Jumbo ($417,001 – $650,000) – NO POINTS
30 Year: 6.375% (6.515% APR)
15 Year : 6.125% (6.265% APR)
5/1 ARM: 6.25% (6.4% APR)