THE BASIS POINT

WeeklyBasis 07/10/06: Rates Starting To Even Out

Fixed and ARM rates are even this week over last week because Friday’s weaker-than-expected jobs and wage growth was a signal that economic growth may be slowing. Slower growth means that the Fed may be able to ease off their tightening soon. The next Fed meeting is August 8, and most economists think we’ll see another .25% increase then a pause. The only important economic data this week comes Friday with Retail Sales and Consumer Sentiment, both measuring the resilience of the consumer as rates have risen. Also corporate earnings season kicks off, so markets will be driven mostly by fluctuations between stock and bond markets based on earnings reports. Good earnings are bad for rates because investors sell bonds to buy stocks (which pushes bond yields/rates up), and vice versa.

Conforming ($200,000 – $417,000) – NO POINTS
30 Year: 6.75% (6.89% APR)
10/1 ARM: 6.75% (6.89% APR)
5/1 ARM: 6.625% (6.775% APR)

Jumbo ($417,001 – $650,000) – NO POINTS
30 Year: 6.875% (7.015% APR)
10/1 ARM: 6.875% (7.015% APR)
5/1 ARM: 6.75% (6.9% APR)