WeeklyBasis 08/15/05: Rates Finally Come Down on Small Market Correction

After five straight weeks of rising rates, we finally start a week with a rate improvement. We’re only down about .125%, but at least the up-trend is broken – for now. Last Tuesday, the Fed increased its overnight bank-to-bank lending rate by .25%, and afterward, Treasury markets started correcting. They usually price in the anticipated rate increases in advance, then calm down once the Fed has made their statements – this is what happened here. The .25% increase affects home equity lines of credit, but doesn’t have an immediate impact on intermediate ARMs and longer-term fixed loans. As for this week, it’s inflation watch, with Consumer Prices (CPI) Tuesday and Producer Prices (PPI) Wednesday. If these are higher than expected, we can see rates go up again. Otherwise we should remain in this trading range for a bit.

Conforming ($200,000 – $359,650) – NO POINTS
30 Year: 5.75% (5.89% 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: 6.0% (6.14% APR)
15 Year: 5.75% (5.89% APR)
5/1 ARM: 5.75% (5.9% APR)