THE BASIS POINT

WeeklyBasis 08/29/05: Rates Hold in Face of Hurricane Katrina Effects

This is the third straight week of fixed and ARM rates holding at the same low levels. As expected, last week’s slightly softer home sales data helped to keep rate markets steady. This week, markets are off to a conservative start as they await the effects Hurricane Katrina will have on the gulf region. Most notably, New Orleans is home to 18% of the U.S.’s domestic oil and gas distribution, and 13% of oil imports travel through that port city. As refineries tally the damage, gas prices will probably run up commensurately. This will hit consumer confidence, and should keep rates at the same levels, or perhaps pull rates down. The biggest data this week comes Friday with the August jobs growth report, which always has a meaningful effect on rate markets. Estimates call for 190,000 new jobs. If it’s more than this, look for rates to go up. My bet is that it will come in even or slightly short.

Conforming ($200,000 – $359,650) – NO POINTS
30 Year: 5.75% (5.89% APR)
15 Year: 5.375% (5.515% APR)
5/1 ARM: 5.5% (5.65% APR)

Jumbo ($359,651 – $650,000) – NO POINTS
30 Year: 6.0% (6.14% APR)
15 Year: 5.625% (5.79% APR)
5/1 ARM: 5.5% (5.65% APR)