THE BASIS POINT

WeeklyBasis 11/07/05: Rates in Line With Monetary Policy

 

We’re up another .125% on fixed and ARM rates this week, bringing the four-week increase to about .5%. Jobs growth came in weaker on Friday (which is usually good for rates), but wages came in higher. This was interpreted as another inflation signal, and rates rose accordingly. On Tuesday, the Fed made it’s twelfth .25% rate hike since June 2004. In this context, current mortgage rate levels should not come as a shock. It’s just taken markets this long to start taking these monetary policy cues. This week, it’s likely we’ll catch a reprieve from the rising trend because the only market-moving data releases come Thursday with consumer sentiment and Trade Balance. These items, unless unexpectedly out of line, should not have too much of an impact. Also bond markets are closed Friday for Veteran’s Day. With rate moves like we’re seeing, you surely have some nervous clients. I can only repeat what I said last week (and will continue to repeat it): No individual can control the markets. Be focused on your own financial objectives, and your own time horizons. So if you need additional input about the markets, just let me know.

Conforming ($200,000 – $359,650) – NO POINTS
30 Year: 6.25% (6.39% APR)
15 Year: 5.875% (6.015% APR)
5/1 ARM: 6.0% (6.15% APR)

Jumbo ($359,651 – $650,000) – NO POINTS
30 Year: 6.625% (6.765% APR)
15 Year: 6.25% (6.39% APR)
5/1 ARM: 6.125% (6.275% APR)

 

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