Rates and commentary below are as of November 10, 2003. Rates on 15yr and 30yr fixed loans are up about 0.2% from last Monday, but ARM rates are holding near their lows. No major economic news scheduled for release until this Friday, so the bond market and rates should be relatively calm until then. The key release for Friday will be October Retail Sales. This measures consumer spending, which accounts for two-thirds of the U.S. economy. If retail sales are higher than the 0.1% projected increase, it will be negative for rates, because investors will sell bonds (causing bond prices to fall and yields to rise) and buy stocks. Many economists are looking for a positive retail number to follow the large 3rd quarter GDP number from two weeks ago (an increase of 7.2%), and the jump in payrolls from last Fridays employment report. Also, retailers are projecting holiday sales growth between 3% and 7% this year, as opposed to the 2.2% increase from 2002. All of this positive economic news, if it is sustainable, will eventually lead to rates coming up in 2004.
Between now and the end of the year, rates are still the lowest since the 1960s. If you are are thinking about delaying a home purchase until after the holidays, these trends make a strong case to get into the market now. Don’t forget I can close your loans in 15 days, or bank fees will be waived.
Conforming ($50K – $322,700K) – NO POINTS
30 Year: 6.0% (6.14% APR)
15 Year: 5.25% (5.39% APR)
5/1 ARM: 4.875% (5.025% APR)
Jumbo ($322,701 – $650,000) – NO POINTS
30 Year: 6.25% (6.39% APR)
15 Year: 5.75% (5.89% APR)
5/1 ARM: 5.0% (5.15% APR)