Mortgage Rates: Week Ended May 10

After dropping four straight weeks and hitting lows of 2013 (but never closing at record lows), rates started rising again last Friday as mortgage and Treasury bonds started selling sharply after the April jobs report. The selling continued today as technical support of 1.83 on the 10yr Note was breached, causing more selling of 10yr Notes which closed at 1.89 (compare this to 1.61 on May 1). Mortgage bonds lenders use as benchmarks for rate pricing take cues from the 10yr Note, and also sold today. Rates rise when bond prices drop on selloffs.

Rates in 3 tiers below as of today’s close. Technicals as well as news of Fed winding down QE don’t bode well for a correction Monday.

This is a wake up call for rate shoppers.

Below are top positive/negative market events this week, and a link to my daily commentary with the MortgageNewsDaily MBS team, which is more action oriented for rate shoppers each day. Definitely click over and the MortgageNewsDaily piece by Matt Graham, he does a good job of explaining what’s going on.

CONFORMING RATES ($200,000 to $417,000) 0 POINT:
30 Year: 3.5% (3.62% APR)
FHA 30 Year: 3.25% (3.37% APR)
5/1 ARM: 2.625% (2.745% APR)

SUPER-CONFORMING RATES ($417,001 to $625,500 cap by county) 0 POINT:
30 Year: 3.75% (3.87% APR)
FHA 30 Year: 3.25% (3.37% APR)
5/1 ARM: 2.875% (2.995% APR)

JUMBO RATES ($625,501 to $2,00,000) 1 POINT:
30 Year: 3.625% (3.745% APR)
10/1 ARM: 3.125% (3.245% APR)
5/1 ARM: 2.5% (2.62% APR)

Lower or higher rates apply to specific borrower and property profiles. Lower or higher rates available using tax deductible points or zero-cost transactions. These rates assume full doc pricing on Single Family Home purchase loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. Rates based on loan amount ranges shown and rates available at the time of production. Rates aren’t a loan commitment nor a loan guarantee, and are subject to change without notice.

*Conventional Super-Conforming cap = $625,500. FHA Super-Conforming cap = $729,750.
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Reference:
Why Did Rates Spike So Quickly To 1-Month Highs? (MortgageNewsDaily)

Succinct Summation Of The Week’s Events (TheBigPicture)

$MBB, $TLT