(Best Syndication News) Mortgage interest rates sank quickly today as lenders watched their benchmarks drop after the election (see the mortgage rate charts below). Bank of America, Citibank, JpMorgan Chase, and HSBC all lowered their rates in response to the changing marketplace.
The first post-election equity trading session was a big disappointment for investors. Two issues were front and center: The looming fiscal cliff and a worsening European recession that could be spreading to Germany. Although Republican and Democrat leaders agreed to work together to hammer-out the debt-ceiling issue before the January 1st deadline, uncertainty continued to spread through Wall Street.
Some investors believe President Barack Obama’s tax policy will hurt corporate profits. There is also the specter of more regulations. The concerns were evident in the sell-off of banking, healthcare, and energy stocks.
If Congress is unable to work-out a fiscal-cliff solution, the U.S. economy could enter another recession next year. Despite the entrenched political stances taken by government leaders, many analysts still believe that a compromise will be reached.
Not all healthcare stocks took a hit. Molina Healthcare, Inc. (NYSE:MOH) jumped more than four percent during the session. Investors are now certain that Obamacare will become the law-of-the-land and there will be an additional 12 million customers for Medicaid and insurers. WellCare Health Plans, Inc. (NYSE:WCG) was another winner, up more than four percent. Both companies have large exposures to Obamacare; however there could be a budget deal putting some of their gains at risk.
The Dow suffered its worse sell-off since June. Riots in Greece and news that European Commission economists cut their 2013 growth forecast for Germany from 1.7 percent to 0.7 percent put downward pressure on stocks.
The Dow Jones Industrial Average (DJIA) index fell more than 300 points. The S&P 500 and NASDAQ sank 2.37 percent and 2.48 percent respectively.
As money flowed away from equities and into government safe havens, the price for bonds and notes began to rise pushing yields lower. The 10-year note yield, a common benchmark for the 30-year fixed rate mortgage, fell ten basis points (bps) to 1.68 percent (see the benchmark chart below).
In response, secondary lenders, including Fannie Mae and Freddie Mac, lowered their required net yield (RNY) rates. The Federal Home Loan Mortgage Corp (OTC:FMCC) lowered their 30-year 60-day RNY rate nine bps to 2.75 percent. The Federal National Mortgage Association (OTC:FNMA) lowered their RNY rate two bps to 2.917 percent.
The London InterBank Offered Rate (LIBOR) fell again. The 1-year LIBOR fell one basis point to 0.866 percent while the 6-month LIBOR fell to 0.5296 percent.
Today the Federal Reserve said that seasonally adjusted consumer credit increased four percent on an annualized basis in the third quarter. Revolving credit decreased 1.5 percent while non-revolving credit increased 6.5 percent.
The average 30-year fixed rate mortgage (FRM) fell six bps to 3.418 percent (see the mortgage rate chart below). The difference between the 10-year note yield and the 30-year fixed mortgage rate expanded four bps to 1.738 percent.
The average FHA loan rate fell four bps to 3.911 percent and the average VA mortgage rate fell 10 bps to 3.603 percent.
JPMorgan Chase & Co. (NYSE:JPM) lowered their conventional 30-year rate 13 bps to 3.44 percent.
HSBC Holdings plc (ADR) (NYSE:HBC) lowered their 30-year purchase rate 13 bps to 3.63 percent. Their refinance rate fell 13 bps to 3.88 percent.
The average 15-year fixed mortgage rate fell six bps to 2.9233.
JPM lowered their 15-year rate nine points and also lowered their 20-year loan rate 14 bps.
HBC lowered their 15-year purchase rate 13 bps to 3.09 percent.
The average 5-year adjustable rate mortgage (ARM) fell one basis point to 3.059 percent.
By: John Waters
|Wednesday||1 Day||5 Day||30 Day||100-Day||100-Day|
|11/07/12||Benchmark||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.67||Bond Buyer's 20-yr bond index||0||-1||-5||-28||3.61|
|2.71||FHLMC 30 yr 30 days RNY||-9||-8||95||-20||1.59|
|2.75||FHLMC 30 yr 60 days RNY||-9||-7||90||-21||1.68|
|2.873||FNMA 30 yr 30 days RNY||-2||-4||19||-24||2.635|
|2.917||FNMA 30 yr 60 days RNY||-2||-4||20||-23||2.68|
|0.209||1 Month LIBOR Rate||0||0||-1||-3||0.208|
|0.31||3 Month LIBOR Rate||0||0||-5||-16||0.31|
|0.5295||6 Month LIBOR Rate||0||-1||-11||-21||0.5295|
|0.866||1 Year LIBOR Rate||-1||-1||-11||-20||0.866|
|2.42||20-year Bond Yield Rate *||-10||-8||-1||9||2.11|
|1.68||10-year Note Yield Rate *||-10||-7||2||4||1.43|
|0.18||1-Year Note Yield Rate *||-1||0||2||0||0.16|
|0.1||3-month Note Yield Rate *||0||1||1||1||0.08|
|1.038||11th District Cost of Funds||0||0||-6||-10||1.038|
|2.320||Difference 3-mo & 20 yr **||-10||-9||-2||8||2.01|
|1.738||Difference 10yr Note 30yr Loan||4||2||4||-32||1.641858|
|* Treasury Yields - DAILY|
|** Pos change - economy to improve soon (probit model)|
Mortgage Rate Chart:
|Best Syndication News Mortgage Survey|
|Wednesday||1 Day||5 Day||30 Day||100-Day||100-Day|
|11/07/12||National Average APR*||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.418%||Average 30 yr fixed||-6||-5||6||-28||3.31%|
|3.911%||Average 30 yr FHA||-4||-16||5||-30||3.81%|
|3.603%||Average 30-yr VA||-10||-9||-2||-31||3.60%|
|2.933%||Average 15 year FRM||-6||-9||-3||-29||2.92%|
|3.059%||Average 5/1 ARM||-1||-4||-5||-15||3.06%|
|3.849%||30 Yr Fixed Jumbo||6||-9||-13||-37||3.78%|
|3.029%||15 Yr Fixed Jumbo||-4||-5||-2||-31||3.03%|
|11/07/12||HSBC||1 Day||5 Day||30 Day||100-Day||100-Day|
|3.09%||15 Year Purchase||-13||-13||0||-26||3.09%|
|3.35%||15 Year Refinance||-13||-13||0||-13||3.35%|
|3.63%||30 Year Purchase||-13||-13||0||-38||3.50%|
|3.88%||30 Year Refinance||-13||-13||0||-25||3.75%|
|3.66%||30 Year FHA/VA Purchase||-13||-13||-13||-25||3.66%|
|3.79%||30 Year FHA/VA Refinance||-13||-13||-13||-26||3.79%|
|3.25%||30 Year CommunityWorks||-13||-13||13||-63||3.12%|
|3.33%||3/1 YR LIBOR ARM||0||0||-10||-17||3.33%|
|3.34%||5/1 YR LIBOR ARM||0||0||-8||-12||3.34%|
|11/07/12||Chase||1 Day Pt||5 Day Pt||30 Day Pt||100-Day||100-Low|
|3.44%||30-Year Fixed Rate||-13||-14||-4||-39||3.34%|
|3.34%||20-Year Fixed Rate||-14||-15||-13||-27||3.24%|
|2.90%||15-Year Fixed Rate||-9||-13||0||-34||2.79%|
|* Average includes more banks than listed|
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