(Best Syndication News) Mortgage interest rates advanced slightly today as lenders adjusted to the declining equity markets (see the mortgage rate charts below). SunTrust, Citibank, and Bank of America lowered their loan rates while JPMorgan Chase and U.S. Bank raised them.
Equity markets continued to slide as investors began to accommodate the prospect of a fiscal cliff. The Standard and Poor’s rating agency put the odds of going off the fiscal cliff at 15 percent while the Congressional Budget Office (CBO) said if lawmakers fail to extend the debt ceiling the economy could be driven into recession.
Unemployment could exceed nine percent if the fiscal cliff is triggered, according to S&P and the budget office. The S&P comments came in the last 30 minutes of trading ensuring another down-day for traders. Analysts expect a rally once the fiscal-cliff issues are solved.
The European Central Bank (ECB) and the Bank of England held their rates steady. Mario Draghi, the ECB President, said that the European debt problems have gotten better but have not gone away.
All of the sectors were lower; however the energy sector was especially hard hit. Exxon Mobil Corporation (NYSE:XOM) dropped more than one percent during the trading day. Both crude oil and gold prices were higher despite a two-day losing streak in equities. In the after-hours XOM added eleven cents to $87.18.
Despite a positive upswing on Tuesday, the regional bank sector is down more than three percent in five days. Not all regional banks were losers. Northern California based Heritage Commerce Corp. (NASDAQ:HTBK) jumped more than two percent Thursday.
The service sector also stumbled, down more than two percent on the week. Coach, Inc. (NYSE:COH) dropped more than five percent during Thursday’s session. COH has been helped by stores in China, however a new set of Chinese leaders are expected to be announced over the next several days. The stock gained nine cents to $54.00 in the after-hours. Kohl's Corporation (NYSE:KSS) had better-than-expected earnings; however their holiday sales forecasts were below expectations. KSS dropped five percent on Thursday.
The Labor Department said that there were 355,000 initial jobless claims last week. This is down from 363,000 the previous week and below analyst expectations of 370,000. The better-than-expected news didn’t help equities much.
Stocks shot higher early, but descended throughout the day. The Dow Jones Industrial Average (DJIA) index fell 121 points while the broader S&P 500 and the tech-heavy NASDAQ slipped 1.22 percent and 1.42 percent respectively.
There was increased competition for bonds and notes driving prices higher and yields lower. The 10-year note yield fell six basis points (bps) to 1.62 percent (see the benchmark chart below).
Secondary lenders lowered their required net yield (RNY) rates in response to the shifting capital markets. The Federal Home Loan Mortgage Corp (OTC:FMCC) lowered their 30-year 60-day RNY rate seven bps to 2.68 percent. The Federal National Mortgage Association
(OTC:FNMA) RNY rate fell one point to 2.907 percent.
The London InterBank Offered Rate (LIBOR) was also lower. The 6-month LIBOR fell to 0.5265 percent and the 1-year LIBOR fell to 0.862 percent.
The average 30-year fixed rate mortgage (FRM) advanced to 3.421 percent (see mortgage rate chart below). The difference between the 10-year note yield and the 30-year mortgage expanded six bps to 1.801 percent.
The average FHA loan rate advanced two bps to 3.929 percent and the average VA mortgage rate climbed nine bps to 3.689 percent.
U.S. Bancorp (NYSE:USB) raised their conventional 30-year rate two bps to 3.57 percent.
SunTrust Banks, Inc. (NYSE:STI) lowered their rate eight bps to 3.52 percent.
The average 15-year fixed rate mortgage climbed slightly to 2.933 percent.
USB raised their 15-year rate four bps but also raised their 20-year rate three bps.
STI lifted their 15-year rate five bps to 2.94 percent.
The average 5-year adjustable rate mortgage (ARM) advanced one basis point to 3.072 percent.
The average 30-year jumbo mortgage rate fell one basis point to 3.841 percent.
Although USB held their jumbo mortgage rates unchanged, STI lowered their jumbo rate to 3.99 percent.
By: John Waters
|Thursday||1 Day||5 Day||30 Day||100-Day||100-Day|
|11/08/12||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|
|2.64||FHLMC 30 yr 30 days RNY||-7||-14||77||-33||1.59|
|2.68||FHLMC 30 yr 60 days RNY||-7||-14||73||-34||1.68|
|2.863||FNMA 30 yr 30 days RNY||-1||-6||18||-27||2.635|
|2.907||FNMA 30 yr 60 days RNY||-1||-6||19||-26||2.68|
|0.209||1 Month LIBOR Rate||0||0||-1||-4||0.208|
|0.31||3 Month LIBOR Rate||0||0||-5||-16||0.31|
|0.5265||6 Month LIBOR Rate||0||-1||-11||-21||0.5265|
|0.862||1 Year LIBOR Rate||0||-1||-11||-21||0.862|
|2.35||20-year Bond Yield Rate *||-7||-16||-7||1||2.11|
|1.62||10-year Note Yield Rate *||-6||-13||-3||-3||1.43|
|0.2||1-Year Note Yield Rate *||2||1||3||0||0.16|
|0.1||3-month Note Yield Rate *||0||1||0||1||0.08|
|1.038||11th District Cost of Funds||0||0||-3||-10||1.038|
|2.250||Difference 3-mo & 20 yr **||-7||-17||-7||0||2.01|
|1.801||Difference 10yr Note 30yr Loan||6||6||10||-26||1.641858|
|* Treasury Yields - DAILY|
|** Pos change - economy to improve soon (probit model)|
Mortgage Rate Chart:
|Best Syndication News Mortgage Survey|
|Thursday||1 Day||5 Day||30 Day||100-Day||100-Day|
|11/08/12||National Average APR*||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.421%||Average 30 yr fixed||0||-7||7||-29||3.31%|
|3.929%||Average 30 yr FHA||2||-2||7||-32||3.81%|
|3.689%||Average 30-yr VA||9||-1||4||-23||3.60%|
|2.933%||Average 15 year FRM||0||-10||-8||-33||2.92%|
|3.072%||Average 5/1 ARM||1||-3||-7||-11||3.06%|
|3.841%||30 Yr Fixed Jumbo||-1||-9||-14||-41||3.78%|
|3.026%||15 Yr Fixed Jumbo||0||-9||-2||-35||3.03%|
|11/08/12||U.S. Bank||1 Day||5 Day||30 Day||100-Day||100-Low|
|11/08/12||Sun Trust Bank||1 Day||5 Day||30 Day||100-Day||100-Low|
|3.52%||30 Yr Fixed Conventional||-8||-14||0||-50||3.49%|
|2.94%||15 Yr Fixed Conventional||5||-5||3||-76||2.79%|
|3.99%||30 Yr Jumbo Fixed||0||-10||-11||-37||3.53%|
|2.91%||Agency 5/1 ARM 30 Yr||0||0||-9||-43||2.42%|
|2.89%||Agency 7/1 ARM 30 Yr||2||-1||-11||-43||2.87%|
|4.34%||30 Yr FHA - Fixed||-3||-6||26||-32||4.05%|
|* Average includes more banks than listed|
Important: The material on Best Syndication is for informational purposes only and is not meant to be advice. Authors may have or will receive monetary compensation from the company's product/s mentioned. You should always seek professional advice before making any legal, financial or medical decisions and this website cannot substitute or replace any trained professional consultation.
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