(Best Syndication News) Mortgage interest rates dropped today in response to competition for U.S. government securities (see the mortgage rate charts below). PNC and the secondary lenders raised their rates; however Citigroup, Bank of America, and some other major banks went in the opposite direction.
Gas prices dropped more than seven percent in November. The average price for a gallon of gas fell to $3.30. The lower energy prices contributed to lower consumer costs, according to the Bureau of Labor Statistics.
The Core CPI (Consumer Price Index), which does not include energy and food, advanced 0.1 percent last month. But when energy and food were added to the calculation, inflation (CPI) fell 0.3 percent.
The Federal Reserve said that industrial production climbed 1.1 percent last month. Analysts were expecting a gain of just 0.5 percent. In October, industrial production fell 0.7 percent, down from an initial estimate of -0.4 percent.
Some analysts are predicting even lower gas prices next year. John Kilduff, a founding partner with Again Capital, says gas could drop to near $2.50 a gallon because of the recent production of natural gas and oil from shale drilling.
The International Energy Agency (IEA) has said the U.S.A. could be the number-one oil producer by 2020. The IEA also said that demand for oil could slow in 2013. The share price of Exxon Mobil Corporation (NYSE:XOM) suffered more than other major oil companies, down one-half percent.
The looming fiscal cliff is still weighing on traders. Over the weekend a Washington wire-report suggested that U.S. House of Representatives Speaker John Boehner signaled he would be willing to allow taxes rise to 39.6 percent for people making over $1 million annually.
According to the report, the Speaker is now waiting to see what President Barack Obama has to offer in return. Any tax increase would be a tough-sale to other Republican members of Congress who pledged not to raise taxes.
The Dow Jones Industrial Average index fell 36 points on Friday. The broader S&P 500 and tech-heavy NASDAQ Composite Index (INDEXNASDAQ:.IXIC) fell 0.41 percent and 0.70 percent respectively. The drop erased the gains made earlier in the week.
The U.S. Treasury Department data indicates that competition for bonds and notes increased. The higher prices reduced the return. The 10-year note yield fell two basis points (bps) to 1.72 percent (see the benchmark chart below).
The secondary lenders, including Fannie Mae and Freddie Mac, raised their required net yield (RNY) rates. The Federal Home Loan Mortgage Corp (OTC:FMCC) raised their 30-year 60-day RNY rate two bps to 2.87 percent. The Federal National Mortgage Association (OTC:FNMA) raised their RNY rate one point to 2.875 percent.
The London InterBank Offered Rate (LIBOR) fell slightly.
The average 30-year fixed rate mortgage (FRM) fell one basis point to 3.435 percent (see the mortgage rate chart below). The difference between the 10-year note yield and the 30-year mortgage expanded one point to 1.715 percent.
The average FHA loan rate fell to 3.927 percent and the average VA loan rate advanced to 3.697 percent.
Citigroup Inc. (NYSE:C) lowered their conventional 30-year rate one point to 3.53 percent.
PNC Financial Services (NYSE:PNC) raised their 30-year rate two bps to 3.63 percent.
The average 15-year fixed mortgage rate fell less than one point to 2.935 percent.
Citigroup lowered their rate one point to 3.045 percent.
PNC raised their rate two bps to 2.85 percent. The lender also raised their 20-year rate three bps to 3.51 percent.
The average 5-year adjustable rate mortgage (ARM) fell one point to 3.045 percent.
Jumbo loans advanced. The 30-year jumbo mortgage climbed to 3.830 percent.
By: John Waters
|Friday||1 Day||5 Day||30 Day||100-Day||100-Day|
|12/14/12||Benchmark||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.27||Bond Buyer's 20-yr bond index||0||-2||-41||-48||3.27|
|2.83||FHLMC 30 yr 30 days RNY||0||11||5||12||1.59|
|2.87||FHLMC 30 yr 60 days RNY||2||12||5||11||1.68|
|2.848||FNMA 30 yr 30 days RNY||1||2||-7||1||2.635|
|2.875||FNMA 30 yr 60 days RNY||1||3||-9||1||2.68|
|0.209||1 Month LIBOR Rate||0||0||0||-4||0.2075|
|0.308||3 Month LIBOR Rate||0||0||0||-14||0.308|
|0.511||6 Month LIBOR Rate||0||-1||-3||-21||0.511|
|0.844||1 Year LIBOR Rate||0||-1||-3||-22||0.844|
|2.46||20-year Bond Yield Rate *||-3||8||-5||33||2.13|
|1.72||10-year Note Yield Rate *||-2||9||-3||27||1.45|
|0.13||1-Year Note Yield Rate *||-1||-5||-6||-5||0.13|
|0.04||3-month Note Yield Rate *||-2||-5||-5||-6||0.04|
|1.011||11th District Cost of Funds||0||0||-3||-11||1.011|
|2.420||Difference 3-mo & 20 yr **||-1||13||0||39||2.03|
|1.715||Difference 10yr Note 30yr Loan||1||-4||-3||-40||1.641858|
|* Treasury Yields - DAILY|
|** Pos change - economy to improve soon (probit model)|
Mortgage Rate Chart:
|Best Syndication News Mortgage Survey|
|Friday||1 Day||5 Day||30 Day||100-Day||100-Day|
|12/14/12||National Average APR*||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.435%||Average 30 yr fixed||-1||5||-6||-13||3.31%|
|3.927%||Average 30 yr FHA||0||1||-2||-6||3.81%|
|3.697%||Average 30-yr VA||0||1||0||-7||3.60%|
|2.935%||Average 15 year FRM||0||-1||-10||-20||2.92%|
|3.045%||Average 5/1 ARM||-1||-2||-5||-10||3.04%|
|3.830%||30 Yr Fixed Jumbo||0||3||-10||-29||3.78%|
|3.022%||15 Yr Fixed Jumbo||1||0||-10||-19||2.97%|
|12/14/12||Citi Financial||1 Day||5 Day||30 Day||100-Day||100-Low|
|3.53%||30 Year Fixed||-1||8||11||-17||3.32%|
|2.95%||15 Year Fixed||-2||-4||2||-25||2.81%|
|12/14/12||PNC - National City Bank||1 Day||5 Day||30 Day||100-Day||100-Low|
|2.77%||10 Year Fixed||3||3||0||13||2.44%|
|2.85%||15 Year Fixed||2||2||0||4||2.48%|
|3.51%||20 Year Fixed||3||3||1||14||3.14%|
|3.63%||30 Year Fixed||2||2||-11||3||3.33%|
|2.94%||10 Year Fixed||10||10||0||25||2.44%|
|3.03%||15 Year Fixed||11||0||-2||11||2.49%|
|3.83%||20 Year Fixed||3||3||1||24||3.15%|
|3.98%||30 Year Fixed||1||1||-2||13||3.35%|
|* 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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