(Best Syndication News) Mortgage interest rates were higher today as lenders adjusted to the secondary lending markets (see the mortgage rate charts below). SunTrust lowered their rate while Bank of America, KeyBank, and Citibank raised them.
Investor concerns centered on the Greek debt crisis last year, but as the New Year approached the focused moved to the fiscal cliff in the United States. Stock prices were hinged on comments made by President Barack Obama New Year’s Eve and later the Senate was able to negotiate a deal to avert the fiscal cliff.
The optimism pushed the Dow Jones Industrial Average (DJIA) index up 166 points. Although the blue-chips were up 1.28 percent, the tech-heavy NASDAQ and the S&P 500 gained even more, up 2.00 percent and 1.69 percent respectively.
The Democratic controlled Senate was able to push through a late-night measure that would raise taxes on those making over $400,000 ($450,000 on couples). The bill will also extend long-term unemployment benefits and prevent the rise in milk prices. The compromise made between U.S. Vice President Joe Biden and Senate leaders was kicked around the House on New Year’s Day.
House of Representatives Republicans already balked at a plan presented by Speaker John Boehner. On Tuesday House Republicans held closed-door hearings to discuss the Senate proposal.
Late Tuesday the House of Representatives passed the Senate bill avoiding austerity measures on the middle class. The legislation also postpones a debate on spending cuts and the debt limit. The vote was 256 in favor of passage and 167 opposed. There were 151 Republican “no” votes.
The high-hopes provided confidence for Monday’s stock rally. Money flowed into equities and away from government bonds and notes. Government security prices dropped pushing yields higher. The 10-year note yield, a common benchmark for the 30-year fixed rate mortgage (FRM), jumped five basis points (bps) to 1.78 percent (see the benchmark chart below).
Secondary lenders were mixed. Freddie Mac increased their required net yield (RNY) rates while Fannie Mae lowered them. The Federal Home Loan Mortgage Corp (OTC:FMCC) raised their 30-year 60-day RNY rate two bps while the Federal National Mortgage Association (OTC:FNMA) lowered it two bps.
The London InterBank Offered Rate (LIBOR) was unchanged or lower. The 1-year and 6-month LIBOR rates were unchanged.
The average 30-year FRM advanced one basis point to 3.428 percent (see the mortgage rate chart below). The difference between the 10-year note yield and the 30-year mortgage tightened four bps to 1.648 percent.
The average FHA loan rate rose less than one point but the average VA mortgage rate added five bps.
Citigroup Inc. (NYSE:C) raised their conventional rate eight bps to 3.53 percent.
Bank of America Corp (NYSE:BAC) raised their rate three bps to 3.54 percent.
The average 15-year fixed mortgage rate advanced less than one point to 2.932 percent.
Citigroup didn’t change their 15-year rate, however BAC raised it four bps to 2.88 percent.
The average 5-year adjustable rate mortgage (ARM) fell less than one point to 3.050 percent.
By: John Waters
|Monday||1 Day||5 Day||30 Day||100-Day||100-Day|
|12/31/12||Benchmark||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.64||Bond Buyer's 20-yr bond index||0||20||9||-2||3.27|
|2.83||FHLMC 30 yr 30 days RNY||2||1||17||14||1.59|
|2.87||FHLMC 30 yr 60 days RNY||2||1||17||12||1.68|
|2.847||FNMA 30 yr 30 days RNY||-2||-2||4||-11||2.635|
|2.876||FNMA 30 yr 60 days RNY||-2||-2||4||-14||2.68|
|0.2087||1 Month LIBOR Rate||0||0||0||-3||0.2075|
|0.306||3 Month LIBOR Rate||0||0||-1||-13||0.306|
|0.50825||6 Month LIBOR Rate||0||0||-2||-21||0.50825|
|0.8435||1 Year LIBOR Rate||0||0||-2||-20||0.8425|
|2.54||20-year Bond Yield Rate *||7||1||23||14||2.29|
|1.78||10-year Note Yield Rate *||5||-1||20||9||1.57|
|0.16||1-Year Note Yield Rate *||1||0||0||-4||0.13|
|0.05||3-month Note Yield Rate *||4||-1||-1||-6||0.01|
|1||11th District Cost of Funds||-1||-1||-4||-12||1|
|2.490||Difference 3-mo & 20 yr **||3||2||24||20||2.2|
|1.648||Difference 10yr Note 30yr Loan||-4||0||-19||-35||1.632492|
|* Treasury Yields - DAILY|
|** Pos change - economy to improve soon (probit model)|
Mortgage Rate Chart:
|Best Syndication News Mortgage Survey|
|Monday||1 Day||5 Day||30 Day||100-Day||100-Day|
|12/31/12||National Average APR*||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.428%||Average 30 yr fixed||1||-1||1||-26||3.31%|
|3.928%||Average 30 yr FHA||0||0||-1||-16||3.81%|
|3.698%||Average 30-yr VA||5||0||0||-19||3.60%|
|2.932%||Average 15 year FRM||0||-1||-1||-21||2.92%|
|3.050%||Average 5/1 ARM||0||-1||-3||-12||3.04%|
|3.878%||30 Yr Fixed Jumbo||0||-6||4||-31||3.78%|
|3.039%||15 Yr Fixed Jumbo||0||-4||2||-19||2.97%|
|12/31/12||Citi Financial||1 Day||5 Day||30 Day||100-Day||100-Low|
|3.53%||30 Year Fixed||8||0||13||-40||3.32%|
|2.94%||15 Year Fixed||0||-4||11||-36||2.81%|
|12/31/12||Bank of America||1 Day Pt||5 Day Pt||30 Day||100-Day||100-Low|
|3.54%||30-Year Fixed Rate||3||0||5||-23||3.37%|
|3.00%||5/1 ARM Rate||0||-2||-9||-17||2.97%|
|3.42%||30-Year Fixed Rate||0||0||-1||-34||3.40%|
|2.88%||15-Year Fixed Rate||0||0||-1||-18||2.83%|
|* 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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