(Best Syndication News) Fiscal optimism brought investors back into equities Wednesday providing breather-room for secondary and primary lenders (see the mortgage rate charts below). Mortgage interest rates were mostly higher, with SunTrust, Bank of America, JPMorgan Chase, and Citibank among the lenders making changes.
A last-minute vote in Congress brought assurances to Wall Street investors t; automatic spending and tax cuts have been postponed. Stock markets in the United States skyrocketed despite some lingering issues that were put on the back-burner until February or March.
Americans earning less than $400,000 per year ($450,000 per couple) should not see their income taxes rise in 2013. Social Security payroll taxes, which were cut several years ago, will go up on most taxpayers. The withholding tax (OASDI) has been 4.2 percent over the last two years, but this tax will return to 6.2 percent.
Lawmakers didn’t solve the debt ceiling limit and sequestration issues but there will not be any immediate cuts to defense or other programs. The Dow Jones Industrial Average (DJIA) index soared 308 points. That is largest jump since 2011. The S&P 500 gained 2.54 percent and the NASDAQ gained 3.07 percent.
The exuberance prompted a migration from U.S. securities. The U.S. Treasury Department said that bond and note yields increased. The 10-year note yield climbed eight basis points (bps) in one day hitting 1.86 percent (see the benchmark chart below).
The Federal Home Loan Mortgage Corp (OTC:FMCC) didn’t change their require net yield (RNY) rates. The Federal National Mortgage Association (OTC:FNMA) raised their 30-year 60-day RNY rate six bps to 2.936 percent.
The London InterBank Offered Rate (LIBOR) slipped slightly. The 6-month LIBOR fell to 0.50625 percent and the 1-year LIBOR fell to 0.8425 percent.
All of the stock sectors were higher. The technology sector led the way, up more than three percent. The capital goods sector gained 2.71 percent.
Most of the stocks in the construction services sub-sector were winners. The share price of the PulteGroup, Inc. (NYSE:PHM), the most actively trading stock in the sub-sector, advanced more than two percent, despite a decrease in construction spending. The U.S. Department of Commerce reported today that construction spending in November fell 0.3 percent. Economists expected and increase of 0.5 percent.
Low mortgage rates and the prospect of low interest rates throughout 2013 helped the construction firms. Another homebuilder benefiting from higher home prices and sales was the Lennar Corporation (NYSE:LEN), up more than three percent.
The average 30-year fixed rate mortgage gained three bps to 3.455 percent (see the mortgage rate chart below). The difference between the 10-year note yield and the 30-year mortgage expanded six bps to 2.550 percent.
The average FHA loan rate jumped one point to 3.938 percent while the average VA loan rate was unchanged.
SunTrust Banks, Inc. (NYSE:STI) raised their conventional rate five bps to 3.53 percent. The lender also raised their FHA mortgage rate four points to 4.35 percent.
JPMorgan Chase & Co. (NYSE:JPM) raised their 30-year rate 11 bps to 3.58 percent.
The average 15-year fixed rate mortgage (FRM) advanced three bps to 2.958 percent.
JPM raised their 15-year rate seven bps but also increased their 20-year mortgage rate four bps to 3.38 percent.
STI raised their 15-year rate three bps to 2.92 percent.
The average 5-year adjustable rate mortgage (ARM) climbed one point to 3.057 percent.
By: John Waters
|Wednesday||1 Day||5 Day||30 Day||100-Day||100-Day|
|01/02/13||Benchmark||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.58||Bond Buyer's 20-yr bond index||-6||-6||3||-8||3.27|
|2.83||FHLMC 30 yr 30 days RNY||0||4||17||11||1.59|
|2.87||FHLMC 30 yr 60 days RNY||0||4||17||8||1.68|
|2.907||FNMA 30 yr 30 days RNY||6||4||11||-4||2.635|
|2.936||FNMA 30 yr 60 days RNY||6||4||11||-6||2.68|
|0.2077||1 Month LIBOR Rate||0||0||0||-3||0.2075|
|0.305||3 Month LIBOR Rate||0||-1||-1||-13||0.305|
|0.50625||6 Month LIBOR Rate||0||0||-2||-21||0.50625|
|0.8425||1 Year LIBOR Rate||0||0||-2||-20||0.8425|
|2.63||20-year Bond Yield Rate *||9||11||29||26||2.29|
|1.86||10-year Note Yield Rate *||8||9||25||21||1.57|
|0.15||1-Year Note Yield Rate *||-1||-1||-1||-3||0.13|
|0.08||3-month Note Yield Rate *||3||-1||-1||-2||0.01|
|1||11th District Cost of Funds||0||-1||-4||-12||1|
|2.550||Difference 3-mo & 20 yr **||6||12||30||28||2.2|
|1.595||Difference 10yr Note 30yr Loan||-5||-9||-22||-40||1.595169|
|* 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|
|01/02/13||National Average APR*||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.455%||Average 30 yr fixed||3||0||3||-19||3.31%|
|3.938%||Average 30 yr FHA||1||1||0||-15||3.81%|
|3.698%||Average 30-yr VA||0||0||0||-19||3.60%|
|2.958%||Average 15 year FRM||3||1||1||-16||2.92%|
|3.057%||Average 5/1 ARM||1||-1||0||-10||3.04%|
|3.929%||30 Yr Fixed Jumbo||5||1||13||-28||3.78%|
|3.123%||15 Yr Fixed Jumbo||8||4||11||-10||2.97%|
|01/02/13||Sun Trust Bank||1 Day||5 Day||30 Day||100-Day||100-Low|
|3.53%||30 Yr Fixed Conventional||5||1||0||-46||3.43%|
|2.92%||15 Yr Fixed Conventional||4||2||-2||-40||2.79%|
|4.09%||30 Yr Jumbo Fixed||8||-1||9||-39||3.53%|
|2.94%||Agency 5/1 ARM 30 Yr||0||0||2||-24||2.42%|
|2.96%||Agency 7/1 ARM 30 Yr||1||0||5||-23||2.87%|
|4.35%||30 Yr FHA - Fixed||4||4||1||2||4.05%|
|01/02/13||Chase||1 Day Pt||5 Day Pt||30 Day||100-Day||100-Low|
|3.58%||30-Year Fixed Rate||11||1||14||-5||3.32%|
|3.38%||20-Year Fixed Rate||4||1||11||-14||3.23%|
|3.01%||15-Year Fixed Rate||7||2||11||2||2.79%|
|* Average includes more banks than listed|
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