(Best Syndication News) A drop in secondary yields pushed mortgage rates lower today after weak manufacturing numbers were released by the Federal Reserve (see the mortgage rate charts below). Nearly all of the major banks, including JPMorgan Chase, KeyBank, HSBC, and Bank of America, lowered their mortgage loan rates.
Stock markets in the United States opened lower Tuesday after disappointing economic news put pressure on the major indexes. There was a pull-back on stock prices early in the morning but by the closing bell there was a reprieve.
The Federal Reserve Bank of New York said that conditions for manufactures declined in January. They called the pace of decline “modest,” but their index hit negative territory for the sixth straight month. Analysts were looking for an increase, but the survey indicated a decline of 0.7 percent.
The U.S. Department of Labor said their producer price index (PPI) declined 0.2 percent in December. Economists were hoping to see a flat line for the month.
Both economic indicators soured the equity markets. The Dow Jones Industrial Average (INDEXDJX:.DJI) quickly dropped nearly four-tenths of a percent before ending the day up 27 points. The S&P 500 nearly mirrored the DJI throughout the day, closing up 0.11 percent.
The NASDAQ Composite (INDEXNASDAQ:.IXIC) index never fully recovered. The tech-heavy NASDAQ was weighed down by a drop in Apple Inc. (NASDAQ:AAPL). The share price slipped more than $200 from its $700 high in mid September. The stock slipped another $16 after it was reported that vendors for the iPhone – Apple’s flagship product – are shipping fewer components to the company.
There was some good economic news. Retail sales increased 0.5 percent in December, according to the Commerce Department. This beat expectations.
U.S. Treasury Department data indicated that money flowed into government bonds and notes. The 10-year note yield fell three basis points (bps) to 1.86 percent (see the benchmark chart below).
The 20-year Bond Buyer’s index fell eight bps to 3.6 percent.
Secondary lenders lowered their required net yield (RNY) rates. The Federal Home Loan Mortgage Corp (OTC:FMCC) lowered their 30-year 60-day RNY rate three bps while the Federal National Mortgage Association (OTC:FNMA) lowered their rate one basis point.
The London InterBank Offered Rate (LIBOR) was mostly lower.
The nation’s third-largest homebuilder reported better-than-expected profits last quarter. Lennar Corporation (NYSE:LEN) earned three-times what it earned last year. This could be another sign that the real estate market is beginning to rebound.
The average 30-year fixed rate mortgage (FRM) slipped three bps to 3.471 percent (see the mortgage rate chart below). The difference between the 10-year note yield and the 30-year mortgage expanded less than one point to 1.611 percent.
The average FHA loan rate advanced three bps while the average VA loan rate fell one basis point.
KeyCorp (NYSE:KEY) lowered their conventional rate three bps to 3.59 percent. The lender also lowered their FHA and VA mortgage rates.
HSBC Holdings plc (ADR) (NYSE:HBC) lowered their purchase and refinance rates 13 bps. The bank also adjusted their 30-year CommunityWorks loans down 13 bps.
The average 15-year fixed mortgage rate fell one basis point to 2.956 percent.
KEY lowered their 15-year rate two bps to 2.92 percent and HBC lowered their 15-year rate 13 bps.
The average 5-year adjustable rate mortgage (ARM) advanced less than one point to 3.078 percent. This loan product typically has a 30-year term but the interest rates readjusts after five years.
By: John Waters
|Tuesday||1 Day||5 Day||30 Day||100-Day||100-Day|
|01/15/13||Benchmark||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.6||Bond Buyer's 20-yr bond index||-8||-8||23||-20||3.27|
|2.83||FHLMC 30 yr 30 days RNY||-2||-3||16||10||1.59|
|2.86||FHLMC 30 yr 60 days RNY||-3||-4||15||8||1.68|
|2.872||FNMA 30 yr 30 days RNY||-1||-8||8||-14||2.635|
|2.902||FNMA 30 yr 60 days RNY||-1||-7||8||-15||2.68|
|0.2057||1 Month LIBOR Rate||0||0||-1||-3||0.2057|
|0.303||3 Month LIBOR Rate||0||0||-1||-12||0.303|
|0.49||6 Month LIBOR Rate||0||-1||-4||-22||0.49|
|0.814||1 Year LIBOR Rate||-1||-2||-5||-23||0.814|
|2.62||20-year Note Yield Rate *||-3||-3||25||21||2.29|
|1.86||10-year Note Yield Rate *||-3||-2||23||18||1.57|
|0.14||1-Year Note Yield Rate *||0||1||-4||-5||0.13|
|0.09||3-month Note Yield Rate *||1||3||-1||-2||0.01|
|1||11th District Cost of Funds||0||0||-1||-12||1|
|2.530||Difference 3-mo & 20 yr **||-4||-6||26||23||2.2|
|1.611||Difference 10yr Note 30yr Loan||0||-3||-16||-39||1.573746|
|* Treasury Yields - DAILY|
|** Pos change - economy to improve soon (probit model)|
Mortgage Rate Chart:
|Best Syndication News Mortgage Survey|
|Tuesday||1 Day||5 Day||30 Day||100-Day||100-Day|
|01/15/13||National Average APR*||Point Ch.||Point Ch.||Point Ch.||Point Ch.||Low|
|3.471%||Average 30 yr fixed||-3||-5||7||-21||3.31%|
|3.969%||Average 30 yr FHA||3||3||5||-23||3.81%|
|3.780%||Average 30-yr VA||-1||4||9||-13||3.60%|
|2.956%||Average 15 year FRM||-1||-1||0||-15||2.92%|
|3.078%||Average 5/1 ARM||0||1||0||-3||3.04%|
|3.932%||30 Yr Fixed Jumbo||0||0||9||-28||3.78%|
|3.136%||15 Yr Fixed Jumbo||0||1||7||-13||2.97%|
|01/15/13||HSBC||1 Day||5 Day||30 Day||100-Day||100-Day|
|2.97%||15 Year Purchase||-13||-13||-13||-25||2.97%|
|3.22%||15 Year Refinance||-13||-13||-13||-26||3.22%|
|3.63%||30 Year Purchase||-13||-13||0||-25||3.50%|
|3.88%||30 Year Refinance||-13||-13||0||-25||3.75%|
|3.79%||30 Year FHA/VA Purchase||0||0||0||-13||3.66%|
|3.92%||30 Year FHA/VA Refinance||0||0||0||-13||3.79%|
|3.37%||30 Year CommunityWorks||-13||-13||13||0||3.12%|
|3.33%||3/1 YR LIBOR ARM||0||0||0||-7||3.33%|
|3.34%||5/1 YR LIBOR ARM||0||0||0||-4||3.34%|
|01/15/13||Key Bank||1 Day Pt||5 Day Pt||30 Day||100-Day||100-Low|
|3.59%||30-yr Fixed Rate||-3||-2||8||-26||3.45%|
|2.92%||15-yr Fixed Rate||-2||4||-5||-26||2.87%|
|Adjustable Rate Mortgage|
|* Average includes more banks than listed|
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