Guest Post – Tradition Mortgage’s Weekly Update October 12, 2015
Stock Rally Pushes Rates Up
Investors large and small typically seek the relative safety of the bond market (including mortgage bonds) during times of uncertainty. Rates over the last month have benefited from this “flight to safety” of capital as stocks have been sold in favor of bonds. During the second half of September, stocks declined and mortgage rates improved. The trend reversed last week on renewed optimism in the resilient US economy. The Dow has climbed about 600 points over the past week, while mortgage rates have risen.
The Fed meeting minutes last week were a non-factor for rates. There were no major surprises in the Minutes from the September 17 Fed meeting released on Thursday. The Minutes revealed that Fed officials held off on a rate hike due to uncertainty that inflation will rise to their 2.0% target level and increased downside risk for economic growth in the U.S. since their last September 17 Fed meeting. Most investors are now projecting no rate hike until further into 2016.
Factors: Retail Sales will be released on Wednesday. Retail Sales account for about 70% of economic activity. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday.
Today’s rate snapshot: 30-day lock rates as of 10/12/2015 10:53 AM:
30-year Fixed (conforming): 3.75% (3.875%APR*) same as last week
15-year fixed (conforming): 3.00% (3.125% APR*) same as last week
7-year ARM (conforming) 3.25% (3.375% APR*) .125 higher
30-year Fixed (jumbo) 3.75% (3.875% APR**) .125 lower
*Based on 70% LTV, primary residence, rate and term refinance and purchase, 175k minimum loan size, 30-day lock. Rates subject to change at any time based on bond market pricing fluctuations. **Minimum loan size for a jumbo loan is $418,000. This information is intended for professional reference only, and not intended for consumer use. Additional qualifications and disclosures apply.
Have a great week!
NMLS # 761955
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489
Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 / www.TraditionWest.com