Mortgage rates this week

PREMIER MORTGAGE GROUP WEEKLY MARKET UPDATE: OCTOBER 12, 2012
RATES FLAT ON LIMITED ECONOMIC DATA
Today's Rates
October 12, 2012
PRODUCT 0 pts w/pts
30 Yr Fixed 3.25% 3.125%
+0.75pt
FHA 30 Yr Fixed 3.125% 2.875%
+1pt
5 Yr ARM 2.625% 2.375%
+1.0pt
7 Yr ARM 2.75% 2.5%
+1.0pt
5 Yr Jumbo ARM* (purchase loans) 2.875% 2.5%
+0.9pt
7 Yr Jumbo ARM* 3.125% 2.75%
+1.0pt
* Up to $1.5 million
– – – – –
This information is for real estate professionals only and is not intended for distribution to consumers.
– – – – –
Rates fluctuate and are always subject to credit approval. These rates are based on FICO scores of 740 and greater and loan amounts of at least $200k.
– – – – –
Conforming ARM’s assume 25% down payment.
– – – – –
All loans assume no origination fee.

As my valued business partner, I want to keep you informed with the latest news. Feel free to contact me for more details!

Jessie Thompson
Jessie Thompson
Certified Mortgage Planning Specialist
303.302.3840 direct
303.449.4455 fax
jthompson@pmglending.com
www.jessiethompson.com
Straight Stats
Mortgage interest rates were mostly flat week over week without much new economic data for markets to digest. Economic data of note included the Fed Beige Book, which reported modest expansion in the 12 Fed districts. Weekly jobless claims fell to its lowest level since February 2008 although it appears that one large state did not report its claims. The trade deficit in August increased on lower demand for exports. The September Producer Price Index increased more than expected, largely driven by higher fuel prices. Excluding food and energy prices, the core PPI index was unchanged in September and up just 2.3% year over year. The year over year increase is the smallest increase since June of last year. The University of Michigan Consumer Sentiment Index jumped to 83.1 on expectations of 78.5. In Europe, Spain’s credit rating was cut to just one level above junk status.
Commentary
Financial markets are surprisingly stable, especially credit markets. Following the Fed’s September QE3 announcement of open-ended intent to buy mortgage-backed securities, the 10-year T-note left to the mercy of markets, 10s have not traded above 1.75% or below 1.50%. Meanwhile, 30-fixed mortgages have broken as low as 3.25%. That spread — 10s/MBS roughly 1.60% — is the lowest/tightest since previous normality hit the wall in 2007. I had thought that Mortgage Absolute Zero was about 3.00%, but if the Fed buys MBS for long enough to work off presently infinite refinance demand (many months, maybe EOY 2013), retail mortgage prices can fall below the 3.00% barrier just by more compression of spread. Today, the main thing holding rates above 3.00% is the profiteering of big banks, increasing their margins as the Fed tries to shrink them. The worst of the piracy: jacking margins on refis of underwater households. I would say, “Shame,” but to no effect on bank boards and executive suites ethically un-reformed through this whole process. All the new rules in the world cannot substitute for a sense of citizenship.
Key Measures

CURRENT
LAST WEEK
Dow Jones Ind. Avg.
13,328.85
13,632.67
10 year U.S. Treasury
1.664
1.717
WSJ Prime Rate
3.25
3.25
1 year LIBOR
0.94150
0.95650
Next Week's Indicators

RELEASE DAY
Consumer Price Index
Tuesday
Housing Starts
Wednesday
Jobless Claims
Thursday
Existing Home Sales
Friday
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