Mortgage Rates Dropping Again This Week – Home Buyers Taking Advantage

Graph of 10-year Notes

(Best Syndication News) Mortgage interest rates decreased again last week as application volume continued to rise (see the mortgage rate charts below). The low rate has prompted an increase in refinancing and home buying.

Last week the national average rate dropped 13 basis points (bps), but on Monday that conventional mortgage rate dropped another three bps to 4.207 percent. The average FHA rate slipped 15 bps while the average VA loan rate dropped 13 bps. This followed a 50+ point upward trend over the last 100 days.

The Mortgage Bankers Association (MBA) said that refinance applications on an unadjusted basis were up 18 percent last week. New loan applications were up just 3 percent, but the MBA reported that total mortgage loan application volume increased 11.2 percent on a seasonally adjusted basis from one week earlier.

Stocks pulled-back three straight days after a run-up earlier. Investors reacted positively after the Federal Reserve announced they would continue their bond-buying program. The Dow Jones Industrial Average jumped to a new high but slowly lost steam on Thursday and Friday. The trend continued on Monday.

Money has been shifting to the safe-havens. This drove the price of the 10-year note higher while decreasing the yield. The 10-year note yield fell three bps on Monday, hitting 2.72 percent, according to the U.S. Treasury Department. Bankers and investors use this benchmark to determine mortgage rates and value of mortgage backed securities.

The London InterBank Offered Rate (LIBOR), a common index used for adjustable rate mortgages (ARMS), also dropped. The 6-month LIBOR fell to 0.3725 percent and the 1-year LIBOR fell to 0.6376 percent.

SunTrust Banks, Inc. (NYSE:STI) lowered their fixed conventional rate nine points while PNC Financial Services Group Inc (NYSE:PNC) reduced their cost just one basis point. Last week JPMorgan Chase & Co (NYSE:JPM) dropped their non-FHA rate 13 bps. Bank of American (BAC) bucked the trend and raised their rate on Monday.

Although the Fed held-off tapering their bond-buying program for now, analysts expect a taper later in the year if the economy improves. If that occurs, economists believe interest rates could rise.

By: John Waters
Business Reporter

Mortgage Rate Chart:

Best Syndication News Mortgage Survey
Monday 1 Day 5 Day 30 Day 100-Day 100-Day
09/23/13 National Average APR* Point Ch. Point Ch. Point Ch. Point Ch. Low
4.207% Average 30 yr fixed -3 -13 -1 76 3.45%
4.741% Average 30 yr FHA -1 -15 4 82 3.69%
4.127% Average 30-yr VA 0 -13 -5 56 3.56%
3.418% Average 15 year FRM -1 -10 1 62 2.80%
3.178% Average 5/1 ARM -1 -3 -2 26 2.88%
4.493% 30 Yr Fixed Jumbo -6 -11 6 71 3.77%
3.703% 15 Yr Fixed Jumbo -9 -17 3 75 2.94%
4.24% 30-Year Fixed -13 -13 -13 38 3.86%
2.85% 5-Year ARM -4 -9 -13 -4 2.85%
09/23/13 Sun Trust Bank 1 Day 5 Day 30 Day 100-Day 100-Low
4.42% 30 Yr Fixed Conventional -9 -17 -11 91 3.49%
3.49% 15 Yr Fixed Conventional -2 -8 -8 67 2.75%
4.80% 30 Yr Jumbo Fixed 0 -10 22 91 3.73%
3.10% Agency 5/1 ARM 30 Yr 1 -1 -6 21 2.40%
3.40% Agency 7/1 ARM 30 Yr 0 -2 -2 52 2.49%
5.67% 30 Yr FHA - Fixed -6 -25 -26 122 3.20%
09/23/13 PNC - National City Bank 1 Day 5 Day 30 Day 100-Day 100-Low
3.39% 10 Year Fixed -3 -13 7 62 2.74%
3.52% 15 Year Fixed 3 -7 7 74 2.78%
4.23% 20 Year Fixed -2 -19 8 67 3.49%
4.51% 30 Year Fixed -1 -13 3 81 3.63%
Certain Areas
3.37% 10 Year Fixed 0 -13 7 60 2.71%
3.57% 15 Year Fixed 2 -11 7 68 2.89%
4.39% 20 Year Fixed -1 -14 10 71 3.56%
4.66% 30 Year Fixed -1 -15 8 83 3.82%
09/23/13 Chase 1 Day Pt 5 Day Pt 30 Day 100-Day 100-Low
4.50% 30-Year Fixed Rate 0 -13 0 100 3.49%
4.25% 20-Year Fixed Rate 0 -12 13 91 3.30%
3.63% 15-Year Fixed Rate 0 -13 0 73 2.90%
4.13% 7/1 ARM 0 -13 -38 123 2.89%
3.50% 5/1 ARM 0 -12 -63 61 2.89%
           
09/23/13 Bank of America 1 Day Pt 5 Day Pt 30 Day 100-Day 100-Low
4.60% 30-Year Fixed Rate 2 -13 -3 110 3.43%
3.89% 15-Year Fixed-Rate 2 -11 3 113 2.76%
3.43% 5/1 ARM Rate 0 0 0 48 2.89%
* Average includes more banks than listed

Benchmark Chart:

Monday 1 Day 5 Day 30 Day 100-Day 100-Day
09/23/13 Benchmark Point Ch. Point Ch. Point Ch. Point Ch. Low
3.250 Prime Rate 0 0 0 0 3.25
4.93 Bond Buyer's 20-yr bond index 0 0 23 103 3.61
3.05% FHLMC 30 yr 30 days RNY 0 0 0 0 0.0305
3.08 FHLMC 30 yr 60 days RNY 0 0 0 0 3.08
3.989 FNMA 30 yr 30 days RNY 1 -18 7 104 2.914
4.038 FNMA 30 yr 60 days RNY 2 -18 8 107 2.941
0.17885 1 Month LIBOR Rate 0 0 -1 -2 0.122
0.2506 3 Month LIBOR Rate 0 0 -1 -2 0.21
0.3725 6 Month LIBOR Rate 0 0 -2 -5 0.32
0.6376 1 Year LIBOR Rate 0 -1 -3 -7 0.503
2 Call Money 0 0 0 0 2
3.46 20-year Note Yield Rate * -4 -11 7 97 2.44
2.72 10-year Note Yield Rate * -3 -14 11 102 1.66
0.1 1-year Note Yield Rate * -1 -2 -2 -1 0.1
0.02 3-month Note Yield Rate * 1 1 -4 -3 0.01
0.95% 11th District Cost of Funds 0 0 0 0 0.00951
3.440 Difference 3-mo & 20 yr ** -5 -12 11 100 2.38
1.487 Difference 10yr Note 30yr Loan 0 1 -12 -26 0.879408
* Treasury Yields - DAILY
** Pos change - economy to improve soon (probit model)
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