Mortgage Rates Fall Again as Spooked Investors Flee Stock Market

Graph of 10-year Notes

(Best Syndication News) Mortgage rates continued to drop this week after a 30-day downward trend (see the mortgage rate charts below). The lower rates are a reflection of the shift in money from equities to the safe havens.

The average 30-year fixed rate mortgage rate fell one basis point on Friday and is down 10 basis points (bps) on the week. Although mortgage rates are dropping right now, the 100-day trend has been higher (see the mortgage rate chart below). The average VA and FHA loan rates are lower, as are the average adjustable rate mortgages (ARMS) and Jumbo loans.

The prospect of a government shut down or - even worse - a failure of lawmakers to reach an agreement on the debt ceiling has put pressure on stocks. The Dow Jones Industrial Average (DJIA) fell 70 points on Friday and is down 193 points on the week.

Gold prices were higher on Friday as were prices for the benchmark 10-year notes. The higher note price pushed the yield down two bps to 2.64 percent (see the benchmark chart below). Banks use the 10-year note yield to help index their 30-year fixed rate mortgages.

Citigroup Inc (NYSE:C) lowered their conventional 30-year rate two bps on Friday. The lender has been on a 30-day lower trend.

JPMorgan Chase & Co (NYSE:JPM) lowered their 30-year fixed rate mortgage (FRM) 13 bps last week. Bank of America Corp (NYSE:BAC) lowered their rate 17 bps and Wells Fargo & Co (NYSE:WFC) lowered their rate 13 bps.

The London InterBank Offered Rate (LIBOR) also edged lower. The 6-month LIBOR fell slightly to 0.3665 and the 1-year LBOR fell to 0.6261 percent. Many adjustable rate mortgages are indexed to the LIBOR.

The 11th District Cost of Funds Index (COFDI) remains at .0954 percent.

By: John Waters
Business Reporter

Mortgage Rate Chart:

Best Syndication News Mortgage Survey
Friday 1 Day 5 Day 30 Day 100-Day 100-Day
09/27/13 National Average APR* Point Ch. Point Ch. Point Ch. Point Ch. Low
4.106% Average 30 yr fixed -1 -10 -28 61 3.49%
4.645% Average 30 yr FHA 0 -10 -34 74 3.69%
4.066% Average 30-yr VA -1 -6 -32 41 3.65%
3.352% Average 15 year FRM 0 -7 -18 50 2.86%
3.146% Average 5/1 ARM -2 -3 -10 22 2.88%
4.327% 30 Yr Fixed Jumbo -11 -17 -32 52 3.78%
3.690% 15 Yr Fixed Jumbo -1 -1 -21 67 3.02%
09/27/13 Wells Fargo 1 Day 5 Day 30 Day 100-Day 100-Day
4.55% 30-Year Fixed 0 -13 -38 88 3.66%
5.77% 30-Year Fixed FHA 0 0 -8 144 4.32%
3.80% 15-Year Fixed 0 0 -25 88 2.91%
3.12% 5-Year ARM 0 -4 -9 26 2.78%
3.90% 5-Year ARM FHA 0 -17 25 96 2.94%
Certain areas
4.63% 30-Year Fixed 0 -13 -25 88 3.75%
5.72% 30-Year Fixed FHA 0 0 -22 144 4.28%
3.17% 5-Year ARM 0 -4 -4 27 2.82%
Jumbo Loans
4.24% 30-Year Fixed 0 0 -38 25 3.86%
2.85% 5-Year ARM 0 0 -17 -4 2.85%
09/27/13 Citi Financial 1 Day 5 Day 30 Day 100-Day 100-Low
4.30% 30 Year Fixed -2 -13 -51 69 3.61%
3.62% 15 Year Fixed -5 -11 -30 70 2.92%
09/27/13 Chase 1 Day Pt 5 Day Pt 30 Day 100-Day 100-Low
4.38% 30-Year Fixed Rate 0 -13 -38 77 3.60%
4.13% 20-Year Fixed Rate 0 -13 -38 73 3.38%
3.38% 15-Year Fixed Rate 0 -25 -50 35 3.03%
4.00% 7/1 ARM 0 -13 -125 109 2.91%
3.38% 5/1 ARM -13 -13 -100 44 2.89%
09/27/13 Bank of America 1 Day Pt 5 Day Pt 30 Day 100-Day 100-Low
4.44% 30-Year Fixed Rate 0 -17 -42 82 3.62%
3.77% 15-Year Fixed-Rate 1 -12 -23 90 2.87%
3.43% 5/1 ARM Rate 0 0 0 52 2.92%
* Average includes more banks than listed

Benchmark Chart:

Friday 1 Day 5 Day 30 Day 100-Day 100-Day
09/27/13 Benchmark Point Ch. Point Ch. Point Ch. Point Ch. Low
3.250 Prime Rate 0 0 0 0 3.25
4.66 Bond Buyer's 20-yr bond index 0 -27 -7 76 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
3.861 FNMA 30 yr 30 days RNY 1 -13 -30 85 3.015
3.899 FNMA 30 yr 60 days RNY 1 -14 -32 85 3.049
0.17965 1 Month LIBOR Rate 0 0 0 -2 0.122
0.24835 3 Month LIBOR Rate 0 0 -2 -3 0.21
0.3665 6 Month LIBOR Rate 0 -1 -3 -6 0.32
0.6261 1 Year LIBOR Rate 0 -1 -4 -8 0.503
2 Call Money 0 0 0 0 2
3.4 20-year Note Yield Rate * -1 -6 -21 80 2.6
2.64 10-year Note Yield Rate * -2 -8 -20 84 1.8
0.1 1-year Note Yield Rate * 1 0 -3 -1 0.09
0.02 3-month Note Yield Rate * 2 0 -3 -2 0
0.95% 11th District Cost of Funds 0 0 0 0 0.00951
3.380 Difference 3-mo & 20 yr ** -3 -6 -18 82 2.56
1.466 Difference 10yr Note 30yr Loan 1 -2 -8 -23 0.879408
* Treasury Yields - DAILY
** Pos change - economy to improve soon (probit model)

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