Mortgage Interest Rates Rise as Uncertainty Sweeps Washington

Graph of 30-year fixed mortgage rates

(Best Syndication News) Mortgage interest rates increased four of the last five days as the debt ceiling deadline loomed (see the mortgage rate charts below). Wrangling over the government shutdown and the debt ceiling pushed bond and note prices lower driving yields higher. The higher yields have had their effect on the current mortgage interest rates.

The U.S. Department of Treasury said that the yield on the 10-year note, the most common benchmark used by bankers to help calculate the interest on the 30-year fixed rate mortgage (FRM), increase five basis points (bps) on Tuesday. The Federal National Mortgage Association (OTCBB:FNMA) also increased their required net yield (RNY) rates five bps (see the benchmark chart below).

The average 30 year fixed mortgage rate jumped four bps on Tuesday. Over the last five days that rate jumped six bps. The Federal Housing Administration (FHA) and Veterans Administration (VA) loan rates increased four and 11 bps respectively.

The higher benchmarks gave lenders breathing room from the recent historical low rates. Citigroup Inc (NYSE:C) raised their rate one point Tuesday. Over the last 5-days their conventional rate jumped four bps.

JPMorgan Chase & Co. (NYSE:JPM) raised their rate 13 bps. Their 30-day trend was lower, but the bank has raised their rate over the last 100 business days (see the mortgage rate chart below).

KeyCorp (NYSE:KEY) raised their rate seven points in one day.

Investors are worried that the U.S. government will default on its debt obligations. The Dow Jones Industrial Average (DJIA) slipped 133 points Tuesday. The S&P 500 and NASDAQ also trended lower.

Neither the House of Representatives nor the Senate made a deal to raise the debt ceiling late Tuesday. Meanwhile Fitch Ratings Inc. put U.S. Treasury bonds on Rating Watch Negative.

By: John Waters
Business Reporter

Mortgage Rate Chart:

Best Syndication News Mortgage Survey
Tuesday 1 Day 5 Day 30 Day 100-Day 100-Day
10/15/13 National Average APR* Point Ch. Point Ch. Point Ch. Point Ch. Low
4.181% Average 30 yr fixed 4 6 -20 57 3.61%
4.704% Average 30 yr FHA 4 1 -30 53 4.17%
4.114% Average 30-yr VA 11 1 -22 28 3.83%
3.380% Average 15 year FRM 0 4 -14 41 2.97%
3.119% Average 5/1 ARM -11 -5 -14 22 2.90%
4.361% 30 Yr Fixed Jumbo 2 2 -29 52 3.84%
3.702% 15 Yr Fixed Jumbo -1 0 -22 49 3.22%
10/15/13 Citi Financial 1 Day 5 Day 30 Day 100-Day 100-Low
4.46% 30 Year Fixed 1 4 -35 64 3.82%
3.69% 15 Year Fixed 2 2 -25 54 3.15%
10/15/13 Chase 1 Day Pt 5 Day Pt 30 Day 100-Day 100-Low
4.50% 30-Year Fixed Rate 13 13 -25 74 3.76%
4.25% 20-Year Fixed Rate 13 13 -38 59 3.66%
3.50% 15-Year Fixed Rate 0 0 -38 37 3.13%
3.88% 7/1 ARM 0 0 -100 92 2.96%
3.38% 5/1 ARM 0 0 -75 48 2.90%
10/15/13 Key Bank 1 Day Pt 5 Day Pt 30 Day 100-Day 100-Low
4.58% 30-yr Fixed Rate 7 7 -28 71 3.88%
3.82% 15-yr Fixed Rate 9 9 -17 66 3.16%
Adjustable Rate Mortgage
3.68% 10/1 ARM 5 3 -42 59 3.09%
3.30% 7/1 ARM 2 3 -30 41 2.90%
3.08% 5/1 ARM 2 2 -24 19 2.89%
3.61% 3/1 ARM -3 7 4 20 3.41%
FHA Loans
4.30% 30-yr FHA 6 3 -40 56 3.73%
4.36% 20-yr FHA 8 4 -37 56 3.81%
3.94% 15-yr FHA 4 10 -21 51 3.43%
VA Loans
4.30% 30-yr VA 7 3 -41 55 3.75%
4.33% 25-yr VA 8 3 -40 56 3.77%
4.37% 20-yr VA 9 4 -38 54 3.83%
4.02% 15-yr VA 13 11 -23 53 3.50%
* Average includes more banks than listed

Benchmark Chart:

Tuesday 1 Day 5 Day 30 Day 100-Day 100-Day
10/15/13 Benchmark Point Ch. Point Ch. Point Ch. Point Ch. Low
3.250 Prime Rate 0 0 0 0 3.25
4.57 Bond Buyer's 20-yr bond index 4 4 -39 96 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
3.917 FNMA 30 yr 30 days RNY 5 5 -25 58 3.338
3.955 FNMA 30 yr 60 days RNY 5 6 -26 59 3.369
0.17375 1 Month LIBOR Rate 0 0 -1 -2 0.122
0.24355 3 Month LIBOR Rate 0 0 -2 -3 0.21
0.3634 6 Month LIBOR Rate 0 0 -3 -5 0.32
0.6291 1 Year LIBOR Rate 0 1 -4 -6 0.503
2 Call Money 0 0 0 0 2
3.5 20-year Note Yield Rate * 5 9 -4 70 2.8
2.75 10-year Note Yield Rate * 5 9 -11 74 2.01
0.16 1-year Note Yield Rate * 2 1 2 4 0.09
0.14 3-month Note Yield Rate * 6 9 12 10 0
0.96% 11th District Cost of Funds 0 0 0 0 0.00951
3.360 Difference 3-mo & 20 yr ** -1 0 -16 60 2.76
1.431 Difference 10yr Note 30yr Loan -1 -3 -9 -17 0.879408
* Treasury Yields - DAILY
** Pos change - economy to improve soon (probit model)
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