| Loan Program | Up to $417,000 | $417,001 - $601,450 | $601,451-$1,000,000 |
| 30 yr Fixed Rate | 4% APR 4.076% | 4.25% APR 4.311% | 4% APR 4.039% |
| 15 yr Fixed Rate | 3.25% APR 3.383% | 3.5% APR 3.616% | 3.625% APR 3.698% |
| 5/1 Adjustable Rate | 3% APR 3.132% | 3% APR 3.058% | 3% APR 3.038% |
Single family, owner occupied, 80% loan to value, 740 or better fico
Current Trend Direction: Higher
Advise Your Clients: Start Day Carefully Floating – but read on
Current Price of FNMA 3.5% Bond: $103.38, +19bp
There is nothing like some heightened Mideast tensions, wicked Stock selloff in China and a significant decline in Stocks here in the US to ring in the New Year.
The big news so far this AM, is Saudi Arabia cutting off diplomatic ties with Iran? This news has caused Oil to move higher on what could bring even more uncertainty to the region.
Weak economic news in China has caused a shockwave as their major Stock market is down a whopping 7% before circuit breakers kicked in and closed the market for the rest of the trading day. All of this negativity and uncertainty has given Mortgage Bonds a somewhat modest boost.
The yield on the 10-Year T-Note has fallen back down to 2.22% from Thursday's close of 2.28%.
The only economic report today is the 10am release of the December ISM Index. But investors will be looking ahead to the Friday release of the December Jobs Report, which features the closely watched Non-farm Payrolls report, where it is expected that employers added 200K new workers.
There are no Note or Bond auctions scheduled for this week. The Fed will be back in the markets this week purchasing Mortgage Backed Securities. The New York Fed will be purchasing up to $2.325B in Fannie/Freddie 30-Year 3.5s and 4s later this morning.
Seeing Mortgage Bonds up just 19bp in the face of very weak Stock prices is a bit of a concern, as we would expect to see more Bond gains in the face of such high uncertainty. With that said, consider starting the day carefully floating new clients – with the key word being “carefully”. It would not surprise us if Bonds give up some of these gains. Looking ahead, we are likely going to advise locking in advance of the volatile Jobs Report later this week.
