INTEREST RATES HIT 3 WEEK LOW BEFORE ELECTION:
November 5th, 2012
Rates improved to a 3 week low on the Monday before the election.
Last week the MBS market closed (+20 bps) for the week. The markets were again helped by a Friday rally that was somewhat unusual this time. October’s unemployment report was released on Friday, and even though the unemployment rate went up to 7.9%, the job creation was higher than expected which will usually trigger higher stock prices and increasing rates. This time it did the opposite.
On Monday the MBS market closed (+18 bps) on the day, after trading up over 30 bps for most of the day.
This week the market is focused on the election. The general consensus is:
If Obama wins, rates will improve
If Romney wins, rates will increase
I don’t think there will be huge swings either way, but I do see some movement based on who wins. What nobody wants is uncertainty over the results. Hopefully the winner is confirmed Tuesday evening.
Outside of the election – the Treasury is auctioning off 72 billion in notes this week. There is concern that the European debt situation could creep back into the rate markets after being absent for some time. Greece is having trouble meeting the terms of the country’s bail out. There will likely be more news on this near the end of the week
Have a great election week and get out and vote.
30 year fixed: 3.25% paying .79 points, 3.375% paying 0 points, 3.625% – $0 costs
20 year fixed: 3.25% paying .25 points, 3.375% paying 0 points, 3.5% – $0 costs
15 year fixed: 2.625% paying .82 points, 2.875% paying 0 points, 3% – $0 costs
5/1 ARM: 2.125% paying .99 points, 2.5% paying 0 points, 3% – $0 costs
7/1 ARM: 2.375% paying .98 points, 2.625% paying 0 points, 3.125%- $0 costs
30 year fixed High Balance Loan: 3.5% paying 0 points; 3.625% – $0 costs
30 year fixed FHA: 3.25% – $0 costs
15 year fixed FHA: 2.75% – $0 costs
30 year fixed VA: 3.25% – $0 costs
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INTEREST RATES HIT 3 WEEK LOW BEFORE ELECTION