Foundation Mortgage Rate Watch

 

News borrowers need.

 

  Tuesday  Nov. 18th, 2008 

 

 

30Yr Fixed  5.5 00% RATE  5.711% APR

15Yr Fixed 5.125% RATE 5.500% APR

5Yr ARM   5.250% RATE   5.397% APR

 

Good Faith Estimates provided without need of your SS#

 

 Rates are subject to change without notice. Rates are based on conforming loan amounts of $417,000.00, locked for 30 days on owner occupied purchase transactions of 80% LTV or less with impounds for taxes  and  insurance  with a minimum credit score of 720   

 

 
 
 Very early this morning (6:30) the 10 yr note had a gain of 7/32; by 8:30 it had fallen back to unchanged. At 8:30 Oct PPI declined 2.8% overall (the largest decline on record since 1947 mo/mo);  but the core (ex food and energy) jumped 0.4%. The core was expected at +0.1%. Yr/yr overall PPI up 5.2%; the core rate however was somewhat of a surprise at +4.4% yr/yr the highest level since Sept of 1989. In a normal economic environment the core rate of inflation would have sent prices lower and yields up, but these are of course, not normal times. Inflation is off the table in terms of the Fed's old target rate of 2.0% fore the core PPI; it is all about the recession now and inflation fears have been taken off the table by markets and the Fed.
 
At 9:00 Sept net foreign purchases of US notes and bonds totaled $66.2B, much better than the $17.5B expected. The numbers showed China continued to be the big buyer in treasuries at $43.6B in Sept, followed by the Caribbean, also know as hedge-funds coming in 2nd with $36.4B while Japan was a net seller at -$12.8B. Bonds got a bit of a boost and a bump in size, but these numbers are old and there remains a number of stuff on the day's docket.
 
Early overnight trading in the stock index futures had the DJIA down over 100 points from the close yesterday; by 8:30 the DJIA was trading down just 20 points. Crude oil is trading stronger today so far but still hanging close to the $50.00 technical support levels. At 9:30 on the open the DJIA was off 25 points. The inability for the S&P to hold its early Oct low is adding more selling in stocks; our target remains 7500 on the DJIA.
 
Bernanke and Paulson are on the Hill now to testify---again. No doubt they will be grilled on Paulson's decision to change the use of the TARP $700B bailout away from mortgages to shoveling money to banks and other institutions that were lining up for the grab bag.
 
Bernanke re-iterated the three elements of TARP---so far:  The first allows money market mutual funds to sell asset-backed commercial paper to banking organizations, which are then permitted to borrow against the paper on a non-recourse basis from the Federal Reserve Bank of Boston. Usage of that facility peaked at around $150B. The second program involves the funding of a special-purpose vehicle that purchases highly rated commercial paper issued by financial and nonfinancial businesses at a term of three months.  This facility has purchased about $250B of commercial paper.  A third facility, expected to be operational next week, will provide a liquidity backstop directly to money market mutual funds.  This facility is intended to give funds confidence to extend significantly the maturities of their investments and reduce over time the reliance of issuers on sales to the Federal Reserve's special-purpose vehicle.
 
Today’s Nov NAHB housing market index is expected to be unchanged at 14, moving sideways after the 3-point decline to the record low of 14 seen in October. The NAHB index only has history back to 1985, which means that the series didn’t exist during the 1973-75 recession and the double-dip recessions of 1980 and 1981-82. The index from the National Association of Home Builders is designed to measure the general state of the single-family home building marketplace, measuring present sales, 6-month sales expectations, and traffic of prospective buyers. The index fluctuates between 0 and 100, with the level of 50 representing the demarcation between a “good” versus “poor” outlook for the single-family home marketplace. The NAHB index is currently at rock bottom. Sentiment can’t get much worse among homebuilders, whom are simply in a survival mode and are only building homes for which they have firm contracts
 
Nothing left today but watching the stock market for direction of treasuries, although recently the safe have knee-jerks are much less significant. In the meantime the mortgage markets are sitting generally unchanged this morning as they did yesterday. It is all in treasuries these days; but if the 10 yr note succumbs to selling the reaction in the mortgage markets will push prices lower.
 

PRICES @ 10:00 AM  EST 
10 yr note 101.05 +9/32 3.61% -4 BP * Dec 10 yr note contract 117.27 +13/32
5 yr note 102.09 +1/32 2.26% -1 BP
2 Yr note 100.18 unch 1.20% -0.5 BP
30 yr bond 105.22 +11/32 4.16% -2 BP * Dec 30 yr bond contract 119.09 +15/32
Libor Rates 1 mo 1.452%; 3 mo 2.217%; 6 mo 2.631%; 1 yr 2.795%
30 yr FNMA 6.0 Jan 101.00 +2/32 (+3/32 frm 10:00 yesterday)
15 yr FNMA 5.5 Jan 100.18 +2/32 (+4/32 frm 10:00 yesterday)
30 yr GNMA 6.0 Jan 100.28 +2/32 (+2/32 frm 10:00 yesterday)
15 yr GNMA 5.5 Jan 100.23 +2/32 (+2/32 frm 10:00 yesterday)
Dollar/Yen 96.92 +0.55 yen
Dollar/Euro $1.2645 +$0.0009
Gold Dec $739.10 -$2.90
Crude Oil Dec $55.52 +$0.57
Goldman-Sachs Commodity Index 396.86 +0.87
DJIA 8275.97 +2.39
NASDAQ 1477.99 -4.06
S&P 500 848.78 -1.97