Opening up the first full week of December, mortgage rates drooped Monday morning but regained ground by the end of the day to match Friday’s close. Overseas market plays and movement caused stocks to go higher in Asian markets and bonds to weaken. The effect had a similar result on mortgage rates when the market opened this morning at home. Eventually, though, the effect disappeared.
The market didn’t start turning around Monday morning until about 10am when bonds came in weaker versus stronger due to the latest economic reports. Lenders finally became comfortable with the data and started increasing their rate figures accordingly. As a result, the 30-year conventional mortgage still stabilized at 3.375 percent for an average with a smattering of lower level offerings in the mix.
The rest of the week of December 3 is not predicted to be particularly morale-boosting. The Fiscal Cliff negotiations are going to dominate the entire month if no solution is arrived at early. Some took hope in the statements made about finding common ground at the end of November, but that disappeared with the repeat use of the word “stalemate” all over the news on Monday. As the month ticks closer to the end of the year, the Cliff doom-and-gloom will weigh heavier on all markets. The federal government simply spends too much money on contracting and programs to be ignored, and $1 trillion in pending automatic cuts is no small potatoes.
Lenders themselves noticed each other jockeying around all session long with repricing the name of the game for the day. Unlike the last three weeks, some lenders are actually considering taking advantage of a rate float as a good thing, expecting rates might drop further by the end of December if Washington D.C. negotiations go to the 11th hour. The contrarians are expecting a less-than-stellar jobs report in December that will instead boost rates, but no one is holding their breath for it.
As a result, the 30-year fixed closed today at 3.375 percent while the comparable 15-year fixed mortgage floated between 2.75 percent and 2.875 percent. The alternate 5-year adjustable rate mortgage was lower than November’s ranges, closing Monday with 2.625 percent to 3.25 percent.
