Monday Rate Update

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For the first day of the 2nd week of January, mortgage-based securities were waffling for the morning in sideways directions. In most cases, there has been solid resistance to rates of return going higher on securities, so there was minor dipping and returns all morning long. This is in line with U.S. Treasuries also foundering near historic lows as well. The bottom line is, nobody is making any kind of decent investment money on anything involving borrowing right now. There is some expectation, however, that an expected speech from the Federal Reserve and new economic reports due soon will cause some new direction changes in the market.

Going into the weekend, mortgage rates were unchanged at the close of the market after reversing a bit of a midday drop on Friday. The major indicator of the 30-year fixed mortgage stayed below the 3.5 percent mark, so the major message coming out was for consumers to take advantage of the low rates while they are still around.

Monday the rates dropped slightly, fluttering between 3.35 percent and 3.5 percent for the 30-year fixed. The comparable 15-year fixed also decreased to 2.75 percent with a high of 3.39 percent in some scattered, extreme cases. Only the 5-year adjustable rate mortgage realized an increase on Monday with hovering between 2.65 percent and 3.25 percent. All things considered, the performance is pretty good after four weeks of Fiscal Cliff whoppers and the latest employment report, both eventually affecting how much people have in their pockets to buy homes with.

Not surprisingly, the continued lows are maintaining the push of refinancing among consumers. When compared to five years ago in 2008, the 30-year fixed average rate has dropped from 5.92 percent to 3.37 percent at the end of December. For the average home original bought on a $300,000 loan, the difference can be thousands of dollars a year in avoided interest payments an increased monthly cash flow. Lenders continued to tell consumers to lock in now rather than play games waiting for yet another lower rate level. Almost everyone in the market is expecting an eventual rise; it just hasn’t manifested yet in January 2013.

About John Krystof

John Krystof writes about personal finance and money matters for He was born and educated in Central Europe, but presently resides in New York City.

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