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Zero-point rates on 30yr fixed Conforming loans (up to $729k) begin the week back at record lows, and one-point rates on Jumbo loans (above $729k) are steady in the low- to mid-5% range. The European debt crisis flared up again last week and Friday's jobs report was drastically lower than expected. The result was that global investors continued to be net buyers of Treasury and mortgage bonds as a safe haven, and when mortgage bond prices rise on these buying rallies, rates drop. 
RECORD LOW RATES TO START WEEK As of market close Friday mortgage rates were again at their lowest levels since 1971. Attached is a chart showing this. The WeeklyBasis rate lock bias continues this week - mortgage bond levels make it unlikely rates can drop further, and this is the time for borrowers to lock record low rates. The latest EU country to buckle under the weight of its own debt is Hungary, as their prime minister issued a statement Friday saying their "economy is in a grave situation" and market speculation about Hungary defaulting on their debt "isn't an exaggeration." Markets indeed speculated by selling (or shorting) the country's debt securities, and once again investors shifted assets into U.S. Treasury and mortgage bonds - which helps rates. The other big factor in rates dropping last week was Friday's poor jobs report. It showed 431k jobs were added to economy versus 500k expected. Far worse was that 411k jobs were temporary workers hired to conduct the U.S. Census, and only 41k private sector jobs were created. ECONOMIC WEEK AHEAD This week is light on economic news. The biggest market mover is $70b in Treasury auctions as follows: $36b 3yr Notes Tuesday, $21b 10yr Notes Wednesday, $13b 30yr Bonds Friday. New Treasury supply, especially the longer dated 10yr and 30yr issues, competes with mortgage bonds for buyers and can also spook bond investors. So these auctions can cause mortgage bonds to sell off and rates to rise if they don't go well. There are also 7 senior Fed officials giving speeches on the economy throughout the week, and we have Retail Sales on Friday, a key measure of consumer strength. Also BP seems to be making progress on the Gulf oil leak and Apple may release a new iPhone this week, both of which could push stocks higher and rates would also move higher if this was the case. CONFORMING RATES ($200,000 - $417,000) - 0 POINT 30 Year: 4.75% (4.87% APR) FHA 30 Year: 4.75% (4.89% APR) 5/1 ARM: 3.5% (3.62% APR) SUPER-CONFORMING RATES ($417,001 to $729,750 cap by county) - 0 POINT 30 Year: 4.875% (4.99% APR) FHA 30 Year: 4.875% (4.99% APR) 5/1 ARM: 4.25% (4.37% APR) JUMBO RATES ($729,751 - $2,00,000) - 1 POINT 30 Year: 5.375% (5.49% APR) 5/1 ARM: 4.5% (4.62% APR)
By Julian D. Hebron / VP RPM Mortgage
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