Rates were net down .125% for the week ended April 9 mostly on positive overall Treasury auctions. This regains half of the .25% rise we had as the Fed ended it’s 15-month mortgage rate stimulus program on March 31. Conventional conforming rates are now back within .25% of all-record lows.


The WeeklyBasis rate lock bias going into the past three weeks is now shifting to a floating bias going into Monday, with more rate lock caution as the week goes on. Here’s why…

There’s no economic data Monday, and Trade Balance data Tuesday that’s usually not a big rate mover. Wednesday we have Consumer Inflation and Retail Sales data. Inflation should still remain subdued but if it moves up at all, rates would follow. Retail Sales also may not move a lot, but even a bit of up movement will cause rates to rise on perception that the worst is over—and retail sales are the most obvious indicator that consumers are ready to spend again.

Also Wednesday, Fed chairman Ben Bernanke testifies before congressional Joint Economic Committee on the economic outlook. His speech will contain much of the recent ‘subdued inflation for some time’ message, but the Q&A helps pinpoint timing on the Fed’s eventual exit from ultra low rates.


From Wednesday to Friday, market mood will be influenced by several speeches from prominent Fed officials, financial leaders, lawmakers, and journalists at the 19th Annual Hyman P. Minsky Conference On The State of the U.S. and World Economies. Speakers will explore where markets and financial reform goes from here.

Minsky (1919-1996) was an American economist who’s best known for his study of financial crises. The New Yorker’s John Cassidy, a speaker at this year’s conference, summed up Minksy’s work like this: “There are basically five stages in Minsky’s model of the credit cycle: displacement, boom, euphoria, profit taking, and panic.”

Minsky’s work has grown in influence as world economies more quickly go from booms (based on incurring massive debt to invest in higher yielding assets) to busts (based on the mass selling of those assets when the debt comes due). A ‘Minsky Moment’ is when the panic selling sets in…buyers are scarce because asset values plummet, and the debt used to finance asset purchases can’t be serviced.

In other words: credit and liquidity both freeze. Just like they did when the crisis began in Fall 2007.

So the topics covered at this week’s conference will be closely watched by market participants.

CONFORMING RATES ($200,000 – $417,000) – 1 POINT
30 Year: 5.0% (5.12% APR)
FHA 30 Year: 4.875% (4.99% APR)
5/1 ARM: 3.5% (3.62% APR)

SUPER-CONFORMING RATES ($417,001 to $729,750 cap by county) – 1 POINT
30 Year: 5.25% (5.37% APR)
FHA 30 Year: 5% (5.14% APR)
5/1 ARM: 3.875% (3.99% APR)

JUMBO RATES ($729,751 – $2,00,000) – 1 POINT
30 Year: 5.75% (5.87% APR)
5/1 ARM: 4.625% (4.74% APR)

Scenarios assume full doc pricing on single family home purchase or rate/term refi (but not cash-out refi) loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). Better or worse rates apply to specific client profiles. Better rates are available using tax deductible points. ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. This is not a loan commitment nor a loan guarantee, rates based on loan amount ranges shown and rates available at the time of production. Rates subject to change without notice. California Department of Real Estate license #01376428. Equal Housing Lender.