Rates fall to 1951 price

Fixed mortgage rates fell to the lowest level in six decades for the second straight week, according to new figures compiled by Freddie Mac. The GSE said the average rate on the 30-year Fixed Rate Mortgage dropped to 4.09%, the lowest rate since 1951. The average rate on the 15-year mortgage, a popular refinancing product, fell to 3.30%, also a new low.  Freddie Mac chief economist Frank Nothaft said continued investor worries over the debt crisis in Europe kept Treasury bond yields low, driving down mortgage rates in the process. Over the past week the yield on the benchmark 10-year Treasury fell to as low as 1.9% before rebounding to 2.08% on Thursday.
The market had a "slew" of economic news Thursday. The Consumer Pride Index was +.4% (higher than expected), but Jobless Claims were +11k to a total of 428k - higher than expected. The Empire State Manufacturing Survey General Business Conditions index inched down one point. Nationwide, Industrial Production increased 0.2% in August, and Capacity Utilization edged up to 77.4%. The Philadelphia Fed Index of General Business activity within the factory sector rose to -17.5 this month from -30.7 in August and 3.2 in July.
The impact of all this on rates was not particularly good, since the ECB coordination with our Fed will dampen the bid for safe assets (i.e., Treasury securities) and the CPI rose faster than expected in August. The 10-year US Treasury note yield increased as much as 13 basis points to 2.12%, after having dropped to a record low of 1.8770% three days ago and closed at 2.09%. Volume in Mortgage Backed Securities was light Thursday at just 64% of the 30-day average, according to Tradeweb's experience, and prices were worse by about .250.

The Federal Housing Administration is selling 11,000 to 13,000 foreclosed homes a month after re-engineering the way it manages and markets Real Estate Owned, or REO. For the first nine months of fiscal year 2011 (ending June 30) the average days-to-list and the average days-to-sell REO decreased by 76 days (61%) and 25 days (12%) respectively, as compared to Financial Year 2010, according to the commissioner's Sept. 8 testimony. This acceleration of sales has allowed FHA to reduce its REO inventory by nearly 40% in four months. "As a result of these initiatives and despite the spike in properties being conveyed to us, FHA's inventory of REOs is down to 48,324," Galante testified. The agency had an REO inventory of nearly 80,000 REO at the end of March.
30 year fixed - 3.99% + .50 cost points for rate
20 year fixed - 3.75 % + 0 points for rate
15 year fixed - 3.250% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.50% - 0 points for rate
7/1 ARM - 2.875%  + 0 points for rate

FHA/VA
30 year fixed - 4.00% with 0 points for rate
5/1 ARM - 2.75 with 0 points for rate
7/1 ARM - 3.25 with 0 point for rate

Jumbo - up to 2,000,000 with 20% down
30 year fixed - 4.750 % with +.250 points  for rate
15 year fixed - 4.250% + .250 cost points for rate
5/1 ARM - 3.250% + .250 points for rate
7/1 ARM - 3.750% + .250 points for rate
10/1 ARM 4.375% with +.250 points for rate