Guest Post – Tradition Mortgage’s Weekly Update December 28, 2015

Is Santa Coming to the Stock Market? Rates Hope Not

There is little in the way of meaningful economic data for mortgage investors to consider during the course of this holiday shortened week. The few investors actually at their desks will probably look to trading action in the stock market for clues as to where to set mortgage interest rates.

Over the course of the 119 year history of the Dow Industrial Average, the index has turned in a gain 79% of the time over the last five trading days of the year, aka: “The Santa Claus Rally”. Since 1971 the NASDAQ has seen a gain 80% of the time over the last five trading days of the year. The average gain has been 1.3%. The “so what” factor here is simple and straightforward. Rising stock prices tend to make it difficult, if not impossible, for mortgage interest rates to gain noticeable traction toward lower levels.


Week Ahead

Factors: Tuesday brings Consumer confidence, Wednesday brings Pending Home Sales.  Trading in the stock market will be main driver of rates.

Volatility:        Moderate
Trend:              Increasing

Today’s rate snapshot: 30-day lock rates as of 12/21/2015 9:00AM:
30-year Fixed (conforming):      4.00% (4.125%APR*) Same as last week
15-year fixed (conforming):      3.375% (3.5% APR*) Same as last week
7-year ARM (conforming)          3.50% (3.625% APR*) down .125% from last week
30-year Fixed (jumbo)              4.25% (4.375% APR**) up .125% from last week

*Based on 70% LTV, primary residence, rate and term refinance and purchase, 175k minimum loan size, 30-day lock. Rates subject to change at any time based on bond market pricing fluctuations. **Minimum loan size for a jumbo loan is $418,000.  This information is intended for professional reference only, and not intended for consumer use. Additional qualifications and disclosures apply.

Have a great week!

Jim Krantz
Vice President
NMLS # 761955
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489

Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 /