As promised rates dropped by about 1/8 of a point today on both conforming and even jumbo loans. Based on what happened today with treasuries and the RNY as discussed in the original post, I would expect rates to drop another 30 to 40 basis points (0.03% to 0.04%) tomorrow.
The scaling on the jumbo chart makes the treasury swings look much larger than they actually are due to the wild fluctuations in Jumbo loan rates over the last month. However, even jumbo rates are coming down and many credit unions and even Washington Mutual have backed off on the large premiums they were charging on Jumbo mortgages. Several credit unions I use are back down to around a 3/8 of a point premium on Jumbo’s over conforming loans. Also many banks are charging really high rates for Jumbo loans with zero points, but paying points is buying a much larger reduction in rates than it used to. Many jumbo loans are coming down 0.5% per point, vs. a more typical 0.25%. This tells me banks think the jumbo rate premiums will be shortlived and if you are willing to front some money for points they are willing to give you a much lower rate.
