The average 30-year mortgage rate rose by 2 basis points to 3.96% on Monday, which equates to a $475.11 monthly payment per $100,000 borrowed. (A basis point equals one hundredth of a percentage point.) A month ago, the equivalent payment was higher by $1.73.
The average 15-year mortgage rate fell 3 basis points to 3.12%, equating to a $696.37 monthly payment per $100,000 borrowed. A month ago, the equivalent payment was higher by $0.96.
|
Rate (National Average) |
Today |
1 Month Ago |
|---|---|---|
|
30-year fixed jumbo |
4.19% |
4.42% |
|
30-year fixed |
3.96% |
3.99% |
|
15-year fixed |
3.12% |
3.14% |
|
30-year fixed refi |
3.99% |
4.06% |
|
15-year fixed refi |
3.14% |
3.21% |
|
5/1 ARM |
3.08% |
3.34% |
|
5/1 ARM refi |
3.19% |
3.48% |
5/1 ARM: ADJUSTABLE-RATE MORTGAGE WITH AN INITIAL FIXED five-YEAR INTEREST RATE. DATA SOURCE: BLOOMBERG. RATES MAY INCLUDE POINTS.
Image source: Getty Images.
The "big short"
In his book The Big Short, Michael Lewis named mortgage trader Greg Lippmann "Patient Zero" for spawning the idea of betting against the subprime-mortgage market. Now, Bloomberg reports that Lippmann's then-employer, Deutsche Bank, has identified the next "big short" in another area of the mortgage market: commercial mortgage-backed securities, which are pools of mortgages on commercial real estate.
In a note published last week, Ed Reardon and Simon Mui advised clients to purchase insurance on parts of two CMBX indexes -- tradeable indexes that reference a basket of 25 commercial mortgage-backed securities.
Last month, speaking at Stanford University, Federal Reserve Chair Janet Yellen said commercial property prices were "high," but Deutsche's call isn't purely cyclical. Indeed, the two series of indexes identified are the 2012 and 2013 "vintages" for a very specific reason: Those years contain relatively greater exposure to shopping malls. In other words, the interest (and, ultimately, the principal) payments on those securities are dependent on revenues from brick-and-mortar stores located in shopping malls.
Given the unrelenting assault from an absolute juggernaut, Amazon.com, on the entire sector, it's not hard to see how an investor might have serious qualms about how robust those revenues are, particularly when one looks out three to five years and beyond.
