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Rate Pulse Aug 3

Third straight day at 6.78% — look at the ARM gap instead

Nothing moved again, and the fixed rate is sitting near the top of its 30-day range — but the 5/1 ARM at 6.37% is a 41 basis point gap that is worth a conversation before Friday's jobs report.

Monday, August 3, 202610Y Treasury 4.68%
30Y fixed
6.80%
-7bps today
15Y fixed
6.15%
7d +8bps
5/1 ARM
6.31%
30d +23bps
Now

The 30-year has now printed 6.78% for three consecutive sessions — no catalyst, no movement, nothing new from the Fed. This is the third quiet day in a row and there is no point dressing it up. The 10-year is at 4.68%, effectively where it has been all week, and VIX has drifted down to 17.09 from 20.66, which is the market telling you it has no strong opinion heading into the data. Fed funds is unchanged at 3.63%. When the bond market goes this quiet, it is usually positioning ahead of a print rather than a verdict on anything.

Next

The calendar does the work from here. Jobless claims and the Freddie Mac survey both land Thursday the 6th, and the jobs report follows Friday the 7th. That Friday number is the only thing on this week's board with the weight to reprice anything — a soft payroll print is the realistic path to a lower 30-year this month, and a hot one puts 6.90% back on the table. After that the calendar empties out until the September 15–16 FOMC, which carries a full set of economic projections. Between now and Friday, expect the same flat tape you have been staring at since Thursday.

Range

On the range: 6.78% sits 4 basis points off the 30-day high of 6.82% and well above the 30-day average of 6.65%. Over 90 days the band is 6.45% to 6.82%, average 6.59%. Today is the rich end of both windows — this is not a dip, and anyone waiting for one has been waiting a month while the number went up 23 basis points. Where it gets interesting is the adjustable side. The 5/1 ARM is printing 6.37%, a 41 basis point gap under the fixed, and against its own 90-day band of 6.27% to 6.61% that ARM number is cheap in a way the fixed simply is not right now.

Do

That gap is worth actual money. On a $400K loan the ARM payment runs roughly $108/month under the 30-year fixed — about $2,494 versus $2,602 in principal and interest, or near $1,300 a year. For the borrower who genuinely will not be in the loan in seven years — the relocation buyer, the physician heading into a fellowship, the borrower who fully intends to refinance the first time the fixed breaks — that is a real option you probably have not put in front of them, because for two years the ARM spread was too thin to bother mentioning. It is not thin now. Do this today: pull every purchase file in your pipeline with a stated horizon under seven years and run the ARM alongside the fixed before Friday, so the comparison is already in their hands when the jobs number moves pricing.

Paste-ready talking points

  • Rates held steady again today — the 30-year has not moved in three days, so nothing is slipping away this week.
  • On a $400K loan, an adjustable option runs about $108/month less than the 30-year fixed right now — roughly $1,300 a year.
  • If you know you are moving or refinancing within about seven years, that gap is worth ten minutes of your time.
  • Friday brings the monthly jobs numbers, which is the one thing this week that could move your payment either direction.
  • Reply RATE and I will send both options side by side on your actual loan amount.

Sample client message

Purchase clients with a short time horizon
SubjectTwo options worth comparing before Friday, {client}

Hey {client} — rates have been flat for three straight days, so nothing urgent is happening, but I want to put something in front of you before the end of the week. There is an adjustable option right now that comes in about $108/month under the 30-year fixed on a $400K loan. For a lot of people that gap is not worth the tradeoff, but if you have a sense that you would be moving or refinancing within about seven years, it changes the math meaningfully — call it $1,300 a year while you are in the house. I am not steering you one way; I just do not want you deciding without seeing both. Friday brings the monthly jobs numbers, which can move pricing, so I would rather we compare now while things are calm. Reply with your best guess on how long you plan to stay and I will run both on your real numbers today.