PMZBuzz

Mortgage markets worsened last week on a mixed bag of economic data.  Inflation data came in soft, but so did the start of the holiday shopping season.  For the first time in a month, mortgage rates worsened last week, adding roughly 0.125 percent on conforming fixed-rate products, and a little bit more on ARMs.

Despite rates worsening, there was still some good news for home buyers and would-be refinancers. Mortgage rate volatility was markedly lower than in recent weeks.  You could shop for mortgage rate last week and actually take your time about it.  This is in stark contrast to the last month or so over which mortgage rates changed every few hours, on average.  This week, though, because a heavy data calendar is combining with a holiday-shortened trading week, rates aren’t likely to stay as tame.

• Monday: Existing Home Sales
• Tuesday: Consumer Confidence, Home Price Index, Fed Minutes
• Wednesday: New Home Sales, Personal Income and Outlays

Each of these data points are market-movers by themselves. In tandem, however, they could really shake things up. Then, at the tail end of the week, markets will react to Black Friday.  If stores look full Friday and initial receipts appear high, stock markets should rise at the expense of bonds, leading mortgage rates higher.

Additionally, expect that mortgage rate changes will be amplified because of low trading volume.  This could work in your favor, or out of your favor — depending on the market direction.  With mortgage rates at such low levels and unlikely to fall much further, locking a rate is advisable. If you choose to float, though, keep your loan officer on speed dial because when rates do rise, they’re going to rise quickly. 

Mortgage markets were extremely volatile last week, carving out a wide range between Monday and Friday.  Thankfully for rate shoppers, the overall momentum was positive.  Mortgage rates fell for the second time in as many weeks. Rates still sit higher versus their early-October lows.  For pure “news”, last week was a busy one:

• The Federal Reserve held the Fed Funds Rate near 0.000 percent
• The Unemployment Rate crossed 10 percent
• The First-Time Home Buyer Tax Credit was extended to April 2010

Combined, the 3 events reinforced the growing belief on Wall Street that the U.S. economy is in recovery, but not yet out of the woods.  This particular philosophy has been excellent for mortgage rates, helping to hold conforming 30-year fixed mortgage rates near 5.250 percent since the start of the year.   It helped rates last week, too.  But low rates aren’t without threats. 

For one, the Fed’s vote to hold the Fed Funds Rate near 0.000 percent will eventually spark inflation concerns.  When it does, mortgage rates will rise. That won’t be this week, though.  Actually, nothing may happen this week — there’s not much data to release.  Apart from a retail report, a confidence survey and some Fed speakers, the calendar is bare.  That, and Wednesday is a federal holiday.

However, without data, markets often trade on things like geopolitics, or energy concerns, or momentum.  In other words, don’t be lulled into thinking rates won’t change this week.  At least for now, the mortgage rates look good. By the end of the week, that may not be the case.

Mortgage markets improved last week after a series of hugely volatile trading sessions.  Rates carved out a wide range on the week, culminating in a late-Friday plunge that dropped rates by about 1/8 percent.  It was the first time in 5 weeks that mortgage rates fell.

Volatility like that of last week is nothing new on Wall Street; it’s been a running theme in 2009.  Volatility occurs when markets don’t agree on what’s next for the economy and, this year, there’s been a lot of disagreement like that.  Data has been inconsistent.  Take last week for example.  At 9:00 AM Tuesday morning, the Case-Shiller Index showed home prices rising nationwide.  Because many analysts believe housing fueled the recession, strength in the sector is widely construed a positive for the economy.  Mortgage rates rose on the news.  But then, an hour later, the national consumer confidence report revealed a substantial deterioration in sentiment versus the month prior.  The data forced Wall Street to do an about-face.

Housing is important to the economy, but it can’t affect growth like consumer spending can. When Americans are less confident about their future income, they tend to keep their wallets closed, retarding economic growth.  Holiday Shopping Season is getting underway and the last thing businesses want to see is a suddenly reserved American shopper.  This week, the volatility should continue. 

In addition to the release of key employment and housing data, the Federal Open Market Committee has a scheduled 2-day meeting.  The group’s Wednesday afternoon adjournment will influence mortgage rates.  The Fed is widely expected to keep the Fed Funds Rate in its target range near 0.000 percent, but it won’t be what the Fed does that will matter as much as what the Fed says.  If the FOMC’s press release shows optimism for the economy, mortgage rates will rise in response.  Alternatively, if the Fed appears more dour, rates will fall. 

Either way, consider locking your rate before the Wednesday afternoon announcement.

Mortgage markets were volatile last week, making it very difficult to shop for mortgage rates.  On most days, lenders issued multiple rate sheets with the trend putting rates higher in the morning, and lower in the afternoon.  Overall, mortgage rates were unchanged on the week. It broke a three-week streak through which mortgage rates rose.  Rates remain roughly one-half percent higher than the lows of early-October.

The biggest positive for rate shoppers last week was tame economic data — specifically concerning the Producer Price Index and the housing sector.  The Producer Price Index is an inflationary, Cost of Living-like measurement for businesses and it went negative in September. Analysts weren’t expecting that and the surprise pulled rates down an eighth.  Similarly, in housing, both the Home Price Index and Housing Starts figures were softer than expectations. These, too, tugged mortgage rates down.  At least temporarily.

We say “temporarily” because — all week long — a steadily-weakening U.S. dollar was leading mortgage rates higher.  All things equal, mortgage rates rise as the dollar loses value and, last week, the dollar touched a 14-month low versus the Euro. The greenback’s weakness countered most of the “positive” news for rate shoppers and is a major reason why rates were so volatile.  The volatility should continue into this week, too. With little data and no Fed speakers, look for mortgage rates to move with the market’s momentum.  Lately, momentum has been pulling rates higher so if you’re floating a rate and trying to time a bottom, the chances are good that we already passed it. Consider locking your rate before rates rise much further.  Once rates break 6 percent, they may not come back down.

Brought to you by your trusted advisor: Daniel A. Sosa

Mortgage markets worsened last week as investors responded to a recovering global economy.   Despite briefly touching their lowest levels since May, mortgage rates ended the week dramatically higher.

It’s the second straight week that rates soared on a Friday.  For several months, Wall Street has been in limbo; undecided whether the economy is truly showing signs of improvement. Negative news has tended to sink rates while positive news has tended to do the opposite.

Lately, investors have been in search of signals anywhere signals can be found.  Last week — sans hard-hitting economic data – those signals came from the worlds’ Central Banks.   Shortly after Australia raised its interest rates by one-quarter percent, Fed Chairman Ben Bernanke suggested that the Fed may raise rates sooner than expected. Stock markets rallied on the news and mortgage bond markets tanked.  When bond prices fall, rates…..

To read the rest of this mortgage industry blog, or to begin your mortgage loan approval, visit:

http://www.loanapproval411.com/info_01/page_1.rad

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

Brought to you by your trusted advisor: Daniel A. Sosa

Mortgage markets rallied for most of last week, but ended Friday on a sour note.  After touching their lowest levels since Memorial Day, mortgage rates spiked to close out the week.  Despite pricing getting worse by 1/4 percent Friday afternoon, however, mortgage rates still managed to fall for the second consecutive week.

There were two main storylines last week on Wall Street.  The first was data-driven.  After several months of better-than-expected results, the September Non-Farm Payrolls report fell well short of expectations.

According to the government, another quarter-million jobs were lost last month, raising the 12-month tally to 5.75 million.  Additionally, consumer confidence figures dropped.   The stories are related and it brings us to the second storyline.  Without job growth, some analysts are openly wondering how the economy will ever start to expand.  Especially with the Holiday Shopping season getting underway…..

To read the rest of this morgage industry blog, or to begin your mortgage loan approval, visit:

http://www.loanapproval411.com/info_01/page_1.rad

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

Brought to you by your trusted advisor: Daniel A. Sosa

The mortgage market resumed its winning streak last week after a 1-week hiatus.  Markets rallied into the weekend and mortgage rates eased lower overall.  It’s the third week out of four that rates improved and, ironically, rates may have dropped last week because traders were watching the wrong metrics. 

With respect to housing, analysts found August’s Existing Home Sales and New Homes Sales reports disappointing.  Both posted weaker-than-expected sales volume, sparking a stock market sell-off that led bond markets higher.  It was the wrong reaction.

Versus home supply, the number of monthly sales isn’t nearly as important to the national housing recovery and the supply of homes fell in August.  If Wall Street had been paying better attention, mortgage rates may have risen instead.  The supply of homes for resale fell 11 months, and of new homes by 0.3 months.  This week will be heavy with data so don’t expect rates to stay low for long……

To read the rest of this mortgage industry blog, or to begin your mortgage loan approval, visit:

 http://www.loanapproval411.com/info_01/page_1.rad

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

Brought to you by your trusted advisor: Daniel A. Sosa

After improving in the two prior weeks, mortgage markets finished last week unchanged overall.   Mortgage rates were down early in the week but managed to give up all of their gains late-Friday afternoon.  It’s the same volatility variety we’ve seen in most weeks this year.   Markets moved on to both positive- and negative-type news last week.  On the positive side:

• Fed Chairman Ben Bernanke said the recession is “very likely over“
• Retail Sales were much stronger than expected
• Warren Buffett confirmed to CNBC that he was back in the market

On the negative side, Housing Starts idled and corporate earnings fell flat.  This week, the market moves on.   Investors will watch several key releases including Existing Home Sales on Thursday, and Consumer Sentiment and New Homes Sales on Friday.  The most important event of the week by far, however, is the scheduled, 2-day meeting of the Federal Open Market Committee.   The FOMC is the policy-setting group of the Federal Reserve and each time it meets, markets have a tendency to get volatile.  Markets expect the FOMC to leave the Fed Funds Rate within its current “target range” of…..

To read the rest of this mortgage industry blog, or to begin your mortgage loan approval, visit:

http://www.loanapproval411.com/info_01/page_1.rad

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com

Brought to you by your trusted advisor: Daniel A. Sosa

On the 1-year anniversary of the Lehman Brothers collapse, Fed Chairman Ben Bernanke said Tuesday that the “recession is very likely over at this point”.  His comments were supported by a Retail Sales report for August that was much better-than-expected.  Equities improved on the day, mortgage markets worsened, and home affordability suffered.  The days of ultra-low mortgage rates may be coming to an end.

Since last September, mortgage bonds markets have been in Rally Mode.  As the Financial Crisis of 2008 worsened, investors fled the relatively risky world of stocks and moved dollars into safer investments like cash and bonds — including the mortgage-backed kind.  Risk aversion is common when market uncertainty exists but last year’s aversion was so strong that, by late-November, it had forced mortgage rates down to an all-time low. 

Since November, however, rates have been on the rise.  Stronger economic data and a general feeling of optimism have helped stock markets recover and some of those gains are coming at the expense of low mortgage rates.  Therefore, if you’re wondering what mortgage rates might do going forward, listen to the words of the Federal Reserve Chairman. If he sees economic recovery ahead, it’s probably going to happen.  It should spell higher mortgage rates into 2010…..

To read more of my mortgage industry blogs, or to begin your mortgage loan approval, visit:

http://www.loanapproval411.com/info_01/page_1.rad

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanpproval411.com

Brought to you by your trusted advisor: Daniel A. Sosa

Mortgage markets improved last week, briefly touching their best levels in 3 months.   However, a rough Friday afternoon took away some of those gains.  Mortgage rates touched their lowest levels of the week Friday morning before tacking on an eighth-percent or more over the last 90 minutes of trading.

It’s the second straight week in which mortgage rates fell.  Last week was an odd week, of sorts, because economic data was lacking.  Markets, therefore, improved mostly on momentum plays and a general shift from cash positions into bonds.   This week, data returns.  In addition to the Consumer and Producer Price Indices — “Cost of Living reports” for households and businesses, respectively — markets will also digest a Retail Sales report, Housing Starts for August, and 3 speeches from members of the Federal Reserve.  Each has the power to move markets…..

To read the rest of this mortgage industry blog, or to begin your mortgage loan approval, visit:

http://www.loanapproval411.com/info_01/page_1.rad

Sincerely and respectfully,

Daniel A. Sosa

PMZ Mortgage Consultant

Office: 209-472-2010 x4716

Cell: 209-298-8017

Email: dsosa@pmzloans.com

Website: www.loanapproval411.com