Posts Tagged ‘mortgage rates’

What’s ahead for mortgage rates this week: March 8, 2010

March 8th, 2010

Non-Farm Payrolls Mar 2008-Feb 2010

Brought to you by: www.thedailymortgagegazette.com

Mortgage markets improved last week in low-volume trading.  Between Monday to Thursday, Wall Street focused on the upcoming jobs reports and mortgage markets gained while traders jockeyed for position. Mortgage rates drifted lower through Thursday afternoon. But, then, after a better-than-expected Non-Farm Payrolls report Friday morning, mortgage markets — and mortgage rates — reversed.  Overall, mortgage rates dropped last week, but only by a small margin. Rates were best Thursday afternoon.  It was the second consecutive week in which mortgage rates fell.

Last week was also interesting in that both stock markets and bond markets improved, proving that rates don’t always rise when stock prices do. 455 of the S&P 500 companies posted gains last week.  If you’re shopping for a home or a refinance, though, don’t rest on your laurels. After Friday’s big sell-off, this week opens into a major headwind and, plus, the Federal Reserve’s support for mortgage markets ends in just 3 weeks.  This week, without much data to influence traders, the upward momentum in rates may have little cause to temper. We’ll see the Consumer Confidence numbers on Tuesday and Retail Sales on Friday.  Beyond that, there’s not much else.

After last week’s performance, conforming mortgage rates in California may be poised to rise rather sharply. If you’re waiting for the right time to lock your rate, it may have been this past Thursday. Consider locking your rate early this week to protect against further rate hikes.

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What’s ahead for mortgage rates this week: March 1, 2010

March 1st, 2010

Non-Farm Payrolls Feb 2008-Jan 2010

Brought to you by: www.thedailymortgagegazette.com

Mortgage markets improved last week as economic reports painted a less-than-stellar portrait of the U.S. economy and concerns of a looming monetary policy change eased. Mortgage pricing improved dramatically, despite a late-Friday retreat.  Mortgage rates are now at their lowest levels since early-February.  Last week was heavy on negative data:

In addition, both the Case-Shiller and Home Price Indices showed a slight pullback in the housing sector.  The impact of these statistics was muted, however. This is because Fed Chairman Ben Bernanke gave his semi-annual outlook to Congress and markets focused more on the chairman verbiage than hard data, looking for clues about the future of Fed policy.  Bernanke stayed on message — the Fed Funds Rate will stay low for an extended period of time.

Mortgage rates were also helped by a strengthening U.S. dollar and demand for U.S.-denominated bonds. When demand for mortgage-backed bonds is strong, mortgage rates fall.  This week, mortgage rates will jockey around Friday’s Non-Farm Payrolls report.  Jobs are playing a large role in mortgage bond trading and markets expect that 30,000 jobs were lost in February.  If the actual figure is better than 30,000 jobs lost, mortgage rates will rise. If it’s worse, rates will rise.

Other important data this week include Personal Consumption Expenditures — the Fed’s preferred inflation gauge — plus the Fed’s Beige Book release.  Mortgage rates remain in flux so float with caution.  Mortgage rates look good today, but by Friday, they could be much, much worse.

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Mortgage Rates spike on the Federal Reserve’s January 2010 Meeting Minutes

February 18th, 2010

 

FOMC January 2010 Minutes

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Mortgage markets reeled Wednesday after the Federal Reserve released the minutes from its January 26-27, 2010 meeting. Mortgage rates in California are now at their highest levels since the start of the year.  The Fed Minutes is a follow-up document, delivered 3 weeks after an official FOMC meeting. It’s a companion piece to the post-meeting press release, detailing the debates and discussions that shaped our central bankers’ policy decisions.  The Minutes is a terrific look into the Fed’s collective mind and, yesterday, Wall Street didn’t like what it saw.  Specifically, the report disclosed that:

  1. The Fed plans to break support for mortgage markets after March 31, 2010
  2. Raising the Fed Funds Rate will be a key part of the Fed’s strategy to tighten monetary policy
  3. The fundamentals behind consumer spending strengthened modestly

Furthermore, the Fed Minutes said that there is a growing risk of “higher medium-term inflation”. Inflation, of course, is awful for mortgage rates. Overall, the Fed’s economic optimism appeared stronger after its January meeting as compared to its December one.  A stronger economy should lead to better job growth and higher home prices throughout 2010.Mortgage rates were up yesterday but they remain historically low. And many analysts think that after March 31, 2010, rates will rise even more.  Therefore, if you’re buying a home in the near-term, or know you’ll need a new mortgage, consider moving up your time frame.   Every 1/8 percent makes a difference in your household budget.

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What’s ahead for mortgage rates this week: February 15, 2010

February 16th, 2010

 

Housing Starts Jan 2008-Dec 2009

Brought to you by: www.thedailymortgagegazette.com

Mortgage markets worsened last week on general profit-taking in the U.S. bond market, combined with talk of a coordinated rescue effort for Greece and its debt burden. Mortgage-backed bonds sold off, causing conventional and FHA mortgage rates to rise.  There wasn’t much hard data on which to trade last week, either, so momentum took markets farther than they otherwise might have moved on their own.  It marked the first time in 5 weeks that rates rose for California rate shoppers.  This week, data returns. Expect mortgage market movement.  Some of the week’s more important releases include:

  1. Housing Starts and Building Permits (Wednesday)
  2. The release of the last month’s FOMC Minutes (Wednesday)
  3. Business and consumer inflation figures (Thursday and Friday)

Inclement weather may have impacted last month’s Housing Starts reading so pay closer attention to Building Permits.  Permits precede actual construction and can be more indicative of economic optimism. If permit readings are strong, it should be a negative for mortgage rates.

The same is true for the FOMC Minutes.   Last month’s FOMC post-meeting press-release was decidedly middle-of-the-road, but the statement is just a summary of the Fed’s 2-day meeting, boiled down to a few paragraphs.  Wednesday’s release of the FOMC Minutes will reveal the deeper discussions among members of the Fed.  Wall Street will mine it for clues about the future of the economy.  If Wall Street senses optimism coming from the Fed — again — mortgage rates should rise.

And, lastly, keep an eye on Thursday and Friday’s inflation data.  Inflation is bad for mortgage rates so a higher-than-expected reading should spark a bond market sell-off.  Since mid-December, mortgage rates have moved within a tight range and there’s little reason for rates will break this range this week. However, we are near the top of the channel. If you know you’re going to need a rate locked soon, it’s probably best to do early in the week.

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What’s ahead for mortgage rates this week: February 8, 2010

February 8th, 2010

 

Non-Farm Payrolls Net New Jobs Feb 2008-Jan 2010

Mortgage markets improved last week on domestic jobs data and international banking concerns. The news triggered buying in the bond market and, as a result, conventional, FHA and VA mortgage rates in California improved for the 4th consecutive week.  Mortgage rates are now at a 6-week low but probably shouldn’t be.  It underscores just how important global events can be to U.S. mortgage markets.

For example, corporate earnings continue to improve and key elements of the economy are strengthening.  Even the Federal Reserve acknowledges this.  In most circumstances, that would be a boon for the stock markets and bond markets would suffer, including mortgage bonds.  Last week, that wasn’t the case.

Early in the week, as (1) China tightened its monetary policy, (2) Greece did little to quell lingering default fears, and (3) Spain raised its deficit forecasts, global investors sought to reduce their collective risk exposure. For safety of principal, many sold some of their more aggressive positions and moved the cash proceeds into the U.S. bond market — which includes mortgage bonds. On Wall Street, this type of trading pattern is called a “flight-to-quality”.  Because mortgage bonds are backed by U.S. government entities, the debt is considered to be ultra-safe.  Last week’s extra demand for bonds helped to push prices up and mortgage rates down.

And that was before Friday’s weak jobs report. Although the Unemployment Rate fell to 9.7%, the government reported a net loss of 98,000 jobs last month and this, too, helped mortgage rates tick lower.  This week, we’ll hope for momentum to continue.  There’s very little domestic news to move rates this week so keep an eye on the global market for similar stories like what we saw last week.  Or, if you’re not sure what to look for, just give me a call or send me an email and I’ll be happy to watch the markets and mortgage rates for you.Post

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What’s ahead for mortgage rates this week: November 30, 2009

November 30th, 2009

 

Jobs are in focus this weekMortgage markets improved last week on stronger-than-expected economic data and safe haven buying.  The holiday-shortened trading week amplified what should have been modest gains into large ones.  Conforming mortgage rates dropped by about a quarter-percent last week, dropping them near their best levels of the year — and of all-time.

Oddly, mortgage rates are falling as the U.S. dollar weakens. This is atypical because mortgage bonds are repaid in U.S. dollars.  When the value of the dollar is falling, therefore, the value of holding mortgage bonds become less over time.   Investors are snapping up bonds with fury, however. Partially because of lingering concerns related to Dubai, and partially because of faith in the U.S. economy’s long-term health.  This week, those beliefs could be shaken to the core — specifically because of Friday’s jobs report.

It’s no secret that the economy is growing.  Housing is improving, banks are re-capitalizing, and businesses are making capital investment.  However, employment is lagging.  More than 4 million jobs have been lost this year and the unemployment rate is north of 10 percent for the first time since 1983.  Consumers are worried for their jobs and are guarding their wallets the holiday season as a result. 

The economy can’t grow without consumer spending, though, and that’s why Friday’s job figures will play an especially large role in mortgage markets. If employment data goes positive, stock markets will rally at the expense of mortgage rates.  Conversely, if data looks worse, mortgage rates should dip.  Either way, it’s a gamble.  If you haven’t looked at the benefits of a refinance lately, waiting until Friday to see what happens may be ill-advised.  This is because the last two times mortgage rates fell this low, markets corrected within 48 hours, sending rates soaring higher.  Rates look good today. Consider locking something in before rates have reason to rise.

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One reason why mortgage rates are back to all-time lows

November 30th, 2009

 

FOMC Minutes November 3-4 2009Home affordability improved this week after the Federal Reserve released its November 3-4, 2009 meeting minutes.  The FOMC Minutes is a companion to the Federal Reserve’s post-meeting press release. It’s released 3 weeks after the Fed adjourns and details the internal debates that shape our nation’s monetary policy. 

As compared to the press release, the minutes can be rather lengthy. November’s press release featured 428 words, the minutes offered 6531.  However, this extra level of detail shapes markets and mortgage rates.  With Wall Street unsure about the economy’s path, investors look to our nation’s central bankers for guidance.  The Fed has made several points clear:

  1. The economy shows tell-tale signs of improvement
  2. Unemployment threatens the recovery
  3. Inflation pressures are low, for now

Overall, the FOMC Minutes paint the economy as in a state of measured repair, and under tight federal surveillance.  Investors like this message and, as a result, stock and bonds markets are improving.  If you haven’t checked mortgage rates lately, make a point to do that.  In the wake of the FOMC Minutes, conforming mortgage rates are now hovering near their all-time lows set exactly 1 year ago.

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Looking for a lower rate? Avoid this costly mistake…

October 2nd, 2009

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

The following information can help set the record straight and help you make smart decisions that lead to a low interest rate for your home loan.

How is the Fed’s Bond Purchase Related to Rates?

The Fed has been buying Mortgage Bonds. BUT… more precisely, they’re buying a lot of FNMA 30-yr 5.0% and 5.5% Bonds. Many of the mortgages in these pools are outstanding home loans with rates between 6.0% and 6.5%, as the rate that a borrower pays is different than the coupon rate given to an investor buying into that mortgage pool, with the difference being taken by Wall Street firms and government agencies. The loans in these pools are likely to be refinanced and paid – because current rates make it very attractive to refinance a loan over 6.0%. Thus, giving the Fed a quick recoup on some of its investment.

Bottom line: The Fed’s purchase of higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today’s low rates.  The problem is….

 

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

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What’s ahead for mortgage rates this week: August 24, 2009

August 24th, 2009

 

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

 

Mortgage rates are riding a roller coasterMortgage markets finished the week unchanged last week but don’t let that make you think the markets were flat.  It was a bumpy five days and rates were volatile.   Friday was the worst day of the week by far.  An all-day deterioration, sparked by better-than-expected housing data, caused mortgage rates to tack on a quarter-percent by the noon hour and markets never recovered.  Rates closed out at their worst levels of the week and the unfavorable momentum figures to carry into this week’s trading, too.  There are two major reasons why rates could rise higher this week:

  1. Fed Chairman Bernanke said Friday that the near-term growth prospects “appear good”. Comments like this draw money from bond issues to the stock market — a move that’s bad for rates.
  2. Crude oil hit a 10-month high, a potentially inflationary development. Inflation often leads mortgage rates higher.

Furthermore, rate shoppers should take note that this week will feature the release of two key housing reports — the Case-Shiller Index (Tuesday) and the New Homes Sales report (Wednesday). Both have handily beat expectations in recent months and should that trend continues, mortgage rates would likely rise because of renewed economic optimism.  What’s good for the economy, lately, has tended to be bad for rates….

 

To read the rest of this mortgage industry blog, 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

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