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The Deal On Mortgage Rates This Week – September 7, 2010

Tuesday, September 7th, 2010

Mortgage rates changing quicklyLast week was a roller-coaster ride in the conforming mortgage market.  After opening the week by making new, all-time lows, markets reversed sharply on better-than-expected data in manufacturing and housing, and data from overseas.

Rates rose through Wednesday and Thursday, then Friday’s jobs report sent rates jumping.

Last week marked the first time that mortgage rates worsened 3 days in a row since late-April.

The combination of the jobs report not posting as poorly as predicted, and light volume because of Labor Day, pushed rates higher by as much as a quarter-percent in some markets.

On the week, conforming mortgage rates in Texas were unchanged but, depending on when you locked, there was great disparity.  Tuesday’s rates were much better than Friday’s.

Meanwhile, this week, with little data due for release, mortgage rates should remain unpredictable, moving as a result of momentum and outside influence. It makes for dangerous times for rate shoppers.  Mortgage rates may fall, but, then again, they might rise, too.

Keep in mind that markets are in the midst of a 19-week rally and rates can’t fall forever. Mortgage bonds are likely overbought so when the selling begins, pricing should worsen quickly.  This will cause mortgage rates to spike.

Therefore, if you’ve been shopping for a mortgage or are just wondering if the time is right to refinance, call me and let’s work the numbers together. Refinancing won’t make sense for everyone, but it may make sense for you.

Mortgage rates are still exceptionally low and you should definitely take advantage.

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The Deal On Mortgage Rates This Week – August 30, 2010

Monday, August 30th, 2010

Existing Home Supply (July 2009 - July 2010)Mortgage markets improved last week despite a major mortgage bond sell-off Friday afternoon. Prior to the jump, conforming mortgage rates had cut new, all-time lows by Thursday, only to lose up to 0.250 percent on the last day of the week.

Meanwhile, the same type of news that drove rates lower Monday through Thursday also contributed to rates rising Friday — revised projections for the U.S. economy.

Early in the week, “bad” news piled on which, in turn, lowered expectations for the economy and pushed mortgage rates down:

Then, on Friday, two events revised the market’s expectations back higher:

When Chairman Bernanke talks, markets listen. His comments about the U.S. economy helped fuel that late-Friday surge in mortgage rates last week.

This week, the momentum could continue — depending on the data. 

There’s a lot for markets to digest this week including key inflation figures from the government; home value data from Case-Shiller; Fed Minutes from the Federal Reserve; and, the always-important jobs report due Friday.

Since April, mortgage rates have been on a downward trajectory and that may continue this week.  Or, it may not. If you own a home and haven’t talked to your loan officer about a refinance, now is as good a time as any — rates are at historic lows and could rebound at any time.

Last June, mortgage rates rose 1.125% in 10 days. Under the right circumstances, it could happen again.

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The Deal On Mortgage Rates This Week – August 23, 2010

Monday, August 23rd, 2010

Refi Boom stretches household dollarsMortgage markets stalled last week in back-and-forth trading as Wall Street grappled with weak housing data, falling builder confidence, and worsening jobs numbers nationwide.

Because markets were volatile, rate shopping was challenging.

Conforming mortgage rates did managed to make a new all-time low last Thursday but quickly gave up those gains. Most of Friday afternoon was spent in the red and, as a result, for the second straight week, mortgage rates failed to fall overall.

But, although last week’s action puts a damper on this summer’s mortgage rate rally, the Refi Boom is still going strong.

According to Freddie Mac, as compared to April 8 when mortgage rates touched their recent high-point, pricing is hugely improved across 3 popular loan products.

  • 30-year fixed : Then, 5.21%; Now, 4.42%
  • 15-year fixed : Then, 4.52%; Now, 3.90%
  • 5-year ARM : Then, 4.25%; Now, 3.56%

As an example of potential savings, a homeowner in Texas with a $250,000 30-year fixed rate mortgage would save $96 per month at today’s rates as compared to April’s.

Over the life of a loan, that’s a savings of $34,560.

This week, it’s unlikely that the Refi Boom will meet its end, but that doesn’t mean you should wait for rates to fall further. Mortgage rates tend to change quickly and without notice, and should rates rise, you may find that you’ve missed the market bottom.

If today’s rates appeal to your finances and budget, consider locking something in and moving forward.

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The Deal On Mortgage Rates This Week – August 16, 2010

Monday, August 16th, 2010

Retail Sales (August 2008 - July 2010)Mortgage markets worsened last week, putting a pause on the mortgage rate rally that dates to mid-April. Mortgage rates rose across Texas last week and home affordability suffered.

The Refi Boom remains in full effect, but rates are not as dazzling as they were a week ago.

It’s somewhat strange that mortgage rates rose last week given the heavy dose of negative-bending news.

Mortgage rates often to fall on such news, but last week, they rose. The biggest reason was weak demand on a new 30-year bond issuance from the government. In turn, that weakness spilled over into mortgage bonds, which pushed rates up.

This week, mortgage rates could rise or fall — it depends on how new data influences market sentiment.

  • Monday :  Home builder confidence survey
  • Tuesday : Housing Starts and Building Permits; Producer Price Index
  • Thursday : Jobless claims; 2 Fed members make speeches

Keep a close eye on the housing-related data early in the week. It’s widely believed that housing will lead the economy forward so a rebound in home builder confidence, or a jump in building permits, for example, should push rates even higher. Weakness

In the meanwhile, if you haven’t spoken with me about a refinance, consider reaching out this week. Rates are lower than they’ve ever been in history and more people are getting financing than the news would have you believe. You can’t know until you ask so make that call today.

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The Deal on Mortgage Rates This Week – August 9, 2010

Sunday, August 8th, 2010

Federal Reserve meets August 10 2010Mortgage markets remained flat last week on softer-than-expected economic data, punctuated by Friday morning’s weak jobs report. Conforming mortgage rates in Texas dropped on the news, making new, all-time lows.

Mortgage rates have been on an extended rally dating back to mid-April.

This week, there’s a lot of data and news due for release, the most influential to markets of which is the Federal Open Market Committee’s scheduled policy meeting.

8 times annually, the FOMC meets to discuss the nation’s monetary policy with respect to the current and projected U.S. economic conditions. Sometimes the FOMC takes action on the economy. Other times, it does not.

Either way, Fed meetings are market movers and it’s a gamble to float a mortgage rate ahead of an FOMC get-together.

There’s other stories to watch this week, too. Each has the ability to change mortgage rates.

  • Tuesday : FOMC meeting; Consumer Confidence data
  • Thursday : Jobless Claims
  • Friday : Retail Sales; Consumer Price Index

It’s a busy week on Wall Street, to be sure, and rate shoppers would do well to pay attention. Not only can the FOMC meeting change mortgage rates for every product in every market, but it can also change the outlook for mortgage rates going forward.

Rates are at an all-time low and low rates can’t last forever. We’re in the middle of a Refi Boom today and, soon, the boom will be over.

If you haven’t spoken to me about refinancing your home, or locking a mortgage rate, your best time to make the call is prior to the FOMC’s Tuesday afternoon adjournment at 2:15 PM ET. Mortgage rates will get jumpy leading up to the meeting, and will most certainly be volatile afterward.

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The Deal on Mortgage Rates This Week – August 2, 2010

Monday, August 2nd, 2010

Unemployment Rate 2007-2010 Mortgage markets improved last week, pushing mortgage rates lower for the 6th time in seven weeks.

Since April, rates in Texas have been on a downward path, spurring refinances in most markets and sparking the start of a Refi Boom.

Last week, 3 key stories played a role in falling rates:

  1. Demand was strong for U.S. government debt
  2. Emerging concerns of a Japan-style deflation in the U.S.
  3. Personal Spending since late-2007 was shown to be less than previously thought

Of the three, it’s the measured drop in Personal Spending for which rate shoppers and home buyers in Texas should watch. Drops in spending slow down the economy which, in turn, tends to pull mortgage rates lower.

Long-term, deflation could be a drag on rates, too. For now, though, it’s just a conversation among academics and economists.

This week, mortgage rates could move up or down — a lot hinges on the results on July’s Non-Farm Payrolls report.

More commonly called “the jobs report”, Non-Farm Payrolls hits the wires Friday at 8:30 AM ET. Markets are expecting a 75,000 net loss of jobs last month. If the actual number is higher, mortgage rates should rise. If the actual number is lower, mortgage rates should fall.

With the jobs numbers not due until Friday morning, expect choppy trading through Thursday’s market close. There’s a handful of economic data set for release including Personal Consumption Expenditures (Tuesday), Pending Home Sales (Tuesday) and Jobless Claims (Thursday). Each has the potential to move mortgage rates.

The Refi Boom is ongoing but when it ends, it will end in a hurry. If you’ve been thinking about a refinance, contact me about your options sooner rather than later.

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The Deal on Mortgage Rates This Week – July 26, 2010

Monday, July 26th, 2010

Existing Home Sales June 2009-June 2010Mortgage markets worsened last week for the first time in 6 weeks last week. Investors were pleased with corporate earnings reports and the European bank stress tests results.  Stocks gained on the news, and bonds lost.

Mortgage rates rose last week, but only slightly. Rate are still hovering near their lowest levels of all-time.

Of the bigger stories last week was Existing Home Sales. As reported by the National Association of Realtors®, sales volume was down in June and home supplies were up. But figures were a bit better than expected, giving some hope for housing.

Notably, the number of move-up buyers outnumbers first-timers and the national median home price rose, suggesting that mid-to-upper home prices are getting some support.

This week, the market gets additional two pieces of housing data to add to the mix:

  1. New Homes Sales (Monday)
  2. Case-Shiller Index (Tuesday)

Both will have an impact on mortgage rates. In general, better-than-expected data should cause rates to rise in Texas ; worse-than-expected data should cause rates to fall.

Also this week, there’s two consumer confidence reports, the Fed’s Beige Book, and late-in-the-week inflationary data.  Mortgage markets should remain volatile with so much news headed down the pipe.

It’s too soon to declare the current 3-month rally over, but it’s been 3 weeks since rates dipped. This can be a signal that mortgage rates have finally bottomed and that it’s time to lock your rate.

If you’re floating a mortgage rate, or thinking about a refinance, it’s time to get locked in. Rates may drop this week, but then again, maybe they won’t.  There’s little sense gambling on a bet as big as a mortgage.

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The Deal For Mortgage Rates This Week – July 19, 2010

Monday, July 19th, 2010

Housing starts June 2008 - May 2010Mortgage markets improved for the 5th straight week last week as consumer confidence waned and inflation data tamed. Investors ignored the news that 19 of 23 reporting S&P 500 companies beat their respective earnings estimates and sold off on stocks.

There’s concern about a potential economic slowdown for the months ahead and it may be well-founded.

Despite an improving jobs situation and booming retail sales, households are less optimistic about the future and so is the Federal Reserve. In its post-meeting minutes released last week, the Fed revised its U.S. growth estimates downward for 2010 and 2011.

For rate shoppers in Texas , this is excellent news.

Because of the weakness, conforming mortgage rates fell again last week, extending the current rally in rates to 16 weeks. Mortgage rates are lower than at any time in measured history.

This week, data will be housing market-heavy and mortgage rates could rise or fall.

  • Monday : National Association of Home Builders Index
  • Tuesday : Building Permits and Housing Starts
  • Thursday : Existing Home Sales

Strength in any, or all three, of these housing-related reports should push mortgage rates higher on higher hopes for the economy. Weakness, on the other hand, should have the opposite effect.

Overall, though, mortgage markets are trending better.  Momentum is in effect and refinance activity is soaring. That said, it doesn’t mean that rates won’t rise — they could absolutely. It just takes a change in market sentiment. And that could happen quickly.

Mortgage rates are artificially right now so even the slightest jolt could cause them to spike. It would be similar to what happened in June 2009 when rates rose 1.125% in just 10 days’ time. Therefore, if you’re shopping for a mortgage and like the rate you’ve been quoted, consider locking in as soon as possible.

There’s very little room for rates to fall further but a lot of room for rates to rise. Make sure you’re on the right side of that bet.

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The Deal on Mortgage Rates This Week | July 11, 2010

Monday, July 12th, 2010

Consumer Price Index May 2009-May 2010Mortgage markets improved again last week — if only barely — throughout a holiday-shortened week devoid of “major” data and market conviction.

Up-and-down trading characterized the week which ended with Texas mortgage rates slightly lower versus the week prior.

Mortgage rates have fallen in 4 consecutive weeks and are on an extended rally that dates back to mid-April.

This week, however, data returns and rates could reverse. Especially with inflation numbers are in play.

Inflation is the enemy of mortgage rates.

Inflation is bad for mortgage rates because mortgage rates based on the price of mortgage-backed bonds.  When inflation pressures mount, the demand for mortgage-backed bonds wanes and that pushes bond prices down which, in turn, pushed bond yields (i.e. rates) up.

There’s three pieces of inflation-related news this week.

The first inflation-related story is the Federal Reserve’s Wednesday release of the minutes from its last meeting. Now, when the Fed adjourned June 23, it said “underlying inflation has trended lower“. However, there was more to the conversation that what the FOMC released in its post-meeting statement.

Markets will be looking for clues.

Then, Thursday, the Producer Price Index is released. The Producer Price Index is a measure of business operating costs. When PPI is increasing, it means that “doing business” is more expensive — an inflationary situation. It’s inflationary because higher business costs are often absorbed by consumers in the form of higher prices for goods and services.

A rising PPI is usually bad for mortgage rates.

And lastly, Friday, the Consumer Price Index is released. The CPI measures the average American’s “cost of living”. Like PPI, when the Consumer Price Index is rising, mortgage rates tend to follow.

Other releases of import this week include Retail Sales and two consumer confidence surveys.

Last week, mortgage rates again made new all-time lows. If you haven’t checked with your loan officer about the possibility of a refinance, make that call this week.  Mortgage rates can stay low for a long time, but they can’t stay low forever. Lock your rate while you can.

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The Deal on Mortgage Rates This Week : July 6, 2010

Tuesday, July 6th, 2010

Unemployment Rate 2007-2010Mortgage markets improved last week as economic data revealed a slowing U.S. economy.

Major stock indices fell to 2010 lows in response to a weak jobs report among other data points, forcing worldwide investors into the relative safety of U.S. government-backed bonds.  This category includes mortgage-backed bonds and the extra demand helped to drop rates.

Once again, mortgage rates improved in Texas and Freddie Mac is reporting new all-time lows on three popular, conforming loan products:

  • The 30-year fixed rate mortgage
  • The 15-year fixed rate mortgage
  • The 5-year adjustable rate mortgage

Low rates mean low payments and you can’t know your options until you ask.

This week, mortgage rates may move slowly. There’s very little data set for release because markets were closed Monday in observance of Independence Day, and because the second calendar week of a month is traditionally data-slow.

Tuesday, a consumer confidence study is published; Thursday, jobless claims plus consumer credit levels hit; and, Friday, we’ll see wholesale inventories.  That’s about it.  None of these reports are particularly important but, in aggregate, the numbers can show whether the economy is expanding or contracting.

In general, evidence of an expanding economy should cause mortgage rates to rise.  In a contracting economy, rates are likely to fall.

Actual mortgage rates will vary by borrower, based on property type, credit score, and home equity, but if you haven’t talked to your loan officer about a refinance into today’s rates, it’s likely worth the time for a phone call.  Once mortgage rates start to reverse higher, they’re expected to reverse quickly.

You’ll want to act before that move occurs..

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