Mortgage News in the Carolinas
Weekly Review
What’s Ahead For Mortgage Rates This Week : March 14, 2011
0433 days
by Geoff Brown
in Weekly Review
Mortgage markets improved last week in a week of few economic releases. The one major data point — Retail Sales — showed stronger-than-expected, but markets reacted mildly. The report’s strength was whispered in advance of the actual release; its reading validated Wall Street’s growing faith in the U.S. economy.
Most action last week revolved around the Middle East:
- Libya’s internal turmoil continued
- Bahrain clashes intensified
- Saudi Arabia’s citizens planned a Day of Rage
In response to these events, Wall Street continued its flight-to-quality. Mortgage-backed bonds are now at their best levels since early-February. Mortgage rates have improved 4 straight weeks.
Unfortunately for rate shoppers in Carolinas , the gains have been meager. Conforming mortgage rates have only dropped slightly.
This week, however, the market could move in either direction.
The biggest news on tap is the Federal Open Market Committee’s 1-day meeting, scheduled for Tuesday. The Fed is expected to leave the Fed Funds Rate near 0.000 percent, but that doesn’t mean that mortgage rates won’t change. The FOMC’s post-meeting press release will be closely scrutinized on Wall Street. Any changes in theme, tone, or message will cause mortgage rates to dart.
This week also marks the return of housing data with Housing Starts, Building Permits, and Homebuilder Confidence due for release. Housing is believed to be key to the economic recovery so strength in these reports should lead mortgage rates higher.
In addition, several inflation-related data sets will be released including Consumer Price Index and Producer Price Index. Inflation is generally bad for mortgage rates and with gas prices rising to a multi-year high, pressure will be on for mortgage rates to rise.
Lastly, there’s Japan.
The nation’s earthquake, tsunami, and (now) looming nuclear threat will have implications on the global bond market. Mortgage rates may benefit while the crisis remains unresolved.
If you’ve floated a mortgage rate over the past few weeks, it may be time to lock that rate down. Economic factors should be pushing rates higher, but geopolitics and natural disasters are keeping them low.
It’s a perfect time to commit to a loan.
What’s Ahead For Mortgage Rates This Week : February 14, 2011
0461 days
by Geoff Brown
in Weekly Review
Mortgage markets worsened terribly last week. Amid more reports of an improving economy and fears of pending inflation, mortgage rates skyrocketed to their highest levels since April 2010.
According to Freddie Mac, mortgage rates made their largest 1-week jump in more than a year last week, tacking on 0.24 percent and bringing the average national 30-year fixed mortgage rate up to 5.05%.
In some markets, rates are even higher.
Since bottoming out in Freddie Mac’s November 11 survey, conforming, 30-year fixed mortgage rates are now higher by close to a full percentage point. Home buyers in Charlotte and across the nation have lost more than 10% of their purchasing power during that time.
Rates have also been on a historic run higher, increasing over 9 consecutive days for the first time in almost a decade. That streak ended Friday with rates dropping slightly, and rate shoppers are hopeful the momentum lower continues into this week.
It’s not likely. The week is loaded of housing data and housing has been trending better. More strong figures will bolster stock markets at the expense of bonds, driving mortgage rates higher for the 4th week in a row.
In addition, inflation-related figures will be released. That, too, can have a negative impact on mortgage rates.
- Monday : NAHB Homebuilder Confidence Survey
- Tuesday : Retail Sales, Consumer Confidence
- Wednesday : Building Permits, Housing Starts, Producer Price Index, FOMC Minutes
- Thursday : Consumer Price Index
Markets should increase in volatility as the week progresses because of the looming 3-day weekend. Volume will be light Friday in advance of President’s Day.
If you haven’t yet locked your mortgage rate, the time to act is soon — possibly now. Mortgage rates are well off their historical lows, but still relatively inexpensive. Before long, that may no longer be the case.
What’s Ahead For Mortgage Rates This Week : January 10, 2011
0496 days
by Geoff Brown
in Weekly Review
Mortgage markets gained last week as a combination of safe-haven buying and an improving economic outlook attracted new buyers.
Last week marked the second straight week that mortgage rates fell in and around Carolinas. Rates had risen over the previous 7 weeks.
According to Freddie Mac’s weekly mortgage rate survey, the national average rate for a 30-year fixed rate mortgage is 4.77 percent with an accompanying 0.8 points required.
This week, with no new data due for release, look for last week’s two biggest stories — jobs and debt — to carry forward. The first such story relates to jobs.
Friday, the Bureau of Labor Statistics released its monthly Non-Farm Payrolls report. Consensus estimates were for 150,000 net new jobs created December, with “whisper numbers” pegging the number as high as 250,000. Mortgage rates increased on the chance that the rumors were right.
It turned out, they were not.
Accounting for revisions to past months’ data, December’s jobs data was in-line with expectations, resulting in a mortgage rate retreat that lasted all day Friday. That momentum should carry forward into the early part of this week.
The second story is tied to safe-haven buying.
The U.S. mortgage market benefited from growing concerns within the Eurozone that Portugal could default on its debt. The story emerged three weeks ago when Portugal’s debt was downgraded. It picked up steam last week after a weak debt offering. It’s a similar beginning to what transpired in Greece last spring.
Mindful of their respective risk, worldwide investors chose to shift risk toward safer asset classes which includes, of couse, mortgage-backed bonds. This week, those risks will remain and the flight to quality assets should continue. Mortgage rates will benefit.
Given the likelihood that mortgage rates will fall this week, it may be tempting to let your mortgage rate float. That strategy could prove foolish.
Mortgage rates fell to historic lows in 2010 and sprung higher at the first possible opportunity. Rates remain at ultra-low levels and have lots of room to rise. This week, consider buying on the dip. It may be the last chance you get.
What’s Ahead For Mortgage Rates This Week : January 3, 2011
0503 days
by Geoff Brown
in Weekly Review
Mortgage markets improved last week during a snow- and holiday-thinned series of sessions on Wall Street. Mortgage bonds improved on year-end profit-taking, mostly, leading conforming mortgage rates in Carolinas lower.
Last week marked the first calendar week in which mortgage rates dropped since early-November, a pleasing development for rate shoppers and home buyers. Falling rates means lower monthly mortgage payments.
But don’t expect for rates to improve again this week, however. Last week’s gains were the result of extremely low trading volume and a close-out of 2010 mortgage bond positions. With markets re-opened for 2011, and Wall Street back at full volume, mortgage rates may resume rising.
There will be a lot of data and information on which for mortgage bonds to trade, too.
The week starts with a growth report from the U.S. manufacturing sector. The Institute for Supply Management’s monthly report has shown improvement over 16 straight months, and Monday’s report is expected to show the same. Because manufacturing is key in U.S. economy, a stronger-than-expected value could send stock markets higher, and mortgage rates, too.
Then, Tuesday, the Federal Reserve releases the minutes from its December meeting. There won’t be policy changes transcribed in the minutes, but Wall Street will scrutinize its pages for clues on the economy. A bullish bias from the Fed will push rates higher. A bearish bias will drag rates lower.
And lastly, Friday, the government will release its Non-Farm Payrolls report for December. This is a major market-mover because of how closely jobs are tied to the economy overall. Plus, Fed Chairman Ben Bernanke speaks Friday — another risk to mortgage rates.
The gravity of this week’s economic releases and speeches should make shopping for a mortgage difficult. Stay in close touch with your loan officer about mortgage rates and how they’re moving. And if you see a rate you like, lock it.
There’s no promise rates will ever go lower.
