Mortgage News in the Carolinas
Posts tagged Fed Minutes
What’s Ahead For Mortgage Rates This Week : May 23, 2011
0260 days
by Geoff Brown
in Mortgage Rates
Mortgage markets were unchanged last week, despite improving on four of five days. Economic data was worse-than-expected almost across the board, but neither FHA nor conforming mortgage rates in Carolinas budged.
Instead, markets grappled with the just-released Fed Minutes which weighed heavily on investors and on Wall Street.With the release of the minutes, it’s increasingly clear that the Federal Reserve will end its support for bond markets on schedule in June, and that a Fed Fund Rate hike is possible within the next 12 months.
Not surprisingly, the date of the Fed Minutes release — Wednesday — was the singular “down day” for mortgage markets last week.
After falling for 4 straight weeks, Charlotte mortgage rates appear to have troughed. This week they could rise, and there’s no shortage of data on which for bonds for trade.
- Tuesday : New Home Sales; Speeches from Fed’s Plosser and Bullard
- Wednesday : Durable Goods; FHFA Home Price Index
- Thursday : GDP; Initial Jobless Claims
- Friday : Core PCE; Pending Home Sales; Consumer Sentiment
There’s other forces on markets, too. First, there are 3 bond auctions — a 2-year, a 5-year, and a 7-year. Weak demand for any of the three will lead mortgage rates higher.
And, second, this is a holiday week. Memorial Day is next Monday and, with the 3-day weekend ahead, expect large numbers of Wall Streeters to skip out on Friday (and likely part of Thursday, too). As the week concludes, therefore, bond volume will thin, amplifying mortgage rate movement — up or down.
If you’re shopping for a mortgage, it’s a good time to look at locking in. As the week progresses, mortgage rates should become less predictable and more volatile.
What’s Ahead For Mortgage Rates This Week : April 11, 2011
0302 days
by Geoff Brown
in Mortgage Rates
Mortgage markets worsened last week as energy costs remained high, and jobs data looked strong. The safe haven buying that characterized the March mortgage market has subsided.
it’s driving mortgage rates higher across Carolinas.
Conforming and FHA mortgage rates rolled back 8 weeks worth of improvements last week and are now back to mid-February levels. The rise in rates is hurting refinance activity and home affordability.
The biggest story from last week figures to carry forward into this one — the Federal Reserve’s take on inflation.
In the minutes from its March meeting, the FOMC was shown to have discussed the possibility of raising the Fed Funds Rate ahead of schedule, and to be watching near-inflation closely. Both developments are in response to a growing economy with rising price pressures.
Mortgage rate shoppers should take note.
Inflation is a mortgage-rate killer. When inflation is present in the economy, all things equal, mortgage rates rise. Sometimes by a lot. And, usually, just the expectation of inflation is all it takes to make mortgage rates jump.
That’s what we saw last week.
This week, keep a close watch on new inflation-related data set for release. This includes Tuesday’s Retail Sales data, Wednesday’s Producer Price Index, and Thursday’s Consumer Price Index. Each release can potentially move mortgage rates although, if recent trends are an indication, expect for rates to rise.
Mortgage rates in Charlotte remain historically low. If you’re shopping for a mortgage, consider locking as soon as you can.
Fed Minutes Help Push Mortgage Rates To 4-Month High
0438 days
by Geoff Brown
in FOMC Minutes
The Federal Reserve released its November 2-3, 2010 meeting minutes Tuesday afternoon. Mortgage rates in Carolinas have been on the move since.
The Fed Minutes is a comprehensive review of Federal Open Market Committee meetings; a detailed look at the debates and discussions that shape our country’s monetary policy. The report is published 3 weeks to-the-day after the FOMC adjourns.
Fed Minutes add depth to the briefer, more well-known “statement” to the markets which is issued upon adjournment. As a comparison:
- The November 3 statement contained 497 words
- The November 3 meeting minutes contained 6,623 words
If the Fed Statement is the executive summary, the Fed Minutes is the novel. And, the extra words matter.
When the Federal Reserve publishes its minutes, it gives clues about the groups next policy-making steps. For example, in November’s minutes, it’s revealed that the Fed discussed setting inflation targets for the economy; holding occasional policy briefings for the press; and, working to set yields on instruments such as the 10-year Treasury note.
In addition, the Federal Reserve acknowledged a video conference hosted October 15, the second such “unannounced” meeting of the year. The other was May 9, 2010.
Bond markets have not taken kindly to the Fed Minutes. The minutes show a propensity toward Fed “action”, most of which markets believe to be inflationary. Inflation leads to higher mortgage rates and that’s exactly what we’ve seen.
As compared to Tuesday morning, mortgage applicants in Charlotte are finding conforming and FHA mortgage rates to be higher by as much as 0.375 percent. In “real life” terms, assuming a 30-year term, that’s an extra $264 in annual mortgage payments per $100,000 borrowed.
If you’re still rate shopping, consider getting locked today. As a result of the recent shift, mortgage rates are now at a 4-month high.
Fed Minutes Edge Mortgage Rates Higher
0482 days
by Geoff Brown
in FOMC Minutes
The Federal Reserve released its September 21, 2010 meeting minutes Tuesday afternoon. Mortgage rates in Carolinas are slightly higher today.
It’s unwelcome news for this season’s home buyers, and existing homeowners with plans to grab lower rates. Mortgage rates made new lows last week and may have reached a turn-around point.
The “Fed Minutes” is published 8 times annually, and is the official meeting recap for the Federal Open Market Committee. Similar to the meeting minutes released after a corporate conference or condo association gathering, the Fed Minutes details the conversation and debate between meeting attendees.
Minutes are the lengthy companion to the Fed’s brief, post-meeting press release.
Because of its content, the Fed Minutes is closely read by Wall Street and economists. It’s insight into the talk that shapes our nation’s monetary policy and, within the text, there’s often clues about the Fed’s next move.
Here’s some of what the Fed discussed last month:
- On inflation : It’s running at lower-than-optimal levels
- On housing : Post-tax credit, housing stalled in July
- On stimulus : The Fed may intervene in open markets within the next few months
The over-riding theme within the minutes was that the U.S. economy is growing a steady pace, albeit slower than what’s optimal. The Fed is prepared to push things along if the economy slows further and news like that is helping stock markets.
Bond markets are losing. Rates are rising.
For now, mortgage rates hover near all-time lows. If you haven’t locked a mortgage rate yet, your window may be closing. Once the economy turns around for certain, mortgage rates will be among the first of the casualties.
