Posts tagged Mortgage Rates
What’s Ahead For Mortgage Rates This Week : July 26, 2010
Jul 26th
Mortgage 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:
- New Homes Sales (Monday)
- Case-Shiller Index (Tuesday)
Both will have an impact on mortgage rates. In general, better-than-expected data should cause rates to rise in Carolinas ; 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.
What’s Ahead For Mortgage Rates This Week : July 19, 2010
Jul 19th
Mortgage 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 Carolinas , 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.
What’s Ahead For Mortgage Rates This Week : July 6, 2010
Jul 6th
Mortgage markets are at the lowest level 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 Carolinas 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.
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..
What’s Ahead For Mortgage Rates This Week : June 28, 2010
Jun 28th
Mortgage markets improved last week in response to mostly negative data about the U.S. economy, and the Federal Reserve’s acknowledgement that Eurozone financial ills could cross the Atlantic.
Conforming and FHA mortgage rates fell last week, extending a rate rally that dates to early-April. Mortgage rates have fallen to several, new, all-time lows during this period and last week was no different.
The best rates of last week hit Thursday morning.
This week, mortgage rates should be volatile, and may rise, too. There’s a bevy of data due for release, and market volume will be light with the long weekend looming.
Monday, the Personal Consumptions Expenditures Price Index is published. More commonly known as “PCE”, the index is the Federal Reserve’s preferred inflation gauge. When inflation is running higher than expected, mortgage rates tend to rise.
Conversely, when inflation is running lower than expected, mortgage rates tend to fall.
Tuesday, the Case-Shiller Index will be released for April’s home prices, along with two consumer confidence reports. As with PCE, strength tends to lead mortgage rates higher and weakness draws them lower.
Thursday, the National Association of REALTORS® releases its Pending Home Sales Index for May and the Department of Labor releases initial and continuing jobless claims number.
Then, Friday, the Bureau of Labor Statistics publishes June’s jobs report, including the Unemployment Rate. This number is always a market-mover, but with the long vacation weekend looming, it’s expected that Friday’s volume will be light on Wall Street, creating extra volatility.
Mortgage rates may be erratic, in other words.
If you’ve been shopping for mortgages, you’ve been rewarded with falling rates. However, will rates cutting new lows almost weekly and expected to reverse soon, it may be a good time to lock up your savings.
Talk to your loan officer ASAP about locking in your rate.
A Simple Explanation Of The Federal Reserve Statement (June 23, 2010 Edition)
Jun 23rd
Today, in its first meeting in 5 weeks, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged.
The Fed Fund Rate remains within its target range of 0.000-0.250 percent.
In its press release, the FOMC said that, since April, “the economic recovery is proceeding” and that the jobs market “is improving gradually”. Business spending “has risen significantly”, too, with the exception of commercial real estate.
Today’s statement is the 8th straight press release in which the Fed shows optimism for the U.S. economy, dating back to June 2009. Since that time, the Fed has terminated all of the programs it created to support the economy through the economic crisis.
The recession is widely believed to be over.
And, although the Fed’s statement acknowledged economic growth, it did highlight lingering threats, too.
- Employers are still reluctant to hire new workers
- European debt concerns could spill-over to the U.S.
- Bank lending is contracting
Also, as expected, the Fed re-affirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period”, citing that “inflation has trended lower” recently.
Mortgage market reaction has been positive thus far. Mortgage rates in Carolinas are slightly improved post-FOMC.
The FOMC’s next scheduled meeting is August 10, 2010.
Making A Mortgage Rate Strategy Ahead Of The Fed’s Meeting This Week
Jun 22nd
The Federal Open Market Committee begins a 2-day meeting today, its fourth scheduled meeting of the year, and fifth overall.
The FOMC is the monetary policy-setting part of the government and its primary tool for that purpose is the Fed Funds Rate.
The Fed Funds Rate is the dictated rate at which banks borrow money from each other and, since December 16, 2008, the Federal Reserve has voted to keep the benchmark rate within a target range of 0.000-0.250 percent.
This is the lowest Fed Funds Rate in history. A rate near zero-point-zero percent renders borrowing by business and consumers cheap which, in turn, promotes investment and growth.
There’s no expectation for the Fed to change the Fed Funds Rate after it adjourns tomorrow, but that doesn’t mean consumers in Charlotte should expect mortgage rates to remain unchanged, too.
To the contrary, mortgage rates tend to be volatile when the FOMC is meeting. This is because the FOMC issues a press release after each meeting and in that press release, it comments on the economy’s unique threats, strengths and weaknesses.
When the FOMC speaks, Wall Street listens.
The words of the Chairman Ben Bernanke’s press release will be dissected and analyzed. A single mention of higher-than-expected inflation levels, or better-than-expected growth, and traders will rush to dump their bond positions in favor of equities.
This has a negative effect on mortgage rates.
Conversely, if the Fed is dour on the economy, mortgage rates may fall.
We can’t know for sure what the Fed will say or do tomorrow afternoon so if you’re floating a mortgage rate and wondering whether to lock, the safe choice is to lock prior to 2:15 PM ET Wednesday.
