Mortgage News in the Carolinas
Posts tagged Mortgage Rates
What’s Ahead For Mortgage Rates This Week : January 3, 2011
0400 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.
What’s Ahead For Mortgage Rates This Week : December 13, 2010
0421 days
by Geoff Brown
in Weekly Review
Mortgage markets worsened last week as the U.S. economy showed additional signs of strength; and global demand for mortgage bonds slipped.
Conforming mortgage rates rose in Carolinas and around the country for the fifth straight week. It’s a streak that’s been marked by volatile pricing that’s rendered rate shopping difficult.
Last week, lenders published as many as 5 rate sheets per day where, by comparison, over the past 12 months, lenders have averaged closer to 2 rate sheets per day.
This week, with a bevy of data set for release and a Federal Open Market Committee meeting, expect volatility to remain high. Wall Street remains undecided on the future of the U.S. economy and there will be plenty on information on which to trade:
- Tuesday : Producer Price Index, Retail Sales
- Wednesday : Consumer Price Index, Housing Market Index
- Thursday : Housing Starts, Initial and Continuing Jobless Claims
Despite the high impact of this week’s economic releases, though, it will be Tuesday’s FOMC meeting that sets the tone for the mortgage bond market and, consequently, for mortgage rates in Charlotte.
The Fed’s last meeting in early-November provided the spark to the recent rise in mortgage rates. In the group’s post-meeting press release, it acknowledged growth while committing $600 billion to bond markets. The move triggered a massive bond sell-off that has since pushed conforming mortgage rates to a 5-month high.
The Fed adjourns at 2:15 PM ET Tuesday afternoon.
If you’re still floating a mortgage rate or have otherwise yet to lock, consider executing a rate lock agreement early in the week. Once the Federal Open Market Committee adjourns, mortgage rates could spike again. And, although rates are up since November, they remain historically low.
Understatement : Freddie Mac Says Mortgage Rates Rose Last Week
0431 days
by Geoff Brown
in Mortgage Rates
It’s been a wild 30 days for home affordability.
Since the Federal Reserve’s November 3 press release, in which our nation’s central banker committed $600 billion to bond markets, mortgage rates have leaped, moving quicker than the news can report them.
This week is a terrific example of that.
Today, newspaper headlines in Carolinas and around the country read that mortgage rates rose 0.06% on average over the past 7 days, and that average loan fees remain unchanged at 0.8 points. The data is based on Freddie Mac’s Primary Mortgage Market Survey, a weekly poll of more than 100 lenders around the country.
Unfortunately for Charlotte home buyers and other local rate shoppers, the Freddie Mac figures are low. Both mortgage rates and fees rose by more than what’s being reported.
Freddie Mac’s data is not real-time. It’s out of date for today’s pricing.
According to Freddie Mac, the survey’s methodology has it collecting rates from participating lenders between Monday and Wednesday, averaging the results, and then publishing that data Thursday late-morning. The problem there, as you know if you’ve shopped for a mortgage rate, is that mortgage rates change all day, every day.
Monday’s rates are unrelated to Wednesday’s rates, yet both are included and given equal weight by Freddie Mac. Some weeks, it’s not a problem; rates are relative static.
This week was not such a week.
Rates were jumpy Monday and Tuesday, rising and falling throughout the course of the day. Action like that is normal. But Wednesday, mortgage bonds put forth their third-worst daily showing of the year. Rates rose by as much as 3/8 percent between the market open and close, with the bulk of the sell-off coming late in the day. In other words, after the deadline of Freddie Mac’s survey.
Mortgage lenders accurately reported their rates to Freddie Mac, but they reported them before the market turn a turn for the worse.
The lesson is that mortgage rates are time-sensitive and can’t be captured by a weekly, average survey. When you need to know what mortgage rates are doing right now, the best place to check is with your loan officer. Otherwise, you may just get yesterday’s news.
What’s Ahead For Mortgage Rates This Week : November 22, 2010
0442 days
by Geoff Brown
in Weekly Review
Mortgage markets worsened last week as the U.S. dollar gave up ground in currency markets, and inflation concerns mounted. In response to the events, conforming mortgage rates in Carolinas rose for the third straight week.
Mortgage rates have now climbed by as much as half-percent since the start of the month, and Freddie Mac reports average loan fees to be higher, too.
The 7-month rally in rates may be nearing its end. The 30-year fixed rate mortgage is at a 4-month high after reaching an all-time low just 3 weeks ago.
The abrupt change in rates makes for an interesting study in expectations, and how they can influence a market.
Remember, inflation is bad for mortgage rates. Inflation devalues the dollar which, as a consequence, devalues repayments made to mortgage bond holders. As a result, when inflation is present, mortgage bonds tend to sell-off which causes mortgage rates to rise.
This is what’s been happening these past 3 weeks. However, we’re not in an inflationary environment. To the contrary:
- The Federal Reserve has said inflation is too low to be economically healthy
- Last week, the Cost of Living posted its lowest year-over-year gain in history
But mortgage rates are rising anyway. This is because global investors believe the Fed’s most recent market intervention — a $600 billion bond purchase program — will later lead to inflation. Just on the expectation, markets are behaving like inflation is already here.
This week is holiday-shortened, and rates should remain volatile. There’s a bevy of data including the Existing and New Home Sales reports, consumer confidence data, and the FOMC Minutes from the November 3 meeting.
If you haven’t locked a mortgage rate, consider locking one today. Rates have farther to climb than the fall.
