Mortgage News in the Carolinas
Posts tagged Mortgage Rates
Mortgage Rates Still Rising. Is This The End Of The Refi Boom?
0548 days
by Geoff Brown
in Mortgage Rates
Rock-bottom mortgage rates may be gone for good. This week’s Freddie Mac Primary Mortgage Market Survey shows in numbers what Carolinas rate shoppers have learned the hard way — mortgage rates are spiking.
During the 7-day period ending November 18, the average 30-year, conforming fixed rate mortgage jumped to 4.39 percent, an increase of 0.22% from the week prior.
And it’s not just rates that are soaring. The average number of points charged to consumers increased to 0.9 percent last week. For most of the year, that cost had been 0.7 percent.
One “point” is equal to 1 percent of your loan size.
With the sudden rise in mortgage rates, we have to question whether the Refi Boom is ending. Between April and early-November, conforming mortgage rates dropped more than a full percentage point and, during that time, a lot of Charlotte homeowners capitalized on the market. Refinance activity was strong; rates cut new lows each week.
Today, however, Wall Street sentiment is different. There’s a growing concern for the future of the U.S. dollar, and that’s making mortgage bonds less attractive to investors. As demand drops, so does the underlying bond’s price which, in turn, causes mortgage rates to rise.
Buy-sell patterns like this are common. The speed at which they’re changing is not. Mortgage lenders can barely keep up with the volatility, issuing up to 4 separate rate sheets in a day.
Therefore, if you’re shopping for mortgage rates, or wondering whether it’s finally time to join the Refi Boom, the time to lock is now. Mortgage rates should remain volatile through the New Year, at least. At what level they’ll be then, though, is anyone’s guess.
Mortgage Rates Spike On Strong Retail Sales Data. Could 4 Percent Rates Be Done?
0551 days
by Geoff Brown
in Retail Sales
If consumer spending is a key to economic recovery, the nation is on its way.
Monday, the Census Bureau released national Retail Sales figures for October and, for the second straight month, the data surged past expectation. Last month’s retail figures jumped 1.2 percent — the largest monthly jump since March — as total sales receipts climbed to a 2-year high.
Consumer confidence is rising, too. Though still below the long-term trend, confidence in the future up-ticked in October.
The current confidence reading is now double the low-point from February 2009.
It’s no surprise that both Retail Sales and Consumer Confidence are higher. They correlate in a common-sense-type manner. When consumers are more confident in the economy, they’re more likely to spend their money. This, in turn, leads to more purchases and rising retail receipts.
Unfortunately, for home buyers and rate shoppers in Charlotte , it also leads to rising mortgage rates.
Because consumer spending accounts for two-thirds of the economy, spending growth leads to economic growth. But it’s been a lack of growth that’s kept mortgage rates this low.
When the growth starts, the low rates end. It’s why mortgage rates have added as much as 1/2 percent over the past 10 days. Consider the recent “good news”:
- Retail Sales made a 2-year high in October
- Existing and New Home Sales showed big improvement in September
- Jobs growth returned in October
The days of 4 percent, 30-year fixed rate mortgages may be nearing its end. If you’re still floating a mortgage rate or thinking of buying or refinancing, consider the impact of rising rates on your budget.
The time to act may be sooner than you had planned.
What’s Ahead For Mortgage Rates This Week : November 15, 2010
0552 days
by Geoff Brown
in Weekly Review
In a holiday-shortened trading week, mortgage markets tanked last week, casting doubt on whether the bond market’s 7-month bull run will continue. Fears of inflation caused conforming mortgage rates to rise in Carolinas.
Last week marked the first sizable mortgage rate increase over the course of 7 days since April.
The biggest reason why rates rose last week was because of concerns that the Federal Reserve’s latest round of stimulus will devalue the U.S. dollar.
The Fed pledged an additional $600 billion to the bond markets two weeks ago and, to meet this obligation, the group will have to, quite literally, print new money.
It’s Supply and Demand. With more dollars in circulation, every existing dollar is worth less.
It’s also inflationary.
As the Fed’s pledge ties back to mortgage rates, remember that mortgage bondholders are paid in U.S. dollars. So, if those dollars are expected to be worth less in the future, we would expect mortgage bond demand to fall. And that’s exactly what happened last week — investors rarely clamor for assets whose value drops over time.
The falling demand dropped down prices, and pushed up yields. Mortgage rates spiked.
This week, the trend could continue. There’s a lot of inflation-signaling data on tap:
- Monday : Retail Sales
- Tuesday : Producer Price Index; Consumer Confidence; Housing Market Index
- Wednesday : Consumer Price Index; Housing Starts
- Thursday : Initial and Continuing Jobless Claims
Analysts are calling for lukewarm data this week; none of the releases is expected to show strong growth. If the analysts are wrong, look for rates to rise again.
Momentum is moving away from rate shoppers. If you’ve yet to lock in a rate, consider doing it now.
Better Credit Scores Get Better Mortgage Rates
0565 days
by Geoff Brown
in Credit Scoring
This week marks the start of the Refi Boom’s 7th month; rates have been falling since early-April 2010. Whether you’re looking to refinance or buy a home, however, know that not everyone will qualify for today’s low rates.
Mortgage approvals are primarily based on good income, good equity and strong credit, and, without all three, the best rates of the day remain out of reach. Now, you can’t always ask for a raise and equity is a function of the housing market, but you can do something about your credit score.
In this 4-minute segment from NBC’s The Today Show, you learn some credit basics to help propel your score higher:
- There’s no “quick fix” for credit. Time + Good Credit Behavior = Better FICOs.
- Pay every bill when it comes due. Even one late payment can damage your score.
- Don’t close old credit cards
Also among the segment’s advice is to stop worrying about whether rates have bottomed. Refinance today if it makes financial sense. Then, if, by chance, rates fall in the future, just refinance again. Don’t be greedy, we’re told.
