Archive for the ‘Mortgage Rate Watch’ Category

Mortgage rates went into the weekend at new record lows last Friday. This was the ALERT we published on Rate Watch... ALERT : There are some lenders out there, if the APP--to--CLOSING process is flawless, where a borrower could close at 4.25% right now, without paying more than 1 pt. But you're loan file is gonna have to be a real slam dunk. You must be the definition of "well-qualified". Mortgage rates moved lower as a result of continued high demand for agency mortgage-backed securities. We have described this demand as a "flight to safety" , but from another perspective, what it really boils down to is the highly-competitive loan origination environment. READ MORE A flight to safety happens when investors are nervous about owning risky assets like stocks, but do not...(read more)

2010 has been the year of "near record low" mortgage rates. Regular readers are probably used to hearing us say: "We're bouncing along just above record lows" "Lenders won't go any lower" "The rewards of floating don't outweigh the risks of floating" "It would take a serious economic downturn for mortgage rates to go lower" Well. MBS prices are at all-time highs (AGAIN) and I think we can officially say mortgage rates are priced at their best levels ever. If not, we're pretty darn close! Major lenders were actually buying 4.25% note rates today! As far as I remember, that was the lowest rate I saw on a rate sheet last year (that didn't cost 3 points). There were some days last year when 4.125% loans were traded, but seldom...(read more)

Despite a much better than expected advance read on fourth quarter GDP (consensus was 4.5%, actual 5.7%), the week ended on Friday with mortgage rates near the best levels of the month. Usually, better than expected economic data causes stocks to move higher and bond yields increase. But that is not what happened. The lack of a logical reaction in the interest rate market implies investors are anticipating a slower read on GDP in 1Q 2010, especially after Q4 2009 numbers were boosted by less contraction as opposed to more growth ( READ MORE ). On top of that, this was first read on Q4 2009 GDP, there are still two revisions to come that many believe will adjust Q4 GDP to a level worse than originally reported. Mortgage rates ended the week with the most aggressive lenders offering 4.75% at...(read more)

Mortgage rates ended last week at their best levels since early December. Then rates rose on Monday, gained back lost ground on Tuesday only to give back those improvements after the FOMC statement on Wednesday, weakness then extend over into Thursday. This left the par 30 year fixed mortgage rate in the 4.875 to 5.125 range. Today, all eyes were on the release of Advance 4th Quarter GDP. At 8:30 am the US Department of Commerce released the advance read on 4th quarter Gross Domestic Product. This is the first of three 4th Quarter GDP release, today’s report will be revised in February and March. GDP is the broadest measure of total economic activity and includes every sector of our economy. It is basically our economy’s score card. A rapidly growing economy usually leads to inflation...(read more)

Mortgage rates rose after the release of the FOMC statement yesterday. Whiel the interest rate sell off wasn’t substantial, MBS prices declined enough to force lenders to reprice for the worse. Overall there were only small adjustements made to the FOMC statement. The vote on whether to raise or hold steady the Fed Fund rate was not unanimous though. Thomas Hoenig, the Kansas City Fed Bank President, voted to raise short term interest rates while all others voted to leave rates unchanged. He believes the current 0 to 0.25% range for the Fed Fund rate was no longer warranted due to an improving economy. He also believes that inflation is a bigger concern than many believe. To slow inflation Hoenig believes interest rates need to be moved higher. For more on the FOMC statement and President...(read more)

Mortgage rates improved a few basis points yesterday. Lenders were somewhat subdued in passing along interest rate improvements though. This is a function of a few reasons. First, mortgage-backed securities prices have held to a tight range over the course of the week. The second reason is a bit more obvious, the FOMC meeting ended today at 2:15pm. This was a major market event, so it makes sense that lenders would be defensive ahead of a scheduled event that had the potential to move interest rates in either direction. Before getting to the impact of the FOMC on mortgage rates, allow me to recap the day's economic data releases. Early this morning, the Mortgage Bankers’ Association released their weekly applications index. The MBA survey covers over 50 percent of all US residential...(read more)

There isn’t too much to report from yesterday. After a weak open, prices of mortgage backed securities moved sideways before eventually closing the day where they began. While there were no reports of lenders repricing for the worse, mortgage rates did move higher compared to last Friday's levels. Today is day one of the Federal Open Market Committee’s two day meeting where our nation’s monetary policy is set. These meetings occur approximately every six weeks and are considered one the most influential events for all markets. At these meetings, the Fed sets the federal funds rate which serves as a benchmark for all other rates. Currently, the fed fund rate sits in a range of 0% to 0.25%, it is widely accepted that there will be no change to that rate. On day one, nothing...(read more)

Mortgage rates hit their lowest levels in over a month yesterday after mortgage backed securities prices rallied to new 2010 highs. These improvements were triggered by a stock sell off which forced investors to reallocate funds into less risky assets like US Treasuries. Panic in stock markets was prompted by a proposal from the Obama administration which limits the size of banks and their risk taking/profit making strategies. While details have yet to be provided, the stock market did not react well to this news. Bank stocks sold off rapidly as market participants scrambled to make sense of the regulatory proposal. This event turned out to be very supportive of interest rates. As MBS price gains held into the trading session close, many lenders reissued rate sheets which lowered consumer borrowing...(read more)

Yesterday, mortgage backed securities closed at their highest prices since early December which allowed lenders to offer the best mortgage rates seen in 2010. These improvements have extended over into today after some unexpected news from the Obama Administration. But first a recap of morning economic data… First to be released was weekly jobless claims. This report gives us several readings on the number of Americans who filed for unemployment benefits in the previous week: Initial claims totals the number of first time filers. Continued claims totals the number of Americans who continue to file for unemployment benefits due to an inability to find a new job. Extended benefits totals the number of Americans who are receiving emergency benefits beyond the traditional time allowed to...(read more)

After making noticeable improvements toward the end of last week, mortgage rates failed to extend positive progress yesterday. After a weak open, mortgage backed securities prices traded in a narrow range for most of the day. Despite MBS prices moving lower at the open, lenders were still able to offer aggressive mortgage rates, they were actually at their most aggressive levels since early December. Economic data picked up today... First out was the Mortgage Bankers Association Mortgage Application Activity report. This MBA survey covers over 50 percent of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans. A rising trend of mortgage applications indicates an increase...(read more)