Mortgage Rates Grind Higher on Positive News – March 9, 2012
There are two big pieces of news today that could impact mortgage rates: 1) the Greek debt swap was successful, 2) this morning’s employment report was stronger than anticipated. Normally we would expect to see rising mortgage rates with two pieces of positive news. However, rates are not rising as much as I anticipated.
The Greek debt deal was completed last night, and somewhere around 85% of investors agreed to a swap. I believe that after collective action clauses are used to compel others to comply with the deal, participation will be somewhere around 95%. I still contend that Greek will need to leave the Eurozone and ultimately go back to using the Drachma. The fact of the matter is that Greece is in the midst of a depression, and will have to enact more austerity measures to comply with terms of a forthcoming bailout. Austerity+economic depression=no good. I think this situation is bound to deteriorate even more in the coming months. Nevertheless, the can has been successfully kicked down the road for the time being.
This morning’s payroll report was stronger than anticipated. Unemployment was stagnant at 8.3%, but 227k jobs were added in February. There were also upward revisions to December and January’s jobs reports. Expectations were for +210k jobs, so this is a fairly positive report. However, it is worth noting that 12.8 million Americans are unemployed, and 5.4 million have been out of work for six months.
As I am writing this, mortgages have started to sell off more rapidly. I think that we are ultimately going to see a slow grind toward higher rates over the coming weeks.
A Few of Our Popular Rates and Products*:
|Mortgage Product||Mortgage Rates||APR|
|30 Year Fixed Conventional Mortgage||3.625%||3.741%|
|20 Year Fixed Conventional Mortgage||3.500%||3.661%|
|15 Year Fixed Conventional Mortgage||3.000%||3.060%|
|30 Year Fixed FHA Mortgage||3.625%||4.975%|
|15 Year Fixed Conforming Jumbo||3.500%||3.670%|
|30 Year Fixed Conforming Jumbo||4.375%||4.474%|
|5/1 Adjustable Rate Mortgage||2.375%||2.752%|
|5/1 Adjustable Rate Conforming Jumbo Mortgage||2.750%||2.711%|
***Mortgage change frequently. These rates were quoted at 1:10 A.M., on March 9, 2012. Call 877-868-2503 for more details.***
Today’s News, Links, and Things I’m Reading:
BLS: Nonfarm payrolls rose by 227,000 in February. The unemployment rate remained at 8.3%.
Reuters: Greece Averts Immediate Default, Markets Skeptical. I think skepticism is the word of the day. I don’t think this is the last we’ve heard on this matter.
Felix Salmon: The Employment Recovery is Real. We’re heading in the right direction, but I still don’t think the possibility of renewed recession is off the table. I remain unconvinced.
Barry Ritholtz: Why is iPad So Much More Dominant Than iPhone? Really good discussion in the comments section here.
Government Accountability Office: On the Capital Purchase Program: “As of January 31, 2012, 341 institutions had exited CPP, almost half by repaying CPP with funds from other federal programs.”
ProPublica: What the Frack is in That Water? I don’t think I’m getting enough hydrotreated light distillate in my water. Bring on the fracking!
Chicago Tribune: Lowering Our Expectations for Forclosure Settlement. Honestly, my expectations could not be any lower.
Dave Dayen: The Pernicious “Foreclosures are Good” Meme. I find this meme to be incredibly irritating.
Vanity Fair: Ghosts in the Newsroom. Can the Washington Post be saved?
L.A. Times: Banks Foreclosing on Churches in Record Numbers. According to the article, 138 churches were sold by banks in 2011. Apparently they are mostly purchased by other churches. I guess that makes sense.
Boston Real Estate Now: All the Costs of Buying and Selling.
* All rates shown are for 30 day rate locks. Longer locks are available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 1 point, a $495 application fee, $400 appraisal fee, $799 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $400 appraisal fee, $799 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $450 appraisal fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants with 720 or higher FICO and 80 LTV and are subject to mortgage approval with full documentation of income. All rates are subject to change without notice. All rates shown are for 30 day rate locks with 1 point unless otherwise noted.