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  1. Current Mortgage Rates are Rising – Wednesday, March 14, 2012

    By on March 14, 2012

    Mortgage rates are rising rather swiftly right now.  The increase is probably not the result of any one particular piece of news, but more likely the cumulative effect of the last couple months worth of improving economic data as well as the temporary resolution to the debt problems in Greece.  For quite some time now we’ve been saying in this space that the stage is set for rates to increase, and we are finally seeing that happen.  Although I am still somewhat pessimistic about our forward economic prospects, there is seemingly little on the horizon that will put downward pressure on rates.

    Yesterday the Fed recommitted to keeping interest rates low until late 2014 and gave no indication as to the possibilities of further quantitative easing.  I think that further stimulus is a definite possibility, especially if rising oil prices put the brake on the economic recovery.

    Another thing to consider is this: although not a hard and fast rule, as mortgages rates rise, home prices fall, and vice versa.  Housing is one of the main headwinds that the economy is facing right now.  If rates spike we could see the housing sector become even more depressed.  Refinance activity would essentially grind to a halt, and already tepid purchase demand could diminish even further.  It is not inconceivable to me that the Federal Reserve would buy mortgage backed securities in an effort to keep mortgage rates low to buoy the housing market even if the economic recovery continues.  Of course, the Fed has to be very careful that their actions do not cause inflation, especially given the scrutiny on their actions in recent years.

    Anyway, if you are looking to refinance your home or purchase a new one, you would probably do well to act swiftly.  There’s no telling what the future holds, but we may have left record low mortgage rates behind for good.

    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 12:42 P.M., on March 14, 2012. Call 877-868-2503 for more details.***

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    Category: Mortgage Rates

  2. Current Mortgage Rates for Monday, March 12, 2012

    By on March 12, 2012

    Mortgage Rates increased last week, although not as much as I anticipated.  They rose primarily as a result of another decent (but not excellent) jobs report on Friday, and the news that the Greek debt swap was successful on Thursday.  The stage is now set for rates to increase.  I expect that the increases will come in fits and starts, with improvement here and there, but I think there will be a net increase in rates over the next couple of months.

    This week we have a good deal of economic events, including a number of treasuries auctions at the beginning of the week, Retail Sales and an FOMC announcement on Tuesday, a Bernanke speech on Wednesday, Jobless Claims and Producer Price Index on Thursday, and finally, Conumser Price Index, Industrial Production, and Consumer Sentiment on Friday.

    One of the biggest wildcards for the future of mortgage rates is Fed policy moving forward.  Unfortunately, I do not think that we will see much clarification from the Fed this week. The Fed seems to be in a quandry.  The economy appears to be slowly improving, but unemployment is still very high, and the housing market continues to anchor the economy.  The Fed has yet to back away from more quantitative easing, and I do not believe they will do so this week.  They want to keep that card on the table in case the economy takes a turn for the worse, something that I still feel is a possibility despite rosier economic data of late.

    For now, rates remain close to all-time lows, but there may not be a lot of time left to take advantage.

    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 12:45 A.M., on March 12, 2012. Call 877-868-2503 for more details.***

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    Category: Mortgage Rates

  3. Mortgage Rates Grind Higher on Positive News – March 9, 2012

    By on 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.***

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    Category: Mortgage Rates

  4. Current Mortgage Rates for Thursday, March 8, 2012

    By on March 8, 2012

    Stocks are rallying this morning, at least partially on expectations that the Greek debt swap is going to succeed today.  The Greeks need to get at least two thirds of their bond holders to agree to swap old debt for new debt, taking a haircut in the process.  According to a Bloomberg article this morning, they have at least 60% of the investors committed to a swap.  If the swap succeeds, the Greek debt can will be kicked down the road for at least the time being.  I expect Spain will become the European problem du jour shortly, but a temporary resolution to the Greek problem could clear the way for rates to rise.  The deadline for the deal is 3PM today.

    The thing that could really cause mortgage rates to rise is tomorrow’s employment report.  Initial weekly unemployment claims data was weaker than expected today, and I do not anticipate a huge number tomorrow.  But if the Greek swap succeeds and we get a big employment number tomorrow, we could see rates spike.  I think it is unlikely, but there is a non-zero chance that it happens.

    This afternoon is going to be interesting, and tomorrow morning will be even more interesting.  If you’re waiting on locking in a loan, you may want to do it now.

    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 8, 2012. Call 877-868-2503 for more details.***

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    Category: Mortgage Rates

  5. Current Mortgage Rates for Wednesday, March 7, 2012

    By on March 7, 2012

    Yesterday saw the largest stock market sell-off of 2012, and mortgage rates improved as a result of the corresponding rally in mortgage backed securities and treasury bonds.  The sell-off in equities was largely driven by an expectation of slowing growth in China, the possibility of war in the middle east, and uncertainty surrounding tomorrow’s Greek debt swap.  Today we are seeing an early rally in stocks, partially as a result of the favorable ADP employment report this morning, and party as a response to yesterday’s sell-off.

    I don’t think we are going to see substantial market movement today because I think that everyone is holding their breath waiting for tomorrow’s Greek debt swap.  The Greek government now appears to be using the explicit threat of a default to get bondholders to go along with the debt swap.  There are too many complicating factors involved in the potential swap (English law bonds, Greek law bonds, what will trigger CDS, etc.) to really guess as to what will actually happen.  Whatever happens will not likely fundamentally alter Greece’s problems, and they will likely have to leave the Euro, but the outcome from tomorrow could change the direction of the markets in the short term.

    Looking past the debt swap, there is the employment report scheduled for Friday, and that also has the potential to cause significant market movement.  So if you are looking for a mortgage, note that we could see a large swing in rates in either direction by the end of the week.

    Some of Our Most 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 3.125% 3.331%
    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 fluctuate all the time. The above rates were quoted at 1:00 A.M., on March 7, 2012. Call 877-868-2503 for more details.***

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    Category: Mortgage Rates

  6. Current Mortgage Rates For Tuesday, March 6, 2012

    By on March 6, 2012

    There are no economic reports scheduled to be released today, so most market movement that we see will be a result of other news items, and there are a few issues that are causing stocks to sell off while mortgage backed securities and treasury bonds rally.  Generally speaking, those issues are rising tensions in the middle east, uncertainty other Thursday’s Greek debt exchange, and the apparent economic slowdown in China.

    Considerable uncertainty surrounds the upcoming Greek debt swap.  If less than 66% of Greek’s debt holders agree to swap their old debt for new debt (taking a considerable haircut in the process), there is no deal.  If more than 75% of Greek debt holders agree, there is a deal and a cramdown, if more than 95% agree, there is a deal and no cramdown.  If the number falls between 66%-75%, it is somewhat unclear what happens.  In any case, there is still the possibility that we see some sort of disorderly Greek default, and that has the markets spooked this morning.

    China announced this morning that it would cut its annual GDP target from 8% to 7.5%.  This is the first cut in target growth in eight years.  Slowing growth in China will likely have an adverse impact on the worldwide economy, and this is also roiling markets today.

    Lastly, there is the possibility of conflict between Israel (and maybe the United States) and Iran looms over everything. Tensions have been ratcheted up over the past several weeks and war is a distinct possibility.  War in the middle east could cause the price of oil to skyrocket (especially if the Straight of Hormuz is closed).  This would put a huge damper on the global economy.

    In light of all the bad news, we are seeing mortgage rates fall today.  The possibility remains that this is a temporary reprieve.  If the Greek swap goes well on Thursday, and positive employment numbers come out on Friday, we could give back all the ground we are making up today and more.  I still think that the stage is set for rates to increase over the next couple of months because the U.S. economy appears to be slowly improving.

    Some of Our Most 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 3.125% 3.331%
    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 fluctuate all the time. The above rates were quoted at 1:12 A.M., on March 6, 2012. Call 877-868-2503 for more details.***

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    Category: Mortgage Rates

  7. Current Mortgage Rates for Monday, March 5, 2012

    By on March 5, 2012

    There are two big events that will dominate economic headlines this week and set the stage for the direction of mortgage rates for the near future.  The first is this month’s payroll report, due at the end of the week.  Employment numbers have been slowly improving over the past few months, and a bigger than anticipated number could cause rates to spike.  The consensus prediction on Bloomberg is for a gain of 204,000 jobs in February.

    The second big event involves – surprise – Greece.  This Thursday is the due date for Greece’s swap-offer deadline.  75% of private borrowers need to vote in favor of the deal in order for it to move forward.  The details are complicated, and quite frankly, somewhat boring, but the point is this: there is the potential for a major market moving event on Thursday.  It is very difficult to predict what will happen here, but if this deal falls apart, there will be major ramifications on our financial markets.

    I think the whole week will be a run-up to these two events, and I don’t believe that we will see much movement in rates until Thursday.  We will see the standard fluctuations in rates, but I think they will remain largely range bound as everyone holds their breath for Thursday.

    While we do not know what is going to happen, there is the distinct potential that we could see higher rates at week’s end.  If you’re looking to get a new mortgage in the near future, it may make sense to lock your rate now to avoid the risk of rising rates.

    Some of Our Most 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 3.125% 3.331%
    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 fluctuate all the time. The above rates were quoted at 1:10 A.M., on March 5, 2012. Call 877-868-2503 for more details.***

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    Category: Mortgage Rates

  8. Mortgage Rates Maintain Higher Bias

    By on March 5, 2012

    Last week we made it clear that the bias or pressure for mortgage rates had switched from downward to upward.  This was a reversal of the trend that has lasted for well over a year.  This week begins with further evidence of that reversal.  After one hour of mortgage-backed securities (MBS) trading this morning investors appear interested in putting their money elsewhere.  If the factory orders report and the ISM Services Index report that are released at 10 AM ET show positive economic growth in the US, the early trend could accelerate.

    Further evidence that the bias for mortgage rates has changed is seen when we examine the trading in MBS this morning and the early global economic news.  MBS have dropped slightly this morning despite reports out of China suggesting their economy is slowing and reports from Greece that early exchanges of existing bonds for new, lower yielding bonds is going slowly.  With negative economic news outside the US as significant as this, MBS would normally react positively—yet not today.

    So we have turned a corner where US economic news is the primary driver of the markets and mortgage rates. This week in addition to today’s economic reports the key news will come Wednesday and Friday with the ADP Employment Change Report and the Non-Farm Payrolls report respectively.  Now the question is can the US economy deliver?  The first chance comes now…

    Factory Orders for January—Down, but less than expected

    ISM Securities—Much higher than expected

    With both reports for today showing strength, the bias toward increasing mortgage rates is likely to hold through Wednesday.  The only potential disrupter of this forecast would be news coming out of the meeting between Israeli Prime Minister Benjamin Netanyahu and US president Barack Obama regarding tensions with Iran.  With these two leaders having expressed vastly differing feelings on the situation in advance of this meeting, a negative result is surely possible.  Disagreement could help keep mortgage rates lower, while agreement would likely increase upward pressure for rates.

    Category: Current Mortgage Rates, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Purchase, Refinance

  9. Freddie Mac: Average 30-Year Fixed Rate Mortgage Falls to 3.90%

    By on March 1, 2012

    According to this morning’s Primary Mortgage Market Survey from Freddie Mac, mortgage rates declined somewhat last week.  The average rate on a 30-year fixed rate mortgage fell from 3.95% to 3.90%.  The average rate on a 15-year fixed rate mortgage fell from 3.19% to 3.17%.  5/1-year ARMs actually ticked up 3 basis points to 2.83%, and the 1-year ARM fell one basis point to 2.72%.  Frank Nothaft, VP and Chief Economist for Freddie Mac commented:

    “Fixed mortgage rates bottomed out in January and February of this year which is helping spur the housing market. For instance, pending existing home sales rose in January to its strongest pace since April 2010 and sales figures for December saw upward revisions. In addition, the Federal Reserve noted in its February 29th regional economic review (or Beige Book) that residential real estate activity increased modestly in most of its Districts over the course of January and early February, with several reports of increased home sales.”

    I am somewhat surprised that rates fell, as economic reports indicate that the U.S. economy is slowly improving, and the debt situation in Europe is at least nominally resolved in the short term (well, not really, but that is a matter for a different post).

    I still expect that we will see rates increase gradually in the near term.

    Category: Mortgage Rates

  10. Current Mortgage Rates for Thursday, March 1, 2012

    By on March 1, 2012

    Stocks are up this morning despite mixed economic reports and if the trend continues, we could see another day of increased mortgage rates.  Three key pieces of economic data were reported this morning.  First, initial jobless claims declined again this week, falling by 2,000 claims from the week prior.  As the week-to-week data for jobless claims tends to be volatile, the 4-week moving average is a better indicator of overall trends.  The 4-week moving average is down by 5,500 claims, and is now at the lowest levels since 2008.  Although unemployment remains elevated, the labor sector is very gradually improving.

    Second, Personal Income and Outlays for January was reported.  Nominal personal consumption expenditures increased 0.2 percent, while real PCE was unchanged.  Nominal disposable personal income rose 0.1 percent while real DPI declined 0.1 percent.  These numbers were weaker than anticipated.  Unchanged consumer spending definitely represents a headwind for  an economic recovery.

    Lastly, the ISM Manufacturing Index showed that the manufacturing expansion decelerated in February.  PMI was at 52.4% in February, down from 54.1% in January.  The expectation was for 54.6%.  Numbers above 50 indicate that manufacturing is expanding, numbers below show contraction.  Although manufacturing is still growing, this is not a strong report.

    In light of one good report and two so-so reports, I think we will see mortgage rates creep up a little bit today (mortgage rates generally rise on good news and fall on bad news).  I still believe that we will see rates gradually increase in the near term, and we may have seen the last of record-low rates.

    Some of Our Most 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 3.125% 3.331%
    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 fluctuate all the time. The above rates were quoted at 10:20 A.M., on March 1, 2012. Call 877-868-2503 for more details.***

    Continue Reading…

    Category: Mortgage Rates

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