The Mortgage Buzz

Mortgage markets improved last week on weaker-than-expected jobless figures, ongoing troubles in Europe, and a tame reading on domestic inflation.

As a result, conforming mortgage rates for illinois fell last week, drawing loads of new refinance applications.

For a brief moment Thursday afternoon, mortgage bond prices pierced a key support level, dropping rates in los angeles to their best levels of the year. 

It didn’t last long, however. By Friday morning, pricing was worsening on profit-taking and in preparation for this week — a week that promises to be heavy on both data and rhetoric.

To mortgage markets, this can be a dangerous combination.

The biggest news of the week is the Federal Reserve’s 2-day meeting, scheduled for Tuesday and Wednesday in Washington D.C. 

The Fed is expected to hold the Fed Funds Rate in its target range near 0.000-0.250 percent. It won’t be what the Fed does at its meeting that will matter to rates, though. It will be what the Fed says — about jobs, about growth, about inflation — in its post-meeting press release.

Remarks that reflect well upon the economy should lead mortgage rates higher. Remarks viewed as negative should lead mortgage rates down.

There’s key data due for release next week, too:

• Tuesday : Existing Home Sales and Home Price Index
• Wednesday : New Home Sales
• Thursday : Continuing Jobless Claims
• Friday : GDP and Consumer Sentiment

Mortgage rates remained relatively tame last week.  This week, volatility should return.

If you’re shopping for a mortgage, rates remain very low but could reverse quickly. Your biggest risk is tied to the Fed’s adjournment Wednesday afternoon.

Mortgage markets posted four good days last week and one awful one.  Unfortunately for rate shoppers in california , that one bad day outweighed the gains of the other four and mortgage rates worsened on the week overall.

Despite re-touching all-time lows on Tuesday and Wednesday, Conforming and FHA mortgage rates moved higher on the week.

There wasn’t much domestic data on which for mortgage markets to move so rates took their cues from global economic activity. Strong data from Japan and China, plus an improving outlook from the Eurozone, sparked optimism among Wall Street investors. Cash poured into the stock market and it happened at the expense of bonds — including the mortgage-backed ones.

It’s the primary reasons rates rose and not even the worst Retail Sales report in 8 months could undue the damage.

Often, weak Retail Sales data causes mortgage rates to fall. Last week, however, that wasn’t the case. 

This week, there’s cause for rates to rise again with Wednesday emerging as a “data day”.

First, at 8:30 AM ET, the government releases two key housing statistics and one major gauge for inflation — Housing Starts, Building Permits and Producer Price Index, respectively.  Strength in any or all three should lead mortgage rates higher.

Then, at 5:45 PM ET, Fed Chairman Ben Bernanke makes a public speech and anytime Bernanke speaks, mortgage rates can move.

Mortgage rates remain unnaturally low and a lot of Americans have taken advantage already. If you’re a homeowner and you’ve wondered whether or not a refinance makes sense, talk to your loan officer straight away. Low rates like this can’t last forever so lock one in while you can.

Rate shoppers caught another break last week as mortgage markets improved on weak jobs data.

The May Non-Farm Payrolls report fell well short of expectations while ongoing jobless claims rose.  The two combined to cast doubt on the speed of the U.S. economic recovery, hurting stocks and helping bonds.

Conforming and FHA mortgage rates in new york dropped for the fifth time in six weeks and, once again, rates are trolling back near all-time lows.

No doubt you’ve heard that before — “mortgage rates at all-time lows”.  Mortgage rates have dipped to these levels four times in the last 19 months. However, on each occasion, it wasn’t long after touching bottom before rates reversed higher.

• November 2008 : Roughly 90 minutes
• March 2009 : Roughly 6 hours
• May 2009 : Roughly 1 day
• May 2010 : Roughly 3 hours

This week, rates could stay low for a matters of hours, or days — we can’t really know. Especially with no “major” data due for release.  Instead, most of this week’s economic news is incidental. That means that mortgage markets will move based on trader sentiment and “gut feel”.

The good news is that the market momentum is currently in the rate shoppers’ favor. We entered the weekend with rates falling and they look poised to open Monday no worse.

Here’s a look at what’s ahead this week:

• Monday: Consumer credit, a critical piece of consumer spending
• Wednesday : The Beige Book, a regional economic report from the Fed
• Thursday : Initial and continuing jobless claims
• Friday : Retail Sales and the Consumer Sentiment report

Market sentiment is a strange animal. One minute it can be your friend and, the next, it can be your enemy. Opinions change swiftly on Wall Street and so do mortgage rates. 

If you’re still not locked in, consider making your move. Rates have a lot farther to rise than they do to fall. You won’t want to be on the wrong side of the bet when rates start rising.

Rate shoppers caught another break last week as mortgage markets improved on weak jobs data.

The May Non-Farm Payrolls report fell well short of expectations while ongoing jobless claims rose.  The two combined to cast doubt on the speed of the U.S. economic recovery, hurting stocks and helping bonds.

Conforming and FHA mortgage rates in california dropped for the fifth time in six weeks and, once again, rates are trolling back near all-time lows.

No doubt you’ve heard that before — “mortgage rates at all-time lows”.  Mortgage rates have dipped to these levels four times in the last 19 months. However, on each occasion, it wasn’t long after touching bottom before rates reversed higher.

• November 2008 : Roughly 90 minutes
• March 2009 : Roughly 6 hours
• May 2009 : Roughly 1 day
• May 2010 : Roughly 3 hours

This week, rates could stay low for a matters of hours, or days — we can’t really know. Especially with no “major” data due for release.  Instead, most of this week’s economic news is incidental. That means that mortgage markets will move based on trader sentiment and “gut feel”.

The good news is that the market momentum is currently in the rate shoppers’ favor. We entered the weekend with rates falling and they look poised to open Monday no worse.

Here’s a look at what’s ahead this week:

• Monday: Consumer credit, a critical piece of consumer spending
• Wednesday : The Beige Book, a regional economic report from the Fed
• Thursday : Initial and continuing jobless claims
• Friday : Retail Sales and the Consumer Sentiment report

Market sentiment is a strange animal. One minute it can be your friend and, the next, it can be your enemy. Opinions change swiftly on Wall Street and so do mortgage rates. 

If you’re still not locked in, consider making your move. Rates have a lot farther to rise than they do to fall. You won’t want to be on the wrong side of the bet when rates start rising.

Mortgage markets worsened last week as concerned of a global debt crisis lessened and stock markets rebounded. The gains in stocks came at the expense of bonds — including mortgage bonds. 

Conforming and FHA mortgage rates rose in illinois for the first time in 5 weeks, pulling mortgage pricing off its best levels of the year.

The best mortgage rates of last week were locked Tuesday morning.

This week, mortgage rates may rise even more. In addition to the release of May’s jobs report and consumer confidence data, fears of broader economic slowdown appear to be easing.

Day-by-day, the chances of rates rising are real. 

On Tuesday, a consumer confidence survey is released. Consumer confidence is linked to economic growth because 70 percent of the economy is based in consumer spending. In theory, as consumer confidence grows, the economy should, too. 

Therefore, a strong reading should push mortgage rates higher.

Then, on Wednesday, Pending Home Sales and Auto Sales data is released for last month. Both items are “big ticket” and, again, reflect on consumer confidence. Strong readings should be rough on rates.

Next, on Thursday, jobless claims data hits the wires along with worker productivity stats.  Normally, these two releases don’t carry much weight, but with the jobs market in focus this year, markets will be watching for clues about Friday’s big report — the May Non-Farm Payrolls.

Anything can happen when the jobs report is released. 

In April, an estimated 290,000 jobs were created and, in May, economists think more than a half-million people re-entered the workforce.  This is good for the economy, of course, but can drag on mortgage rates.  If job growth even comes close to the 500,000 marker, mortgage rates could zoom higher.

Mortgage rates moved higher last week but are still very low. If you’ve been thinking about refinancing your mortgage, you probably shouldn’t put it off much longer.  Talk to your loan officer today — the longer you wait, the more that rates can rise.

Another week, same old story. 

Mortgage markets improved again last week on worsening news out of Greece and the Eurozone. Then, as contagion mentality set in, U.S. mortgage bonds gained and mortgage rates fell.

It’s the 4th straight week in which conforming mortgage rates in new york improved and, against the expectations of experts everywhere, it’s now late-May and mortgage rates are as low as they’ve been all year.

If you’re a homeowner and haven’t looked at refinancing lately, it may be a good time to call your loan officer to hear your options. Especially because low rates can’t last forever.

The European market concerns are likely overblown and the U.S. economy continues to expand at a measured pace.

This week, housing and inflation data takes center stage.

• Monday : Existing Home Sales data
• Tuesday : Case-Shiller Index; Home Price Index
• Wednesday : New Home Sales data
• Thursday : GDP
• Friday : Personal Consumption Expenditures

Each of these data points has the power to move mortgage rates — especially because trading volume is expected to thin as the 3-day weekend nears. As volume drops on Wall Street, it will be harder to match buyers and sellers and, as a result, mortgage pricing will get (more) erratic.

Rates should be most stable at the start of the week. It may be the best time to lock a rate.

Mortgage markets improved last week — but barely — as ongoing doubt surrounding the health of Greece and the Euro pushed additional investors into safe assets, including mortgage bonds. 

Mortgage rates were wildly volatile between Monday and Friday before closing the week slightly better than their best levels of the year.

It’s the 3rd straight week in which mortgage rates improved but that doesn’t necessarily mean the trend for lower rates will continue. The last two times mortgage rates teased these levels, they immediately spiked higher.

It happened once in February 2010, and again, 4 weeks later in March.

This week, the same could happen.  After a week-and-a-half without much data of consequence, the newswires will be on overtime.

The first release to watch is Monday’s National Association of Home Builder’s Housing Market Index.  It’s not a “mainstream” release, per se, but the index gives some insight into how homebuilders are feeling about the economy and homebuilders are on the frontlines of the housing market. The stronger the report, the worse it should be for mortgage rates going forward.

The same goes for Tuesday’s Housing Starts and Building Permits numbers.

Also on Tuesday, the government releases the Producer Price Index. The Producer Price Index is like a “cost of living” report for U.S. businesses — it measures the change in operating cost from mont-to-month and from year-to-year.

PPI is viewed as a precursor to inflation and inflation is bad for mortgage rates. Therefore, if the Producer Price Index reads higher-than-expected, mortgage rates will rise. If PPI is in-line, rates in new york should hold steady.

Then, on Wednesday, the Consumer Price Index is released. Again, if costs are rising, mortgage rates will likely follow.

The week closes with the release of the Federal Reserve’s minutes from its last meeting in April and the jobs figures.  All in all, a busy week of data and mortgage rates could change by a lot.

If you’re still shopping for the market bottom, luck’s been on your side but there’s a point when it’s best to just lock in.  This week may be that point.

Talk to your loan officer about today’s market and make yourself a game plan for locking a rate. Rates have never stayed this low, for this long, and this week doesn’t figure to be much different.

Mortgage markets improved to their best levels of 2010 last week, aided by events half a world away and ongoing safe haven buying.  Greece’s debt problems continue to help mortgage rate shoppers in los angeles and around the country.

Conventional mortgage rates dropped last week, ARMs falling more than fixed. FHA mortgage rates also improved.

Global concern for the Greece Situation are so strong that markets even shrugged off April’s blowout job report. On most other days, mortgage rates would soar on better-than-expected jobs data — especially coming out of a recession.

The Department of Labor’s April Non-Farm Payrolls reports:

• Payrolls have been net positive for 4 straight months
• Nearly 600,000 jobs have been created thus far in 2010
• Monthly job growth posted its biggest gain in 4 years in April

Additionally, more than 800,000 Americans re-entered the workforce in April in search of work.  As a result, the Unemployment Rate jumped by 0.2 percent — another positive sign (in a roundabout way).

But again, Wall Street wasn’t watching jobs — Wall Street was watching Greece. And Greece was in riot.

This week, without much new data due on the economy, mortgage markets should continue to take cues from Greece, the IMF and the Eurozone.  If a bailout agreement can be reached that investors feel is effective, the safe haven buying that’s led rates lower will recede and mortgage rates should rise.

Conversely, if an agreement is reached that investors deem ineffective, or no agreement is reached at all, mortgage rates should drop.

Each week for the last four weeks, we’ve talked about Greece and its pending bailout and how it might impact rates because each week the bailout appears imminent.  Even this week, the market opens with the news that the IMF has approved a $40 billion lifeline to Greece.  Maybe this will be the news that finally turns the mortgage market around.

Mortgage rates are unnaturally low right now and should change direction quickly. The problem is nobody knows when that will happen so be careful when rate shopping and keep an eye on the market.

Mortgage rates may fall further, but when they turn higher, they’re going to turn quickly.

Mortgage markets improved last week on tame inflation data, a benign statement from the Federal Reserve, and ongoing credit problems in Greece.

The factors combined to drop conforming mortgage rates in new york to their lowest levels in 6 weeks.

It’s an unexpected development considering that mortgage rates were supposed to rise post March 31, 2010.  That was the day the Fed’s support for mortgage markets ended.

Since then, however, a month-long string of devastating economic and meteorological events within the Eurozone sparked a global flight-to-quality that benefited “safe” assets such as mortgage bonds.

May 2010 may not be so kind.

The week starts with news that Greece reached a $147 billion bailout agreement with the IMF Sunday. This is a plus for the Eurozone and mortgage market negative. Rates should rise on the bailout.

Also on Monday, the government releases Personal Consumptions and Expenditures data. 

PCE is the Fed’s preferred inflation gauge and it’s expected to show an annual read of 1.3 percent. Anything higher and rates should rise.

Then, for the rest of the week, employment data takes center stage.

• Wednesday : ADP releases its private sector employment data
• Thursday : The government releases initial jobless claims
• Friday : The government releases April’s job report

Jobs are key to the U.S. economic recovery, tied to consumer spending, consumer confidence, and mortgage delinquencies.  If job growth is better than expected, mortgage rates should rise.  If job growth is worse, rates should fall.

There’s no “best day” to lock this week so keep an eye on the market.  However, if rates in new york rise as quickly in May as they fell in April, you won’t have much time to act.

Mortgage markets worsened last week in see-saw trading. By the time Friday’s market closed, mortgage rates in new york were higher across the board — ARMs, fixed rates, FHA and conventional.

The biggest stories of last week were actually non-stories. 

First, the ash cloud from Iceland’s Eyjafjallajökull volcano dissipated, allowing warehouses to move inventory, airlines to move people, and businesses to move product.  In addition, Greece moved closer to securing emergency funding that will help it stave off default.

When these two issues were threats earlier in the month, mortgage bonds rallied on safe haven buying, driving rates down. As the threats lessened over the course of last week, however, mortgage bonds sold off and mortgage rates rose.

By contrast, this week features lots of stories. Economic data will be at the forefront, as will the Federal Reserve which meets for one of its 8 scheduled meetings of the year.

• Monday : Greece is expected to announce an aid package
• Tuesday : Case-Shiller Index reports on home values from February
• Wednesday : Fed adjourns from its 2-day meeting
• Thursday : Initial Unemployment Claims are released
• Friday : GDP and consumer confidence numbers are released

Furthermore, Wall Street will have its eye on the Senate’s questioning of key Goldman Sachs employees in the wake of the SEC’s fraud charge.

In general, news that’s “good” for the U.S. economy will be bad for mortgage rates, and vice verse.  And with mortgage rates changing as quickly as they have been, rates could really rise in a hurry.

The best defense against rising mortgage rates is to execute a rate lock. If you’re nervous about rates moving higher, call your loan officer and execute your rate lock today.