Archive for Weekly Review
What’s Ahead For Mortgage Rates This Week : March 8, 2010
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Mortgage markets improved last week in low-volume trading.
Between Monday to Thursday, Wall Street focused on the upcoming jobs reports and mortgage markets gained while traders jockeyed for position. Mortgage rates drifted lower through Thursday afternoon. But, then, after a better-than-expected Non-Farm Payrolls report Friday morning, mortgage markets — and mortgage rates — reversed.
Overall, mortgage rates dropped last week, but only by a small margin. Rates were best Thursday afternoon.
It was the second consecutive week in which mortgage rates fell.
Last week was also interesting in that both stock markets and bond markets improved, proving that rates don’t always rise when stock prices do. 455 of the S&P 500 companies posted gains last week.
If you’re shopping for a home or a refinance, though, don’t rest on your laurels. After Friday’s big sell-off, this week opens into a major headwind and, plus, the Federal Reserve’s support for mortgage markets ends in just 3 weeks.
This week, without much data to influence traders, the upward momentum in rates may have little cause to temper. We’ll see the Consumer Confidence numbers on Tuesday and Retail Sales on Friday. Beyond that, there’s not much else.
After last week’s performance, conforming mortgage rates in Northern California may be poised to rise rather sharply. If you’re waiting for the right time to lock your rate, it may have been this past Thursday. Consider locking your rate early this week to protect against further rate hikes.
What’s Ahead For Mortgage Rates This Week : March 1, 2010
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Mortgage markets improved last week as economic reports painted a less-than-stellar portrait of the U.S. economy and concerns of a looming monetary policy change eased. Mortgage pricing improved dramatically, despite a late-Friday retreat.
Mortgage rates are now at their lowest levels since early-February.
Last week was heavy on negative data:
- Consumer Confidence posted 16% short of expectations
- New Home Sales posted 13% short of expectations
- Initial Jobless Claims were higher than expected
In addition, both the Case-Shiller and Home Price Indices showed a slight pullback in the housing sector.
The impact of these statistics was muted, however. This is because Fed Chairman Ben Bernanke gave his semi-annual outlook to Congress and markets focused more on the chairman verbiage than hard data, looking for clues about the future of Fed policy.
Bernanke stayed on message — the Fed Funds Rate will stay low for an extended period of time.
Mortgage rates were also helped by a strengthening U.S. dollar and demand for U.S.-denominated bonds. When demand for mortgage-backed bonds is strong, mortgage rates fall.
This week, mortgage rates will jockey around Friday’s Non-Farm Payrolls report.
Jobs are playing a large role in mortgage bond trading and markets expect that 30,000 jobs were lost in February. If the actual figure is better than 30,000 jobs lost, mortgage rates will rise. If it’s worse, rates will rise.
Other important data this week include Personal Consumption Expenditures — the Fed’s preferred inflation gauge — plus the Fed’s Beige Book release. Mortgage rates remain in flux so float with caution.
Mortgage rates look good today, but by Friday, they could be much, much worse.
What’s Ahead For Mortgage Rates This Week : February 22, 2010
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Mortgage markets had a terrible, holiday-shortened week last week as Wall Street responded to worse-than-expected inflation data and action from the Federal Reserve. Mortgage bonds sold off with force, causing mortgage rates to rise for the second week in a row.
Last week was a bad week to float a mortgage, to say the least. Rates in Mountain View rose by the largest margin in any week since late-2009.
The two biggest stories from last week both came from the Federal Reserve. The first was the release of the FOMC January meeting minutes which showed more confidence in the U.S. economy than Wall Street expected, and the second was the Fed’s surprise announcement to raise the nation’s Discount Rate to 0.75%. Both sparked risk-taking on Wall Street and bonds sold-off as a result.
Now, the Fed Funds Rate won’t climb anytime soon and neither will Prime Rate, but the Fed has sent a clear message to the markets — The Era of Loose Monetary Policy is over.
This week, there’s a lot of economic data set for release.
- Tuesday : Case-Shiller Home Price Index, Consumer Confidence
- Wednesday : New Home Sales
- Thursday : FHFA Home Price Index, Initial Jobless Claims
- Friday : Existing Home Sales, Personal Consumption Expenditures
With markets already on edge, any better-than-expected results should be bad for mortgage rates.
After last week’s performance, conforming mortgage rates for residents of Northern California have now unwound most their January gains. If you’re waiting for the right time to lock, it may have been 2 weeks ago. Consider locking in this week to protect against any further deterioration in price.
What’s Ahead For Mortgage Rates This Week : February 16, 2010
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Mortgage markets worsened last week on general profit-taking in the U.S. bond market, combined with talk of a coordinated rescue effort for Greece and its debt burden. Mortgage-backed bonds sold off, causing conventional and FHA mortgage rates to rise.
There wasn’t much hard data on which to trade last week, either, so momentum took markets farther than they otherwise might have moved on their own. It marked the first time in 5 weeks that rates rose for San Francisco Bay Area rate shoppers.
This week, data returns. Expect mortgage market movement.
Some of the week’s more important releases include:
- Housing Starts and Building Permits (Wednesday)
- The release of the last month’s FOMC Minutes (Wednesday)
- Business and consumer inflation figures (Thursday and Friday)
Inclement weather may have impacted last month’s Housing Starts reading so pay closer attention to Building Permits. Permits precede actual construction and can be more indicative of economic optimism. If permit readings are strong, it should be a negative for mortgage rates.
The same is true for the FOMC Minutes.
Last month’s FOMC post-meeting press-release was decidedly middle-of-the-road, but the statement is just a summary of the Fed’s 2-day meeting, boiled down to a few paragraphs. Wednesday’s release of the FOMC Minutes will reveal the deeper discussions among members of the Fed. Wall Street will mine it for clues about the future of the economy.
If Wall Street senses optimism coming from the Fed — again — mortgage rates should rise.
And, lastly, keep an eye on Thursday and Friday’s inflation data. Inflation is bad for mortgage rates so a higher-than-expected reading should spark a bond market sell-off.
Since mid-December, mortgage rates have moved within a tight range and there’s little reason for rates will break this range this week. However, we are near the top of the channel. If you know you’re going to need a rate locked soon, it’s probably best to do early in the week.
What’s Ahead For Mortgage Rates This Week : February 8, 2010
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Mortgage markets improved last week on domestic jobs data and international banking concerns. The news triggered buying in the bond market and, as a result, conventional, FHA and VA mortgage rates in San Francisco Bay Area improved for the 4th consecutive week.
Mortgage rates are now at a 6-week low but probably shouldn’t be. It underscores just how important global events can be to U.S. mortgage markets.
For example, corporate earnings continue to improve and key elements of the economy are strengthening. Even the Federal Reserve acknowledges this. In most circumstances, that would be a boon for the stock markets and bond markets would suffer, including mortgage bonds.
Last week, that wasn’t the case.
Early in the week, as (1) China tightened its monetary policy, (2) Greece did little to quell lingering default fears, and (3) Spain raised its deficit forecasts, global investors sought to reduce their collective risk exposure. For safety of principal, many sold some of their more aggressive positions and moved the cash proceeds into the U.S. bond market — which includes mortgage bonds.
On Wall Street, this type of trading pattern is called a “flight-to-quality”. Because mortgage bonds are backed by U.S. government entities, the debt is considered to be ultra-safe. Last week’s extra demand for bonds helped to push prices up and mortgage rates down.
And that was before Friday’s weak jobs report. Although the Unemployment Rate fell to 9.7%, the government reported a net loss of 98,000 jobs last month and this, too, helped mortgage rates tick lower.
This week, we’ll hope for momentum to continue.
There’s very little domestic news to move rates this week so keep an eye on the global market for similar stories like what we saw last week. Or, if you’re not sure what to look for, just give me a call or send me an email and I’ll be happy to watch the markets and mortgage rates for you.
