Archive for Mortgage Rates
What’s Ahead For Mortgage Rates This Week : May 10, 2010
Posted by: | Comments
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 Palo Alto 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.
What’s Ahead For Mortgage Rates This Week : March 29, 2010
Posted by: | Comments
Mortgage markets tanked last week, raising rates in California to their highest levels in a month.
Most of the losses occurred Wednesday in what was the worst 1-day mortgage market performance in more than 6 months. Even Friday’s rally could barely dent the losses. Most of the movement was tied to geopolitical concerns and worries of a ballooning federal debt load.
The best time to lock a conventional or FHA mortgage rate last week was Tuesday morning.
This week, markets should remain volatile. There’s a large set of economic data due for release, plus trading volume will thin as the week goes on because markets are closed Friday for Good Friday.
Coincidentally, Friday is also the day that the March jobs report is released.
The non-farm payroll report is expected to show net job growth of 187,000 in March. This is a large number as compared to last month’s net loss of 36,000 job. However, analysts are already dismissing March’s numbers as skewed by both the bad storms of February, and the temporary hiring of Census workers.
In most months, major job growth would be bad for mortgage rates. This month, that won’t be the case. It will take a figure north of 200,000 to cause rates to rise and the higher the actual number, the more that rates will respond.
Also this week, on Wednesday, the Federal Reserve’s $1.25 trillion program to support mortgage markets sunsets. Fed insiders estimate that the program dropped rates 1 percent since its inception in 2008. It’s reasonable that mortgage rates will rise after its end, therefore.
What’s Ahead For Mortgage Rates This Week : March 8, 2010
Posted by: | Comments
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 : February 16, 2010
Posted by: | Comments
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
Posted by: | Comments
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.
Palo Alto Mom of three, FHA loan officer
