Mortgage Rates

The Week Ahead for Mortgage Rates: April 16, 2012

Mortgage markets improved last week as a global flight-to-quality continued. With Spain facing questions on its sovereign debt, investors continued to pare exposure to risky assets, sparking demand for the relative safety of U.S. government-backed mortgage-backed bonds.

As a result, conforming and FHA mortgage rates slipped for the third straight week last week. 

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage available to borrowers in Indiana is down to 3.88% nationwide with an accompanying 0.7 discount points plus “typical” closing costs.

Click here to see today’s mortgage rates.

Last week’s reported 3.88 percent rate for the 30-year fixed rate mortgage is within one-tenth of one percent of the lowest, average mortgage rates in Freddie Mac survey history. However, the last time conforming rates were reported in this range, the accompanying, required discount points were higher than last week’s 0.7.

Meanwhile, at 3.11% nationwide with 0.7 discount points plus closing costs, the 15-year fixed rate mortgage rate is equally low. It also set a record last week.

It’s a good time to be looking for a mortgage in Crown Point. Rates and fees are great.

Click here to see today’s mortgage rates.

Last week, markets moved on momentum. This week, they’ll move on data. The economic calendar is busy.

• Monday: Retail Sales; Housing Market Index
• Tuesday: Housing Starts
• Thursday: Weekly Jobless Claims; Leading Indicators; Existing Home Sales

In addition, two Federal Reserve members will offer prepared remarks today. They will be the last public Fed comments before next week’s 2-day FOMC meeting.

This is The Week Ahead for Mortgage Rates: April 16, 2012.

Click here to see today’s mortgage rates.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Go Up

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Go Down

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

Mortgage Rates Improve Again To Benefit Homeownership

After a brief surge north of 4 percent last month, mortgage rates have settled down, near their lowest levels of all-time.  

According to Freddie Mac’s weekly Primary Mortgage Market Survey, for applicants willing to pay 0.7 discount points plus a complete set of closing costs, the average 30-year fixed rate mortgage rate fell to 3.88 percent this week.

0.7 discount points adds $700 to your mortgage closing costs for each $100,000 borrowed.

Click here to see today’s mortgage rates.

Mortgage rates are down this week on “safe haven” buying. The move is triggered by Wall Street’s concern that Spain and Italy will have trouble servicing their respective sovereign debt. In response, investors are selling risk-heavy assets and using the proceeds to purchase U.S. government-backed bonds.

This creates demand for mortgage bonds which, in turn, pressures mortgage rates lower.

The storyline is similar to what transpired in Greece last year, and, at least for now, it gives Valparaiso home buyers reason to cheer. So long as economic uncertainty remains, mortgage rates may stay low.

Click here to see today’s mortgage rates.

Of course, like all things in real estate…mortgage rates are local. Rates offered by banks varied by region.

Freddie Mac’s survey of 125 banks showed the following regional breakdown :

• Northeast Region: 3.88% with 0.8 discount points 
• West Region: 3.85% with 0.8 discount points
• Southeast Region: 3.91% with 0.8 discount points
• North Central Region: 3.89% with 0.6 discount points
• Southwest Region: 3.90% with 0.8 discount points

Click here to see today’s mortgage rates.

The best mortgage “deals” are currently available to North Central Region residents. The most expensive loans are for those in the Southeast.

Relative to history, though, all mortgage rates look inexpensive. Conforming 30-year fixed rate mortgage rates have never been as low as they are today. It’s a bonus for home buyers because cheap mortgage rate yield cheap mortgage payments. Home affordability remains near all-time highs.  

If you’re unsure of whether now is a good time to buy or refinance, the answer is yes. Talk to one of my team’s qualified mortgage professionals to review your mortgage options.

Click here to see today’s mortgage rates.

The Week Ahead for Mortgage Rates: April 9, 2012

In a week of up-and-down trading, mortgage markets improved for the second consecutive week last week. Weaker-than-expected jobs data plus evidence of a slumping Eurozone took mortgage bonds lower, capped by a furious Friday morning rally that dropped mortgage rates to near-record levels.

Once again, volatility ruled the mortgage bond pits.

Tuesday afternoon, after the release of the Fed March Minutes, mortgage rates spiked. Some products climbed as much as 0.250 percent. The surge stemmed from the Fed Minutes showing Federal Reserve members hesitant to begin new rounds of market stimulus without a demonstrated, national economic slowdown. 

Click here to see today’s mortgage rates.

Wall Street hadn’t expected the Fed’s verbiage to be so well-defined. With little evidence that such a slowdown was underway — the economy has shown two straight seasons of consistent, steady growth, after all — equity markets rallied and bond markets sunk, causing mortgage rates to rise.

By Wednesday, however, mortgage rates had started to fall. 

Civil unrest in Spain plus concern that the nation will fail to meet its debt obligations drew global investors away from equities and into the relative safety of U.S. government-backed bonds — including mortgage-backed bonds. This is a common investment pattern during times of economic uncertainty and one of the major reasons why mortgage rates have been so low, for so long.

If the scenario in Spain sounds similar to what transpired in Greece between mid-2010 and late-2011, that’s because it is. Mortgage rates in Northwest Indiana and suburbs of Chicago Illinois may benefit short-term.

Click here to see today’s mortgage rates.

Also helping rates last week was the March jobs report or lack thereof.

The U.S. government reported 120,000 net new jobs created in March, well short of the 200,000 figure that analysts expected. The stock market sold off sharply on the news, giving mortgage rate shoppers another chance to capture low rates.

This week, with the economic calendar light, look for Europe to dictate market action. Mortgage rates may move lower but there’s more room for rates to rise than to fall. Mortgage rates remain near all-time lows.

This is The Week Ahead for Mortgage Rates: April 9, 2012.

Click here to see today’s mortgage rates.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Go Up

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Go Down

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

Fed Minutes Shock Investors – Mortgage Rates Rise Suddenly

The Federal Reserve has released the minutes from its last FOMC meeting held March 13, 2012. Mortgage rates in Northwest Indiana and suburbs of Chicago Illinois are rising on the news.

The Federal Open Market Committee, the sub-group within the Federal Reserve that votes on U.S. monetary policy, publishes its meeting minutes generally 3 weeks after their meeting.

Similar to the minutes from a corporate event, or condominium association meeting, the Fed Minutes recounts the conversations and debates that transpired throughout the meeting.

Click here to see today’s mortgage rates.

The Fed Minutes is a lengthy publication, often filling 10 pages or more. By contrast, the more well-known publication of the FOMC press release tends to span 6 paragraphs or less.

The extra detail contained within the Fed Minutes fuels Wall Street, especially given the current economic uncertainty. Investors look to the Federal Reserve for clues about what’s next for the U.S. economy.

Lately, the minutes has made an out-sized impact on mortgage rates. The Fed’s words continue to swing the mortgage-backed bond market.

Click here to see today’s mortgage rates.

Yesterday and today is no different.

March’s Fed Minutes is a dense one and markets are reacting. The text shows a central bank softly divided on future U.S. economic policy, and in debate about whether existing market stimulus should be removed.

The Fed has said that it’s expecting high levels of unemployment and low levels of inflation in the coming months, an outlook that leaves little reason to introduce a third round of stimulus. This is the primary reason why mortgage rates increased suddenly in Northwest Indiana and suburbs of Chicago Illinoi on the heals of the Fed Minutes’ release yesterday afternoon at 1 PM, CST.

Click here to see today’s mortgage rates.

Since mid-March, mortgage rates dropped on speculation that the Federal Reserve would introduce a mortgage bond purchase program this quarter. Today, those expectations have reversed.

According to the minutes, the Federal Reserve believes that additional market stimulus would only be necessary “if the economy lost momentum”, or if inflation remained too far below 2 percent per year. Currently, Core PCE — the Fed’s preferred gauge of inflation — is running slightly below 2 percent.

The Federal Reserve’s next scheduled meeting is April 24-25, 2012 — it will be the third of 8 scheduled meetings this year. In the mean time, there will be several Fed Bank Presidents making public statements.

Click here to see today’s mortgage rates.

The Week Ahead for Mortgage Rates: April 2, 2012

Mortgage markets improved last week on renewed concerns of a European debt default, and Federal Reserve rhetoric.

Conforming mortgage rates in Northwest Indiana and suburbs of Chicago Illinois dropped on the news, one week after posting a 5-month high.

A major strike in Spain and growing unrest in Italy, both in opposition to recent austerity measures, have re-ignited fears that the Eurozone may lapse into recession.

These are similar beginnings as with last year’s events in Greece. The difference is that Spain and Italy represent a larger share of the Eurozone’s overall economy, and a debt default could trigger faster contagion.

Mortgage markets gained on the news in a bid of safe haven buying.

Click here to see today’s mortgage rates.

Bonds also gained as Federal Reserve Chairman Ben Bernanke clarified his position on the economy with respect to Fed-led stimulus. Summarized, he said that the Federal Reserve is inclined to keep its accommodative policies in place until the labor market is more fully recovered.

In addition, Chairman Bernanke alluded to making direct mortgage market intervention if U.S. economic growth were to stall in the near future.

The news helped push mortgage rates back below 4.000 percent last week, according to Freddie Mac’s weekly Primary Mortgage Market Survey. The average 30-year fixed rate mortgage rate fell to 3.99% for applicants willing to pay an accompanying 0.7 discount plus closing costs.

1 discount point is equal to one percent of your loan size.

Click here to see today’s mortgage rates.

This week’s mortgage market activity will be holiday-shortened so expect volatility — especially surrounding Friday’s March Non-Farm Payrolls report.

More commonly called “the jobs report”, Non-Farm Payrolls details national employment rates and gains or losses in the workforce size. Lately, what’s been good for jobs has been good for the economy so if the actual number of jobs created exceeds the 200,000 projected by economists, or if the Unemployment Rate drops off its current 8.3% reading, look for mortgage rates to rise.

In general, economic expansion is bad for mortgage rates throughout Northwest Indiana and suburbs of Chicago Illinois. Other market-moving news this week includes Tuesday’s FOMC Minutes release and Thursday Jobless Claims data.

This is The Week Ahead for Mortgage Rates: April 2, 2012.

Click here to see today’s mortgage rates.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Go Up

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Go Down

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

Mortgage Rates Fall Back Below 4% For Well Qualified

After a brief run-up two weeks ago, mortgage rates are back below 4 percent. It’s good news for home buyers and mortgage rate shoppers of Schererville because with lower mortgage rates come lower mortgage payments.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the national, average 30-year fixed rate mortgage rate fell to 3.99 percent this week from last week’s 4.08 percent.

Last week had marked the 1st time since December 2011 that the benchmark rate crossed north of 4 percent — a span of 16 weeks.

Click here to see today’s mortgage rates.

And, it wasn’t just rates that got cheaper this week — closing costs dropped, too.

Freddie Mac’s survey showed that the average number of discount points to accompany a 30-year fixed rate mortgage fell one-tenth of a percent this week to 0.7, where one discount point is equal to one percent of your loan size.

As a real-life example, a $200,000 Northwest Indiana mortgage with an accompanying 0.7 discount points would be subject to an additional $1,400 one-time closing cost. Last week, that cost was $1,600.

Note, though, that these are average mortgage rates for the nation. On a local level, rates may be higher or lower, and so may the accompanying number of discount points.

Click here to see today’s mortgage rates.

For example, in this week’s Freddie Mac survey, each U.S. region boasts its own “average rate” :

• Northeast Region : 4.00% with 0.7 discount points
• West Region : 3.94% with 0.9 discount points
• Southeast Region : 4.01% with 0.8 discount points
• North Central Region : 3.99% with 0.6 discount points
• Southwest Region : 4.02% with 0.8 discount points

These rates are each well below the average rates of a year ago when the average 30-year fixed rate mortgage was 4.86%. 

Low mortgage rates can’t last forever so if you’ve been wondering whether now is a good time to buy a home or refinance one; or whether rising rates will harm your monthly budget, the answer may be yes. A weak economy held mortgage rates low last year. An improving economy should push rates higher this year.

Looking ahead to spring and summer, mortgage rates appear poised to rise. Call today to review and discuss your home loan options.

Click here to see today’s mortgage rates.

The Week Ahead for Mortgage Rates: March 26, 2012

Mortgage markets carved out a wide range last week, eventually closing slightly worse. Mortgage-backed bonds sold off early in the week on rising investor sentiment. Then, they reversed higher on prepared remarks from Federal Reserve Chairman Bernanke, which tempered Wall Street optimism.

When bonds prices rise, mortgage rates fall.

Conforming and FHA mortgage rates in Northwest Indiana edged higher on the week, and remain at a 5-month high.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage is now 4.08% and the 15-year fixed rate mortgage is now 3.30%. Both loan types require an accompanying 0.8 discount points, plus a full set of closing costs.

1 discount point is equal to one percent of your loan size.

Click here to see today’s mortgage rates.

Last week’s conforming mortgage rates represent a sharp increase from the week prior when rates for the 30-year fixed rate mortgage and 15-year fixed rate mortgage averaged 3.92% and 3.16%, respectively.

If you’ve been shopping for a 30-year fixed rate mortgage, the interest rate increase added $9.22 to your monthly payment per $100,000 borrowed.

We can’t know in what direction mortgage rates will move this week, but we can be certain they’ll be volatile. Wall Street is suddenly on edge, unsure of whether the economy is improving as recent data suggests, or if the Federal Reserve is correct in that threats to growth persist.

Click here to see today’s mortgage rates.

The week’s data schedule is as follows :

• Monday - Pending Home Sales Index
• Tuesday - Consumer Confidence; Case-Shiller Home Price Index
• Wednesday - Durable Goods
• Thursday - Initial Jobless Claims; GDP
• Friday - Personal Income and Outlays

In addition, there are 6 Federal Reserve speakers scheduled for the week, including Chairman Bernanke. Expect mortgage rates to change frequently throughout the week as Wall Street wrestles with data and rhetoric.

Although mortgage rates spiked last week, they remain historicially  low. If you’re nervous that rates may rise more, consider locking in your home loan sooner than later.

This is The Week Ahead for Mortgage Rates: March 26, 2012.

Click here to see today’s mortgage rates.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Go Up

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Go Down

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

The Week Ahead for Mortgage Rates: March 19, 2012

Mortgage markets worsened last week as the Federal Reserve’s Federal Open Market Committee suggested economic recovery may be closer than it originally expected, and that inflation may be a near-term economic concern.

Although the FOMC voted to leave the Fed Funds Rate unchanged in its current range near 0.000 percent, its published comments sparked a broad-based mortgage bond selloff.

Conforming mortgage rates throughout Indiana and Chicago Illinois rose sharply post-FOMC, climbing by as much as 0.375%.

If you’ve been shopping for a mortgage rate, the run-up was both untimely and unwelcome.

Click here to see today’s mortgage rates.

According to Freddie Mac’s weekly mortgage rate survey, for most of the year, conforming 30-year fixed rate mortgage rates had remained within a tight range near 3.90 percent for mortgage applicants willing to pay an accompanying 0.8 discount points.

Freddie Mac this week is expected to report average 30-year fixed rate mortgage rates well north of four percent. It would mark the highest level for the benchmark mortgage rate since mid-December of last year.

There will be a lot more for rate shoppers to watch this week, too. There is a slew of housing data set for release and the heavily-anticipated HARP 2.0 Refinance program “goes live” nationwide.

HARP is a government-led refinance program meant to help underwater homeowners refinance their Fannie Mae- or Freddie Mac-backed mortgages into new loans at today’s low rates.

Click here to see today’s mortgage rates.

The program was first launched in 2009 and helped roughly one million U.S. homeowners. HARP’s newest iteration provides for a more lenient underwriting process that is expected to open the program to an additional 6 million homeowners or more.

Mortgage rates may rise this week as a result of HARP-based loan volume. It may also rise on strength in housing — there are four data points due for release :

• Monday: Housing Market Index (moderate impact)
• Tuesday: Housing Starts (high impact)
• Wednesday: Existing Home Sales (high impact)
• Friday: New Home Sales (high impact)

As in most weeks, it’s less risky to lock a mortgage rate than to float one. Mortgage rates have much room to climb but very little room to fall. If you’re not yet locked, talk to your loan officer and make a plan.

Click here to see today’s mortgage rates.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Go Up

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Go Down

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

Retail Sales Report Drive Mortgage Rates Sharply Higher

The U.S. economy is expanding, fueled by a renewed consumer optimism and increased consumer spending.

As reported by the Census Bureau, Retail Sales in February, excluding cars and auto parts, rose 1 percent to $335 billion as 11 of 13 retail sectors showed improvement last month.

February marks the 19th time in twenty months that U.S. Retail Sales increased on a month-over-month basis. Retail Sales are also up 6 percent from a year ago.

Unfortunately, what’s good for the economy may be bad for Indiana home buyers and mortgage rate shoppers. Home affordability is expected to worsen as the U.S. economy improves.

Click here to see today’s mortgage rates.

The connection between Retail Sales and home affordability is indirect, but noteworthy — especially given today’s economy.

First, let’s talk about affordability.

Last week, the National Association of REALTORS® released its monthly Housing Affordability Index, showing that homes are more affordable to everyday home buyers than at any time in recorded history. For buyers with median earnings buying median-priced homes, monthly payments now comprise just 12.1% of the monthly household income.

The real estate trade group considers 25% to be the benchmark for home affordability. Today’s payment levels are less than half of that.

Click here to see today’s mortgage rates.

The reasons why today’s homes are so affordable are three-fold :

1. Home prices remain relatively low as compared to peak pricing
2. Fixed- and adjustable-rate mortgage rates remain near all-time lows
3. Average earnings are increasing nationwide

Rising Retail Sales can derail the trend. This is because Retail Sales measure consumer spending and consumer spending accounts for roughly 70 percent of the U.S. economy. As the economy expands, the forces that combined to raise home affordability so high begin to wane. 

First, mortgage rates tend to rise in a recovering economy and home prices are expected to do the same throughout 2012 and 2013. Second, as average earnings increase it can spur inflation which is bad for mortgage rates. 

Home affordability is at all-time highs today. But, in part because of February’s Retail Sales data, we should not expect these levels to last.

Mortgage rates are higher by 1/4 percent since the Retail Sales data was released — roughly $16 per $100,000 borrowed — and are expected to rise more throughout the spring home purchase season.

Click here to see today’s mortgage rates.

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