Week Ahead

What’s News for Mortgage Rates This Week: August 23rd

If you’re a fan of cliff diving, last week was your week. It was full of economic reports that took a nose dive for the real estate industry, mortgage markets and the overall economy.

Mortgage bonds and mortgage rates took a beating while all ears were listening to hear the outcome and recommendations of the “Future of Housing Finance” conference last Tuesday. At the end of the day, the majority of opinions agreed to the fact that government still needs to be involved in the housing market in the form of Fannie Mae, Freddie Mac and FHA.

In other real estate specific news, not only did the NAHB Housing Market Index fall short of estimates, so did housing starts and building permits. These combined reports proved that the housing tax credit may have done more harm than good to the housing industry.

Although the manufacturing indexes showed signs of improvement, the fact that Initial Claims came in well above expectations drew skepticism about the health of the employment markets. Furthermore, the buzz has begun about a second dip in the economy if new jobs are not created. Jobs is extremely important to the economy and the recovery of home values.

Highlights for this week’s news will be the Existing Home Sales Report on Tuesday and the New Home Sales Report on Wednesday. These two reports will either confirm the dismal state of the housing industry post-homebuyer tax credit or show a new spark for the real estate industry.

Durable Goods Report will be released on Wednesday and the all important Gross Domestic Product Report on Friday. Collectively, these two reports will provide greater detail on economic activity and specifically in which direction the economy is heading.

The report that has garnished the most weekly attention will be released on Thursday….Initial and Continuing Jobless Claims Report. As the summer comes to an end, will the seasonal employment surge now become a major drag on any potential recovery. The lack of jobs still is a big key to real estate.

This is What’s News for Mortgage Rates This Week: August 23rd.

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

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

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

Want to see what other economic reports might impact home buyers and home refinance options in the coming week? Visti the Mortgage Market Update and check out the Economic Calendar.

Buying a house? The last thing you want is an unsuccessful closing. Check out the Mortgage Market Guide View for some tips that will help ensure your home buying experience moves in the right direction.

Week Ahead

What’s News for Mortgage Rates This Week: August 16th

In case you missed it. The Federal Open Market Committee met last week to discuss the overall state of the economy and reassess their monetary policy. At the end of the day, the Federal Reserve voted to maintain the target range for the federal funds rate at 0 – 0.250%.

This news was a temporary boost to mortgage bonds and helped mortgage rates decline initially. Unfortunately, by weeks end the mortgage bond market was on their heels despite all the bad headline economic reports last week. One would have expected for home loan rates to decline further.

What exactly happened? The Federal Reserve created a little ambuiguity in their FOMC Statement Press Release and investors worldwide were uncertain as to where they should shift their money.

Last week all eyes were on Ben Bernanke and the gang. Technicals were set aside for interpretive analysis.

This week mortgage rates will be driven by technical economic reports, which include: Empire State Index; Producer Price Index & Core Producer Price Index (PPI); Capacity Utilization; and Philadelphia Fed Index.

The Philadelphia Fed Index is by far the most important report of the week. It’s release on Thursday coupled with today’s Empire State Index will provide insight into the manufacturing sector moving forward.

In real estate specific news, the housing industry will be on the lookout for two economic reports tomorrow. July’s Housing Starts and Building Permits will help clarify which direction the real estate  market is heading now that the home buyer tax credit is no longer an influence. Will new construction continue to languish or will the two reports show new signs of a real estate recovery? Stay tuned.

This is What’s News for Mortgage Rates This Week: August 16th.

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

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

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

Want to see what other economic reports might impact home buyers and home refinance options in the coming week? Visti the Mortgage Market Update and check out the Economic Calendar.

Week Ahead

What’s News for Mortgage Rates This Week: August 9th

Last week it was all about jobs and it wasn’t Steve Jobs.

In case you missed it, last Friday’s Jobs Report showed that 131,000 jobs were lost in the month of July. Even worse was the fact that June’s employment report was revised showing nearly 100,000 more jobs were lost than originally reported.

Where does this leave the economy and the real estate industry?

Without jobs, there will be no consumer spending which accounts for nearly 70% of the economy. Without jobs, consumers lack the confidence to buy big ticket items such as a house. There is definitely no doubt that without jobs, there is no economic recovery.

Even last week it was reported that Personal Savings had increased again. An increase in Personal Savings sounds like a good thing. Unfortunately, an increase in savings means that money is not being spent in the economy.

The economic reports to keep an eye on this week to get a sense of consumer’s willingness to spend will be Retail Sales and the Consumer Price Index (CPI) at the end of the week.

Before these two critical economic reports on Friday, every analyst and arm-chair economist will be listening to what Ben Bernanke and the Federal Reserve board members have to say tomorrow.

There is still much debate on the state of the economy and an economic recovery. The Federal Open Market Committee meeting will hopefully provide keen insight as to the mindset of how and when the Federal Reserve will get us there.

This is What’s News for Mortgage Rates This Week: August 9th.

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

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

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

Want to see what other economic reports might impact home buyers and home refinance options in the coming week? Visti the Mortgage Market Update and check out the Economic Calendar.

Week Ahead

What’s Ahead for Mortgage Rates This Week: July 26th

Mortgage markets worsened last week for the first time in 6 weeks. Investors were pleased with corporate earnings reports and the European bank stress tests results.  Stocks gained on the news, and bonds lost.

Mortgage rates rose last week, but only slightly. Rate are still hovering near their lowest levels of all-time.

Of the bigger stories last week was Existing Home Sales. As reported by the National Association of Realtors®, sales volume was down in June and home supplies were up. But figures were a bit better than expected, giving some hope for housing.

Notably, the number of move-up buyers outnumbered first-timers and the national median home price rose, suggesting that mid-to-upper home prices are getting some support.

This week, the market gets additional two pieces of housing data to add to the mix:

1. New Homes Sales (Monday)
2. Case-Shiller Index (Tuesday)

Both will have an impact on mortgage rates. In general, better-than-expected data should cause rates to rise in Indiana; worse-than-expected data should cause rates to fall.

Also this week, there’s two consumer confidence reports, the Fed’s Beige Book, and late-in-the-week inflationary data.  Mortgage markets should remain volatile with so much news headed down the pipe.

It’s too soon to declare the current 3-month rally over, but it’s been 3 weeks since rates dipped. This can be a signal that mortgage rates have finally bottomed and that it’s time to lock your rate.

If you’re floating a mortgage rate, or thinking about a refinance, it’s time to get locked in. Rates may drop this week, but then again, maybe they won’t. There’s little sense gambling on a bet as big as a mortgage.

Week Ahead

What’s Ahead for Mortgage Rates This Week: July 11th

Mortgage markets improved again last week — if only barely — throughout a holiday-shortened week devoid of “major” data and market conviction.

Up-and-down trading characterized the week which ended with Illinois mortgage rates slightly lower versus the week prior.

Mortgage rates have fallen in 4 consecutive weeks and are on an extended rally that dates back to mid-April.

This week, however, data returns and rates could reverse. Especially with inflation numbers in play.

Inflation is the enemy of mortgage rates.

Inflation is bad for mortgage rates because mortgage rates are based on the price of mortgage-backed bonds.  When inflation pressures mount, the demand for mortgage-backed bonds wanes and that pushes bond prices down which, in turn, pushed bond yields (i.e. rates) up.

There’s three pieces of inflation-related news this week.

The first inflation-related story is the Federal Reserve’s Wednesday release of the minutes from its last meeting. When the Fed adjourned June 23, it said “underlying inflation has trended lower“. There is definitely more to the conversation than what the FOMC released in its post-meeting statement. 

Markets will be looking for clues.

On Thursday, the Producer Price Index is released. The Producer Price Index is a measure of business operating costs. When PPI is increasing, it means that “doing business” is more expensive — an inflationary situation. It’s inflationary because higher business costs are often absorbed by consumers in the form of higher prices for goods and services.

A rising PPI is usually bad for mortgage rates.

And lastly, the Consumer Price Index will be released on Friday. The CPI measures the average American’s “cost of living”. Like PPI, when the Consumer Price Index is rising, mortgage rates tend to follow.

Other releases of importance this week include Retail Sales and two consumer confidence surveys.

Last week, mortgage rates again made new all-time lows. If you haven’t checked with your loan officer about the possibility of a refinance, make that call this week.  Mortgage rates can stay low for a long time, but they can’t stay low forever. Lock your rate while you can.

Week Ahead

What’s Ahead for Mortgage Rates This Week: July 6th

Mortgage markets improved last week as economic data revealed a slowing U.S. economy.

Major stock indices fell to 2010 lows in response to a weak jobs report among other data points, forcing worldwide investors into the relative safety of U.S. government-backed bonds.  This category includes mortgage-backed bonds and the extra demand helped to drop rates.

Once again, mortgage rates improved in Indiana and Freddie Mac is reporting new all-time lows on three popular, conforming loan products:

• The 30-year fixed rate mortgage
• The 15-year fixed rate mortgage
• The 5-year adjustable rate mortgage

Low rates mean low payments and you can’t know your options until you ask.

This week, mortgage rates may move slowly. There’s very little data set for release because markets were closed Monday in observance of Independence Day, and because the second calendar week of a month is traditionally data-slow.

Tuesday, a consumer confidence study is published; Thursday, jobless claims plus consumer credit levels hit; and, Friday, we’ll see wholesale inventories.  That’s about it.  None of these reports are particularly important but, in aggregate, the numbers can show whether the economy is expanding or contracting.

In general, evidence of an expanding economy should cause mortgage rates to rise.  In a contracting economy, rates are likely to fall.

Actual mortgage rates will vary by borrower, based on property type, credit score, and home equity. If you haven’t talked to your loan officer about a refinance into today’s rates, it’s likely worth the time for a phone call.

Once mortgage rates start to reverse higher, they’re expected to reverse quickly. You’ll want to act before that move occurs.

Week Ahead

What’s Ahead for Mortgage Rates This Week: June 21st

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 Chicago 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 this 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.

Timing is everything so pick up the phone and contact me today to discuss your home loan finance options.

Week Ahead

What’s Ahead for Mortgage Rates This Week: June 14th

Mortgage markets posted four good days last week and one awful one.  Unfortunately for rate shoppers in Indiana, 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 Hoosiers 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.

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