Mortgage Market Update

Information in this post is provided by Greg Wickstrand, Home Loan Consultant for HomeServices Lending.  He is a guest blogger who provides us information from a lender’s perspective.  For additional posts by Greg, please visit his BLOG.

What’s Ahead for Mortgage Rates this Week | November 1, 2010
By Greg Wickstrand

Mortgage markets remained highly volatile for the second straight week last week. Yet, over the course of 5 days, mortgage bonds ended the week relatively unchanged.

Conforming rates worsened Monday, Tuesday and Wednesday — rising as much as 3/8 percent as compared to the week prior — before settling lower through Thursday and Friday.

On the week overall, 30-year fixed rates worsened, 15-year fixed held steady, and 5-year ARMs improved.

And despite all the data released last week, it wasn’t the fundamentals that were causing rates to move. Instead, Wall Street was firmly focused on the Federal Reserve’s scheduled 2-day meeting this week; preoccupied with the likelihood of new Fed stimulus program.

The Fed’s meeting adjourns Wednesday and the group is widely expected to announce a new round of bond market support at that time.  Uncertainty over how big that package will be, however, is what’s causing rates to jump.

Market estimates range from $250 billion to over $1 trillion and when Wall Street expectations shifts toward the lower end of that range, mortgage rates have been rising. When expectations shifts toward the upper range, mortgage rates have been falling.

This is why it’s all eyes on the Fed this week. Once the Fed adjourns, there’s no more “expectation” — there’s only Fed commitment.

Other than the Federal Reserve’s get-together, there isn’t much new data due for release. The week’s calendar looks like this:

Monday:  Personal Income and Spending reports
Wednesday:  FOMC adjourns from its 2-day meeting
Thursday:  Initial and continuing jobless claim data
Friday:  Pending Home Sales, Jobs Report, Unemployment Rate

It’s unlikely that data will swing mortgage rates until after the Fed’s Wednesday adjournment, but, once that happens, expect bond market attention to shift to the October jobs report set for 8:30 AM ET release Friday morning.  If jobs data is strong, mortgage rates should rise.

All things considered, it’s dangerous to float a mortgage rate this week. If you’re not already locked, talk to your loan officer prior to Wednesday afternoon. Read Greg’s original post.

Look for future posts at www.NoBullAgent.com on issues to watch for in the mortgage market from local lenders in the San Diego area. When choosing a lender, we suggest you talk with a few to make sure you find a representative and company that works for you.  Having a strong relationship with your lender, especially in this market, can be crucial to a successful home buying experience.

To search available listings throughout San Diego County and Southern California.
To save your property searches and receive updates on new properties, please contact us or call at 888-466-2855.

Mortgage Market Weekly Update

Information in this post is provided by Ron McGowan, Senior Mortgage Consultant with PrimeLending.  He is a guest blogger who provides us information from a lender’s perspective.  For additional information on Ron, please visit his website at ILoanSanDiego.com.

Inside Lending Newsletter from Ron McGowan for the week of September 20, 2010

Market Update
INFO THAT HITS US WHERE WE LIVE…Fannie Mae released a survey showing 70% of those polled in June and July feel now is a good time to buy a home.  This is up from a 64% reading in January.  At the same time, 83% of those surveyed think it’s a bad time to sell, which isn’t such a terrible thing, since there’s still plenty of inventory for buyers to choose from.

Another group of industry observers concluded that sales of existing homes hit bottom in July and will rebound in the fall.  They based this on recent reports for purchase mortgage applications and pending home sales, which track signed purchase contracts for existing homes.

The fact remains, homes are now more affordable for more people than they’ve been in years.  Today’s historically low mortgage rates make monthly payments much easier to work into the family budget.  Prices may have bottomed out indeed. The S&P/Case-Shiller Home Price Indexes show that nationally, home prices are 3.6% above levels a year ago.  For buyers who expect to live in their home a while, many observers feel this is clearly a very smart time to purchase.

Review of Last Week
UP YET AGAIN… For investors on Wall Street, positive feelings continue to prevail over negative vibes and uncertainties, as stocks closed higher for the third week in a row. All the major market indexes were up, with the extra strength of the tech sector pushing the Nasdaq up well over 3%.  In addition, all three indexes are now UP for the year.

Worrying investors, and everyone, were things like Thursday’s report that the U.S. poverty rate was at a 16-year high.  Other data showed that real median household income last year was essentially unchanged over 2008.  No surprise then that Friday’s University of Michigan Consumer Sentiment Index came in at its lowest level since August a year ago.  The day before, the Producer Price Index reported wholesale inflation a bit higher than anticipated, which got some analysts concerned that consumers might see price hikes next.

Those fears were quelled Friday with Consumer Price Index (CPI) readings that had inflation well under control at the retail level.  The 1.1% year-over-year gain in the CPI showed that those who feared deflation have nothing to worry about for now.  Other encouraging signs included a rise in Industrial Production for August that met expectations and August Retail Sales that beat forecasts, evidence that consumers may be worried, but they’re still spending!

For the week, the Dow ended UP 1.4%, to 10607.85; the S&P 500 was UP 1.4%, to 1125.59; and the Nasdaq was UP 3.3%, to 2315.61.

It was another mixed week in the bond market, but prices held up enough.  The FNMA 30-year 4.0% bond we watch ended a mere 5 basis points ahead for the week, closing at $102.09.  National average mortgage rates continue at historically low levels, though some observers do expect them to move up a little by the end of the year.

This Week’s Forecast
WOO-HOO, HOUSING AND THE FED!…This week features our two favorite topics.  The Fed’s an easy forecast, as virtually no one breathing thinks they’ll hike the Funds Rate at their meeting on Tuesday.  As usual, however, their policy statement will bear scrutiny, as analysts look for signals that the rate could rise any time soon.

Tuesday’s August Housing Starts should finally show a slight uptick in activity.  August Building Permits are also expected to be up a little, even though home builders remain cautious.  Some experts feel we’re starting to turn the corner in housing, as a bit of growth is predicted in Thursday’s August Existing Home Sales and Friday’s August New Home Sales.

Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months…Last week’s Consumer Price Index report showed inflation still under control. So with economic growth slowing, economists overwhelmingly believe the Fed will keep rates where they are at this week’s FOMC meeting and well into next year.

Subscribe to Ron’s Inside Lending Newsletter at his website at ILoanSanDiego.com and click on the “Contact Me” page.

Look for future posts at www.NoBullAgent.com on issues to watch for in the mortgage market from local lenders in the San Diego area. When choosing a lender, we suggest you talk with a few to make sure you find a representative and company that works for you.  Having a strong relationship with your lender, especially in this market, can be crucial to a successful home buying experience.

To search available listings throughout San Diego County and Southern California, please click HERE.
To save your property searches and receive updates on new properties CONTACT US.

Mortgage Market Weekly Update

Information in this post is provided by Greg Wickstrand, Home Loan Consultant for HomeServices Lending.  He is a guest blogger who provides us information from a lender’s perspective.  For additional posts by Greg, please visit his BLOG.

What’s Ahead for Mortgage Rates this Week:  August 16, 2010
By:  Greg Wickstrand

Mortgage markets worsened last week, putting a pause on the mortgage rate rally that dates to mid-April. Mortgage rates rose last week and home affordability suffered.

The Refi Boom remains in full effect, but rates are not as dazzling as they were a week ago.

It’s somewhat strange that mortgage rates rose last week given the heavy dose of negative-bending news.

• The Federal Reserve noted that the economy “has slowed“
• New unemployment claims rose to a 6-month high
• Retail sales — excluding auto sales — rose less than expected

Mortgage rates often to fall on such news, but last week, they rose. The biggest reason was weak demand on a new 30-year bond issuance from the government. In turn, that weakness spilled over into mortgage bonds, which pushed rates up.

This week, mortgage rates could rise or fall — it depends on how new data influences market sentiment.

• Monday :  Home builder confidence survey
• Tuesday : Housing Starts and Building Permits; Producer Price Index
• Thursday : Jobless claims; 2 Fed members make speeches

Keep a close eye on the housing-related data early in the week. It’s widely believed that housing will lead the economy forward so a rebound in home builder confidence, or a jump in building permits, for example, should push rates even higher.

In the meanwhile, if you haven’t spoken with your loan officer about a refinance, consider reaching out this week. Rates are lower than they’ve ever been in history and more people are getting financing than the news would have you believe. You can’t know until you ask so make that call today.  Read Greg’s original post

Look for future posts at www.NoBullAgent.com every Monday on issues to watch for in the mortgage market from local lenders in the San Diego area. When choosing a lender, we suggest you talk with a few to make sure you find a representative and company that works for you.  Having a strong relationship with your lender, especially in this market, can be crucial to a successful home buying experience.

To search available listings throughout San Diego County and Southern California, please click HERE.
To save your property searches and receive updates on new properties CONTACT US.