Posted by John Martin on Fri, Feb 26, 2010 @ 08:23 AM
Mortgage bond prices rose nicely on Thursday, pushing mortgage backed security yields to their lowest levels in nearly three weeks following soft economic data. As a result, 30YR Fixed interest rates remain at 4.875% to end the week. While Labor Department officials surmised that the rise in jobless claims was a result of delayed reporting from the prior week, the claims have definitely drifted higher following what now appears to have been an overstated plunge in December/January. This morning, bond prices are mixed and have shown little reaction to the second report of Q4 GDP. Growth was revised higher, to 5.9% from 5.7% for the quarter, but personal consumption was revised lower, to 1.7% from 2.0%. Later today, we will receive the U of M's final February consumer confidence index as well as January's existing home sales data. With existing home sales now representing about 90% of all sales, it's about the only housing data (other than valuations) that matters.
Posted by John Martin on Wed, Feb 03, 2010 @ 08:51 AM
Mortgage rates in Massachusetts remianed quite steady to start the week, despite a recent rally in the equities market. The Obama Administration recently released their 2011 Budget/Forecast, providing analyst with a plethora of data to scrutinize. What does this mean for mortgage rates? Well, the budget calls for $1.6 trillion in deficit spending next year, thus placing a strain on Treasury auctions needed to eventually pay-off the debt, thus placing a burden on the yields (%) for mortgage backed securities. Should yields on mortgage backed securities (MBS) rise, a rise on interest rates will surely follow to offset the MBS yield pay-outs to investors. Furthermore, should the Federal Reserve continue its' plan to cease purchasing mortgage backed securities at the end of March 2010, mortgage rates will most certainly rise from the historic levels we've been celebrating for the past 12 months. This is one major reason HomeQuest Mortgage professionals are urging consumers to act now and avoid missing the opportunities in today's marketplace.
The Pending Home Sales report will hit the news wires today to provide us with some insight to the recent trends in the housing market. The National Association of Realtors releases the report, which shows the monthly change in the amount of existing homes (excluding new construction) in which a purchase & sale contract has been signed, however pending a closing date. Pending Home Sales is a leading indicator of the housing activity and economic momentum, as it provides supplemental evidence of consumer confidence. In addition, home purchases stimulate the economy in other retail merchandising, as there are many other housing fixtures needed to complete the furnishing of the home. The data in this report has a two month lag time, so today's data is for the prior month of December 09.
Posted by Jason Evans on Fri, Nov 27, 2009 @ 09:26 AM
Mortgage interest rates are currently at the lowest levels of all time surpassing the best levels from January of this year. The new run lower in mortgage rates has been spurred on by tightening spreads between mortgage backed securities and US treasury debt. The Federal Reserve still has money left in their program to keep mortgage rates low but they have begun to wind it down.
Mortgage rates are at all time lows across the board from 30 year fixed rates to 20, 15 and 10 year fixed all the way to 5/1 and 7/1 adjustable rate loans.
Other good news in the mortgage market to go along with all time low interest rates is the announcement of the first time homebuyer tax credit being extended into next year. Also, the expanded conforming jumbo loan limits will also be carried over into next year. Both of these programs were originally going to expire in 2009. This helps open up the guidelines and allow more borrowers to take advantage of the low mortgage interest rates that are available.
The big current event that is impacting both the mortgage market and the equity markets today is news out of Dubai that Dubai World, the city-state's largest corporate entity, has asked it's creditors for a 6 month break on payments of $60 billion (60,000,000,000) in debts. This has caused concern that the worst of the financial crisis might not be over. Yields on US treasuries have moved lower this morning as stocks have been declining. US treasuries are used as a benchmark for Mortgage Backed Securities which have also seen their yields dropping (leads to lower mortgage rates) this morning.
Posted by Jason Evans on Fri, Sep 25, 2009 @ 02:17 PM
Mortgage interest rates have been falling over the past month back to the best levels of the year. This drop in mortgage rates has happened despite a strong rally in the stock market. Usually when stocks rally, mortgage rates get worse.
Many analysts think that the stock market is overbought and will sell off soon. If that were to happen then we could see mortgage rates move even lower. One thing working against mortgage rates is the Federal Reserve beginning to wind down their purchase of Mortgage Backed Securities (MBS). This program was started at the beginning of the year in an effort to tighten the spread on MBS and bring mortgage rates down. Originally the Fed was going to use $1.25 trillion dollars to buy mortgage backed securities by the end of this year. On Wednesday the Fed announced that instead of spending all $1.25 trillion by the end of this year, they would be slowing their daily purchases of MBS so that the funds are not gone until the end of March 2010. As the Fed buys less MBS each day in order to make the $1.25 trillion last longer and gradually exit the market, mortgage rates could begin to go up.
It is always hard to predict where mortgage rates are headed. In the current times it is even more difficult because of the unprecedented Fed involvement and the uncertainty about how much rates will increase up when the Fed exits the market.
Posted by Jason Evans on Tue, Feb 03, 2009 @ 08:54 AM
Mortgage interest rates have begun to come off the all time lows from early January and seem to have settled in the low 5% range on 30 year fixed mortgages with no points. One of the reasons that rates have begun to increase is all of the planned stimulus packages and spending that newly elected President Obama has on the table. The way these packages will be financed is through increased government borrowing in the form of increased supply of treasury notes. This expectation of increased supply in the bond market has lead to higher yields in all bond markets and caused mortgage backed securities (MBS) to follow with higher yields as well. Along with increased supply pulling the price of bonds down and thus increasing the yield; there is fear among investors that inflation will eventually pick up if the stimulus packages spark an economic recovery.
The Fed is going forward with their program of purchasing MBS on the open market. They have consistently been buying 3 to 4 billion of agency MBS each day. If it were not for this constant demand provided by the Fed, mortgage rates would be much higher than they are today.
On the bright side, as lenders get caught up on loans in their pipeline over the next month they should get more aggressive in the rates they offer on their daily rate sheets in an effort to keep the new loans coming in. This tightening of the spread between lenders rate sheets and MBS pricing could lead to lower rates again sometime in the next month.
While 30 year rates in the high 4% range were nice while they lasted, rates in the low 5% range are nothing to complain about either, especially with the home purchase season fast approaching.
Posted by Jason Evans on Fri, Jan 09, 2009 @ 10:54 AM
The monthly unemployment report was released today and the results were worse than expected. In total it is estimated that 524,000 jobs were lost in December. Economists were expecting job losses to be closer to 500,000 for December. On top of that the numbers for October and November were also revised to show larger losses than were first reported. The unemployment rate has jumped up to 7.2% which is the highest it has been in 16 years.
One bright spot in all of this bad news is that mortgage rates remain at all time lows. This should help a lot of borrowers to free up some money by refinancing their mortgage into lower monthly payments.
Another factor keeping mortgage rates at these historic levels is the fact that the Federal Reserve has begun their program of purchasing Agency Mortgage Backed Securities in an effort to keep rates low. So far it has worked as rates have been available in the 4s at times this week.
Posted by Jason Evans on Tue, Dec 30, 2008 @ 11:50 AM
The consumer confidence report came out this morning and it was worse than expected. The reading shows consumer confidence at 38.0, lower than the expected level of 45.8. This is the lowest monthly reading ever reported by the Conference Board.
As we have discussed in the past, bad news for the economy normally leads to support for mortgage rates. This news that came out today shows that the economy will most likely not be starting a recovery anytime soon and should help keep mortgage rates from going much higher for now.
Mortgage Backed Securities have been under some year end selling pressure lately and the result is mortgage rates have come off their recent lows. The increase in mortgage rates have been minimized by the slow economy and economic reports, like the consumer confidence report from this morning, coming in worse than expected.
Mortgage interest rates are still near historic lows and offer a great opportunity to refinance into lower rates for many people. It is also a good time to take advantage of low house prices combined low fixed mortgage rates and look into buying a home.
You can always check the current mortgage rate options by checking the homepage of our website which is updated daily.
Posted by Jason Evans on Tue, Nov 25, 2008 @ 09:27 AM
The Federal Reserve announced a plan this morning to buy up to $500 billion in mortgage backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. The goal of this move by the Fed is to lower the cost of borrowing on mortgages to borrowers in an effort to support the slumping housing market. The announcement immediately caused a rally in the MBS markets resulting in lower mortgage interest rates across the country.
Current mortgage interest rates in Massachusetts also will be going down today making it a great opportunity for many borrowers to lock in a rate and refinance their home mortgages. Call HomeQuest at 508-839-1117 to see what rate can be locked in for you whether you are looking to refinance your mortgage or need a new mortgage to purchase a home.