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The Deal on Mortgage Rates This Week – August 29, 2011

Tommy — Mon, 29 Aug 2011 12:59:05 +0000

Last week was another volatile week for mortgage rates. Wall Street alternately sought risk and shunned it, causing mortgage-backed bonds to rise and fall rapidly.

There was a lot to move markets, too, including banking concerns across Europe, inflation figures within the U.S., and a public speech by Fed Chairman Ben Bernanke.

Conforming rates in Texas rose to their highest levels of the week Wednesday afternoon, then receded into the weekend. 3

0-year fixed rates remain above their all-time lows set 2 weeks ago. 5-year ARMs are at all-time lows.

This week, mortgage rates figure to be equally jumpy. As well as a full slate of economic data, because of Labor Day, bond markets will be light on volume. When volume is light, pricing gets volatile.

The week’s calendar of data includes:

Monday : Pending Home Sales Index; Personal Income and Outlays
Tuesday : FOMC Minutes; Fed President Kocherlakota speaks
Wednesday : Factory Orders
Thursday : Jobless Claims; ISM Manufacturing Index
Friday : Non-Farm Payrolls

Of all the reports, though, it’s Friday’s Non-Farm Payrolls that might move mortgage markets the most.

Jobs are crucial to the ongoing economic recovery and, from Wall Street to Capitol Hill, it’s top of mind.

If the jobs report shows more jobs created than expected, or a positive forward trend, expect bond markets to fall, pushing mortgage rates up. On the other hand, if the jobs report is soft, mortgage rates may improve.

We can’t know what rates in Texas will do on any given day, so the best strategy for a shopper is to shop with purpose. Know what you want, and be ready to lock when you see it.

If you wait too long, the rate will be gone.

The Deal on Mortgage Rates This Week – May 16, 2011

Tommy — Mon, 16 May 2011 12:58:13 +0000

Mortgage markets worsened overall last week for the first time in 5 weeks.

Better-than-anticipated economic data plus dwindling concerns for Greece’s sovereign debt combined to a spark a bond sell-off. Conforming mortgage rates moved higher in Texas as a result.

Rate shoppers were hit especially hard last Tuesday.

At Monday’s close, conventional fixed- and adjustable-rate mortgages were posting their lowest levels of 2011, but by Tuesday’s market close, rates had climbed as much as 0.250 percent across the board. In some cases, more.

The spike highlights how quickly mortgage rates can change in a recovering economy, and why “floating” a rate can be costly.

This week, mortgage rates figure to be equally volatile. There’s a large set of market-changing data planned for release, and several Fed members have planned public appearances, including a 9:00 AM ET, Monday morning kickoff from Fed Chairman Bernanke.

Monday : Bernanke speech; Homebuilder Confidence Survey
Tuesday : Housing Starts; Building Permits
Wednesday : FOMC Minutes
Thursday : Existing Home Sales

In addition, Thursday brings a second rate shopper-risk.

The Initial Jobless Claims will be released at 8:30 AM ET and it will be closely watched by Wall Street. Initial claims are sharply higher since the end of April and investors believe the jobs market is key in a sustained economic recovery. If the data shows that initial claims receded, mortgage rates are expected to rise in response.

Morning Market Update 12/18/09

Tommy — Fri, 18 Dec 2009 14:27:02 +0000

Currently down around 12 bps, there are no economic reports coming out today.

Yesterday was a decent day in terms of mortgage bonds, as we were in the green practically all day.

Bernanke got voted in for a second term as Fed Chairman, and the Fed stated that they intended to keep rates low for an extended period of time, however, the MBS purchase program is going to end on March 31, 2010. The MBS (mortgage backed securities program) is where the Fed buys pools of various mortgage bonds in case you didn’t know.

Let’s clear something up very quickly.

When speaking to several clients, I hear “Oh the Fed is ‘reducing’ rates” or “I heard the Fed is keeping rates at 0%” and expect a 0% mortgage rate on their home loan- THIS DOES NOT MEAN MORTGAGE RATES FOLKS.

The Fed does not control mortgage rates. Mortgage Backed Securities are what determine mortgage rates and it depends on how those securities are traded and at what price that result in the current market mortgage rates.

What the Fed controls is the “Fed Funds Rate” or “Discount Rate” and that is it. These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans, and most importantly the rate in which banks charge one another to lend money to each other overnight (overnight lending rate). This is basically for one day loans that banks facilitate between themselves to ensure liquidity. When the Fed announces a “cut in rates”, mortgage rates most often will actually move in the opposite direction as the Fed change, as this has to do with the dynamics within the financial markets.

Please read this as it is very important!

MBS Program set to expire soon
Tax Credit Ending soon
FHA Guidelines possibly tightening up
RESPA Changes

Folks, if you are looking to buy a home or refinance, NOW IS THE TIME TO DO IT while rates are still low and the incentives are still here. This is not going to last forever!

Take advantage while you can, and have a fantastic Friday!