Each week, I participate in Bankrate.com’s Mortgage Rate survey and this week’s results may help you make a money-saving decision.

The Predictions

Here’s what the group is saying:

• 31% predict mortgage rates will increase
• 16% predict mortgage rates will decrease
• 53% predict mortgage rates will remain unchanged

I expect mortgage rates to remain unchanged.

My advice not be appropriate for your specific situation and I’m not always right. You may be better off trying to eat super cold ice cream really fast.

Either way, here’s what I told Bankrate.com:

“With bond markets being abandoned last week, rates took a slight increase as predicted. I do not foresee any “market-shattering” news to come out that will swing mortgage rates in either direction, however the day-to-day volatility is still there and should be followed closely. Remember, there is lot more room for mortgage rates to rise than improve, so be on the defense.”

Rates are very sensitive these days, so you must be prepared to lock. Gambling should be completely out of the question.

Floating vs. Locking – What’s Your Strategy?

People often forget that today’s mortgage rates are a gift, but instead, are treated as a given.

In our current mortgage environment, consumers must also understand that underwriting is actually a tad bit more important than the mortgage rate itsef. The lowest rate does you absolutely no good if you can’t close on it.

With that being said, the Fed has exited the mortgage bond market and the economy is already on it way to recovery, so investors will be taking their money out of the safe-haven (bonds) and into the equity markets, causing rates to inch up. Rates fluctuate week to week, but the point where you save money is knowing what rates are doing DAILY. One adverse intra-day reprice can cost you thousands in the long-run, and this is where it pays to have a knowledgeable and market-savvy loan officer on your side.

If you are looking to purchase or refinance your home, get with a great lender, start on a loan application, know your payment limits, and have their number on SPEED DIAL (you think I’m kidding, but I’m not). This way you’ll be ready to lock in and beat any bad news later on.

I’m always available for phone calls or emails. Applications are about a 5 minute process, and can be done over the phone or via my online secure-application.

Every week, I participate in Bankrate.com’s Mortgage Rate survey and this week’s results may help you time a rate lock and save some money.

Conventional and Conforming Mortgage Rates Only

The Bankrate.com survey is for conventional, conforming mortgages only. It does not apply to FHA mortgages, VA mortgages, USDA mortgages and it’s not specific to Texas mortgage rates only. In addition, unique property types such as non-warrantable condos and condotels may be excluded, so keep that in mind.

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The Predictions

Here’s what the group is predicting:

• 39% predict mortgage rates will increase
• 22% predict mortgage rates will decrease
• 39% predict mortgage rates will remain unchanged

I expect mortgage rates to increase.

My advice not be appropriate for your specific situation and I’m not always right. Ultimately, you may find your time better spent by eating a Philly Cheese Steak and watching Gilligan’s Island re-runs.

Either way, here’s what I told Bankrate.com:

“With lots of market-moving reports on tap the remainder of this week, mortgage rates will see a spike as last week’s gains are now diminishing.”

Ever since the Fed exit on March 31, rates have been extremely volatile, and while rates are still low, there is definitely a lot more room for them to get worse than improve.

Floating vs. Locking – What’s Your Strategy?

The economy is starting to rebound and the Fed has already been talking about increasing the Fed Funds Rate. With this type of talk on the horizon, mortgage bonds are seeing some major swings. Key levels of resistance are pushing mortgage-backed securities back down in tight ranges, and when this happens, usually we see a spike in rates.

If you are looking to purchase or refinance your home, get with a great lender and start on a loan application. This way you’ll be ready to lock in a great rate when ready, willing, and able.

Remember, the longer you sit on the fence, the more it may cost you.

Mortgage markets improved yesterday after the Federal Reserve released its March 16, 2010 meeting minutes. It’s good news for in Houston home buyers and rate shoppers — rates could have just as easily gone the other way.

The Fed Minutes is a detailed recap of the debate and discussion that shapes the nation’s monetary policy. The notes are dense; it takes 3 weeks to compile them for publication.

As compared to the more well-known, post-meeting press release, the Fed Minutes are extremely lengthy. For example:

• March 16 press release : 451 words
• March 16 meeting minutes : 6,152 words

If the press release is the executive summary, the Fed Minutes are the novel.

The extra words matter.

The minutes recount what the Fed did, how the Fed did it, and what the Fed plans to do next – and, in these minutes, Wall Street looks for clues.

This is why the report is important to every rate shopper in the country.

When the Federal Reserve publishes the minutes from its meetings, it leave clues about the groups next policy-making steps.  For example, in March’s Fed Minutes, it’s clear that the Fed’s concern about inflation is hugely diminished and that’s a major plus for the mortgage bond market.

Inflation causes mortgage rates to rise. The absence of inflation, therefore, helps them to fall.  This improves home affordability, among other things.

Similarly, the Fed Minutes note that real estate sales may have been worse throughout the winter months if not for low mortgage rates and the sense among Americans that home prices were troughing. We may infer, therefore, that rising rates may suppress home sales later this year.

Markets are always looking for clues from inside the Fed and the last meeting’s minute signal that the economy is on its way up.

If you’re looking for a bargain in the housing market, your window to act may be closing.

Last week mortgage markets closed unchanged (meaning no increase or decrease in rates), but that’s not to say mortgage rates were calm. Monday through Wednesday, rates improved steadily before a swift, late-week sell-off flushed all the gains down the toilet.

Mortgage rates have been very low for a very long time, against the expectations of most market experts, and consumer’s “comfort level” with these rates are at an all time high.

Ask Uncle Jimmy what he paid on his mortgage back in ’85 – I bet it’s not in the single digits.

The quick reversal that took place on Thursday-Friday is signaling that the markets are preparing for change.

One key story from last week was the Federal Open Market Committee’s scheduled Tuesday meeting. Upon adjournment, the Fed voted 9-1 to hold the Fed Funds rate in its current target range near 0.000% and reiterated its plan to keep rates low for “an extended period of time”.

Kansas Fed President Thomas Hoenig was the lone dissenting vote. (Boo to you Tommy Boy)

For rate shoppers in Texas , take note.

The Fed specifically mentioned that the its $1.25 trillion mortgage buyback program will end, as planned, March 31, 2010 (ya, this is in 9 days).  This could force rates higher over the next two weeks because, according to the Fed, the existence of a buyback program forced rates lower by 1 percentage point in 2009 and it’s expected that the markets will give back some of that 1 percent, leading to higher mortgage rates for conventional and FHA borrowers.

This week, in addition to the buyback program’s looming end-date, there’s several other potential influences on mortgage rates:

1. The Existing Home Sales data for February is released Tuesday, along with the Home Price Index
2. The New Home Sales data for February is released Wednesday
3. Consumer Confidence data hits Friday

Strength in any — or all three — of these reports should put pressure on mortgage rates to rise.

But there’s one wildcard this week and that’s the aforementioned Kansas Fed President Hoenig’s scheduled speech Wednesday morning. Typically, Fed members stay on message when making public appearances, but Hoenig is expected to talk about why rates should be higher, and what the Fed needs to do to prepare the economy for late-2010 and beyond.

His words could lead Wall Street to rethink its position on the mortgage bond market and that could cause rates to spike Wednesday afternoon. Either way, have an itchy trigger finger this week if you’re looking to enter into a sales contract or are looking to refinance.

Mortgage rates remain volatile and are still relatively low. If you’re unsure of whether now is a good time to lock in, consider that there’s a lot more room for rates to rise than to fall right now – especially with momentum shifting for the worse.

We have been having a pretty nice run as of lately, I’ll have to admit:

Mortgage rates are super low, home prices are stabilizing, free $$$ from the government is going in our back pockets, and best of all, spring’s right around the corner.

Now that the economy is headed a bit more in the right direction, “mortgage-rate-reality” is going to start setting in for a lot of folks.

“Damn, Tommy – That 5% sounded really good last month. I wish we would of locked it in.”

“Yes, Mr. Johnson, I was telling you this, but remember you were telling ME that you were expecting that 3% , as well as the return of Growing Pains? Well look at us now. No Kirk and no 3%.”

Just last week, mortgage markets worsened with the  little economic news that came out. It just wasn’t enough to push markets in either direction and the momentum trading and re-balancing of portfolios drove mortgage rates higher, on average.

FHA and conventional mortgage rates in Texas rose last week, marking the first time that’s happened this month.

Like I said before, mortgage rates have been on impressive streak and are priced far better than what most experts predicted.

Weaker-than-expected economic data is one reason why.  Lack of economic data may be another.

This week, however, data returns.

• Monday : Industrial Production and Home Builder Index
• Tuesday : Housing Starts and Building Permits
• Wednesday: Consumer Confidence
• Thursday : Producer Price Index and Initial Jobless Claims
• Friday : Consumer Price Index and Continuing Jobless Claims

And, as if all that weren’t enough to spook you, the Federal Open Market Committee meets for a scheduled, 1-day event Tuesday (tomorrow).

The Federal Reserve is expected to vote to hold the Fed Funds Rate in its current target range near 0.000%, but that doesn’t mean mortgage rates won’t change. Markets are responsive to the FOMC’s post-meeting press release and any clear talk of economic strengthening can easily drive rates higher.

A friendly reminder: The Fed does NOT control short-term mortgage rates, only the Fed Funds Rate. This is the overnight lending rate that banks charge each other.

So basically,  this week Wall Street is in Wait-and-See Mode with plenty to look at.

If you’re floating a mortgage rate, or waiting to lock, be prepared for wild swings – especially leading up to Tuesday afternoon’s FOMC adjournment.

Now’s the time to work with a mortgage professional that understands all this mumbo-jumbo and can get you a great deal, especially with all this volatility going on.

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Tommy is a senior mortgage consultant with Envoy Mortgage. For a free mortgage consultation, you can email him at
tommy@tr-mg.com. You can also find him on Twitter at @RightMtgGuy.

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Results on the 10 year note auction came back and they are pretty bad.

If you have time, call your Texas mortgage lender and secure your rate ASAP!

Here’s what’s going on today:

Today’s 4.5 FNMA bond opened up at 2.0625, and currently we are testing the second level of resistance and are up about 6 basis points (bps). Rates are REALLY REALLY good right now, and if you have a refi or purchase transaction going on, I would suggest locking in today and NOT risking “a better deal”. Based on the 200 day moving average (200 DMA), it looks like rates will most likely be going up soon. As for how much, there’s no telling- which is why I am advising all transactions to be locked and loaded now.

Best,

Tommy

by Victor Burek –

In a volatile session, mortgage rates ended yesterday’s session unchanged as a small rally in benchmark Treasuries helped support the MBS market.  Following weaker than expected economic data in the morning, rates rallied. However as profit taking took place later in the day, early session strength was lost and MBS prices returned to opening levels.  Overall, even though prices moved about a relatively wide range, rates remained unchanged on the day.

The Mortgage Bankers’ Association this morning released their weekly applications index. This data tracks the weekly change in the amount of mortgage applications at major lenders.   An increasing trend is positive for the economy in two ways.  First, more home purchases leads to more home construction and consumer spending as the home buyer buys items to fill the new home.  Second, higher amounts of refinancing  should also lead to higher consumer spending as homeowners refinance to lower rates and lower payments giving them more money to spend into the economy.   The report shows that purchase applications have fallen again down 4.7% following last week’s plunge of 11.7%.  The refinance activity posted a modest 1.4% increase following the prior week’s 11.3% increase as homeowners rush to lock in low mortgage rates.

Besides the mortgage application data released by the MBA, we also received a read on housing construction from the Commerce Department, Housing Starts.  This data totals the number of new homes that construction has started on an annualized basis.  More home construction leads to more construction jobs and increased spending as goods are bought to build and furnish new homes; as such, MBS generally move higher with a lower reading while the stock market likes to see increasing housing starts.     More importantly, this report  totals the number of homes where a building permit has been issued.   Recent reports have indicated a bottoming of this data, economists surveyed expected this report to continue that trend.

The report indicated that home builders are breaking ground on much fewer homes than expected.  Housing starts plunged almost 11% to a yearly pace of only 529,000.  Housing permits also came in considerably lower than expected at 552,000 after last month’s annual pace of 575,000.

The final report to hit  news wires this morning was the Consumer Price Index.  This report measures the change to the average price level of a fixed basket of goods and services purchased by consumers which represents the rate of inflation.   All recent reports have shown inflation to be of no concern today and that trend was expected to continue.   Like the PPI report we received yesterday, this data gives us two readings, overall CPI and the core CPI.  The core reading strips out food and energy prices due to their volatility.

The report indicated that consumer prices rose 0.3% in October, this  followes a 0.2% rise last month. The core rate moved higher by 0.2%, matching last month’s increase, both slightly higher than expected.   On a year over year basis, overall consumer prices are down 0.2% while the core rate shows a 1.7% increase in consumer prices, which is within the Fed’s comfort zone.

Reports from fellow mortgage professionals indicate that mortgage rates are unchanged from yesterday.   This keeps the par 30 year conventional rate mortgage in the 4.625% to 4.875% range for well qualified consumers.  To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% and pay all closing costs including an estimated one point loan origination/discount/broker fee.  If you are seeking to access equity in your home, you should expect either higher closing costs or a higher interest rate.

Is everybody who is closing in the next 30 days locked yet?

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For today current VA, FHA, USDA, Jumbo, Home Equity, Refinance Rates, contact your Texas Refinance Lender today!