Weekly Update
Weekly Mortgage Rate Update - 6/22/2009
SORRY NO VIDEO THIS WEEK!
This is Tim Alston with 1st Metropolitan Mortgage in Hoboken, NJ with this week’s update.
Today is Monday, June 22nd and your 30 Year Fixed Rate Mortgage is pricing out at 5.375% (call for APR). Home Loan Rates have been extremly volatile over the last couple of weeks due to the major supply of Securities on the market, we hope this week’s supply isnt to harsh and keeps rates at these historically low levels.
Bonds and home loan rates began the week looking good - and remembering that inflation is bad news for both Bonds and rates, they were helped along by good news on the inflation front. Inflation at the wholesale or producer level remained tame in May, and at a consumer level, inflation readings came in lower than expected, with a year-over-year reading at its lowest level since 1950. These are good signs that inflation hasn’t become an issue yet. However, inflation will be a concern down the road, due to the massive stimulus being injected into the economy. It is said that rates are like a boat floating atop the sea of inflation…as inflation rises, so will home loan rates. If you or someone you know should be acting on today’s still low home loan rates, please get in touch soon.
However, Bonds and home loan rates reversed course midweek and worsened, as money see-sawed back over to Stocks. They were also pressured to worsen by the enormous amount of Bond supply hitting the markets - as too much supply of anything will naturally cause the price to move lower…and in this case, has caused home loan rates to move higher. Bonds have worsened when additional supply has been announced, causing home loan rates to climb.
This week we have the Fed’s next regularly scheduled Federal Open Market Committee meeting, followed by their Policy Statement and Interest Rate Decision coming on Wednesday afternoon. It will be important to hear the Fed’s comments on the economy and inflation. And speaking of the Fed and inflation, the Fed’s favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index found within the Personal Income Report, will be released on Friday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
I will continue to keep you posted as things happen. Please feel free to call or email me with any questions.
Make it a great week.
Weekly Mortgage Rate Update - 6/15/2009
This is Tim Alston with 1st Metropolitan Mortgage in Hoboken, NJ with this week’s update.
Today is Monday, June 15th and your 30 Year Fixed Rate Mortgage is pricing out right around 5.375% (call for APR).
Another wild week in the markets last week seeing Home Loan Rates rise again but started to retract on Thursday and Friday. Today we are seeing a nice gain as well in the Bond Market further reducing rates.
The reason we are seeing rates come up again is due to all the added supply in the market place, there is no way the Feds can come in and buy up all the supply of these securities so it is driving the prices down. We got news last Thursday that Paulson & Co. hedge fund were going to purchase MBS (Mortgage Backed Securities) and this helped reduce some of the supply and in turn helped reduce our home loan rates a little bit.
This week we have another action packed week of economic reports. On Tuesday we will get a read on the housing market with the Housing Starts and Building Permits reports. This will have an impact on our rates.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and Home Loan Rates improve, while strong economic news normally has the opposite result.
I will be sure to reach out to you if any major swings in the market take place.
Make it a great week.
Daily Mortgage News
Dismal Unemplyment Numbers Help Push Home Loan Rates Lower - 7/2/2009
The Labor Department released another dismal Jobs Report; the US lost 467,000 jobs in June. We were expecting a loss of 365,000. This made the unemployment rate rise to 9.5%, its highest level since August 1983. The weak Job numbers indicate that the recession continues at concerning levels.
The US Dollar has strengthened significantly on the news of the European Central Bank held its benchmark rate at 1% to help stimulate the European economy. Oil prices also had a sharp decline today on this news.
I recommend floating for now, but be prepared to lock as the markets are still very volatile. Tomorrow the markets are closed, so have a safe and Happy 4th of July!!
Daily Market Update - 7/01/2009
Another dismal Jobs Report should be released tomorrow as the numbers are showing a loss of 473,000 jobs in June. Much worse than expectations of 394,000 jobs.
China’s manufacturing sector has expanded and this news has helped Stocks rise this morning.
I am recommending floating for now, if anything changes, I will let you know.
Mortgage Bonds may be tested later this afternoon - Job Market Conitnues to be weak - 6/25/2009
The Fed’s stated yesterday in their Monetary Policy Decision and Statement that they may start looking to inflation as a threat down the road; this made Mortgage Bonds drop lower. Luckily Bonds finished the day unchanged.
Initial Jobless Claims came in a bit weaker than expected, indicating the job market continues to be weak and slow in stabilizing.
I am recommending floating for now to see ho Bond prices react to the government’s auction of 7-Year Notes this afternoon. I will let you know if things change.
Fed Day Today - Looking For Their Statement Later Today - 6/24/2009
The Feds will release their Monetary Policy Decision and Statement later today around 2:15pm. While we already know there will be no change to the Fed Funds Rate, I will be listening for any potential news that may move the financial markets. Some examples of this: if the Fed indicates it will expand its purchase of long-term Treasuries, Mortgage Bonds may see a nice boost. If not, however, they may decline therefore increasing Home Loan Rates.
Durable Orders came in better than expected for May, led by orders for airplanes and machinery. This is another encouraging sign that the economic slump is starting to ease.
I am recommending floating into the Fed’s statement later today. Please be ready to lock if things start to change.
Feds Meeting begins today - let’s hope the outcome of their statement brings lower home loan rates - 6/23/2009
Mortgage Bonds started out down this morning, pushing home loan rates higher, but have since regained all the losses and climbed into positive territory.
Existing Home Sales came in below expectations. The Fed Meeting begins today, although the Feds will not change the Fed Funds Rate, there is speculation the Fed will buy more longer-term Treasuries, which may jumpstart a downturn in Home Loan Rates.
I am recommending floating for now, I will let you know if things change.
