Good afternoon, if you can call it that... well, the sun is shining and it's not that hot!
Mortgage rates had a rough day today, getting worse by 0.125% to 0.25% on rate, depending on the program. Deutsche Bank issued a report today that basically says that treasuries will be a more attractive investment than mortgage bonds, and sure enough, they sold off less today than MBS. So, what will happen with mortgage rates? Only time will tell. We have a few important reports this week: retail sales Wed is a strong gauge of consumer spending, while CPI is being released Thursday as a major indicator of inflation. It is expected to be tamer than last month's chart-busting report.
My hope is that mortgage rates/bonds hold their recent low point (read highest rates) and rebound. Eventually, the quality of fixed rate mortgages will bring the investors back. However, this is still shaping up to be a very turbulent and interesting year for the mortgage business, both here in Wisconsin and nationwide. There are still many foreclosures and loan defaults in the future. Stay tuned for updated mortgage rate information and advice. Thanks for your trust and support.
Well, I was certain we'd be moving one way or another in dramatic fashion today (my fear was much worse rates), but the reports today all came out very close to expectations, with a mix of slightly positive and negative news. The unemployment rate was 5.7%, the highest in 4 year. Slightly less jobs were lost than expected. The inflationary data today was also tame, which is a plus for mortgage rates (whenever I say good, plus, positive, it means lower rates).
We might not see much happen today - it's still early to tell. After several days of improvement, today isn't a bad day to lock if your loan is closing next week. You remove any weekend risk, and no one would blame you for locking in the gains we've seen. Long-term, my outlook is still very negative on the economy and financial stocks. I think the worst is still coming. We haven't even talked about credit card portfolios yet, and that bag is just as big as the subprime mortgage market.
Have a great weekend!
GDP missed the mark... 1.9% vs. 2.4% expected. Perhaps the stimulus package and rebate checks didn't quite make the impact that was thought. Another positive for mortgage rates - the inflationary ECI was in line with expectations.
So far today, rates are slightly improved over yesterday's close, with the typical loan being 0.25% cheaper in COST (not rate) than yesterday. We are still waiting for tomorrow's jobs data - initital claims were unexpectedly high at 448,000 vs. 398,000 expected.
It makes sense to watch this information and float, unless you are about to close a loan. Tomorrow's jobs report could move the market dramatically either way, and it will happen before rates even come out. If you're happy with where we are today, or this afternoon, and can't stomach the risk, then lock and ignore tomorrow's markets.
We've seen a rate improvement for two straight days, but the big news is yet to come. Tomorrow, we will be watching intently for the market's reaction to the GDP report. This is the 1st release of the 2nd quarter's number. The Fed will also be watching the employment cost index, which is an indicator of inflation.
Next, we have the monthly Jobs Report on Friday. Today ADP reported a surprise increase in private payrolls, giving the market hope for an upside surprise on Friday. Stay tuned... it's going to be interesting the next couple of days.
Par rates today:
30 year Fixed 6.25%
15 year Fixed 5.875%
5 year ARM 5.875%
On days like today, I am happy. Because my blog yesterday guessed we'd finally get off the lows, and today we have. More bad economic news - jobless claims back above 400K, and housing data that continues to disappoint. We still have a ways to go, but the FNMA 6% coupon is now trading at par in secondary, meaning lenders will be charging a point to get that rate.
I am going to continue to prepare my client list for the final move I expect later this year. I'm talking about rates under 5.5% or even 5.0% one last time. I could be wrong, but being right will be worth so much more - to my bottom line and the financial profile of every client I can help.
Have a great day!
Well, I think we finally hit bottom (read: worst rates of the year). Today, the mortgage markets showed strength, and hopefully, with my fingers crossed, tomorrow we get off this low point. There's not a lot of economic data for the market to be looking for right now, until next week with Consumer Confidence and the monthly jobs report.
I still think there's major economic turmoil coming. I also think we will get one more shot at sub-6% rates, and this time, anyone who didn't take their shot needs to take it. I've read some very eye-opening reports about segments of the housing and financial markets that still have not impacted the numbers yet. But they will, and it won't be good. I personally will be reducing my stock exposure for a while. We haven't hit the bottom yet, and when this is all done, it might even look worse than 1929 did.
At least I paid under $4/gallon to fill my tank last night...
Not that it was a total surprise, but this morning's CPI report has hurt mortgage rates to an extent today. My long-term outlook is still that we will see lower rates again in the not-too-distant future, but for today, we are worse than yesterday. Overall, the damage is only about 35 bps right now, or about 0.125% on the rate for most programs. Not a big deal. We are still in an upward trend from our low on June 16th, and stayed above the recent low set last Friday in the previous down-day. Historically, rates hit their worst point in mid-summer (June 16th, June 11th, 2007, and mid-July 2006), and then improve from there.
Volatility is still very present, with inflation and the Fannie/Freddie news having a big impact. Stay tuned! Again, I'm not locking.
Lots of important numbers came out today. PPI was up 1.8%, but only 0.2% ex-food and energy, the most volatile components. Year over year PPI was up over 9%, but 3% on the core data. The retail sales report was slightly weaker than expected. Normally I would expect bond prices to go up on these reports, and yields (rates) to come down. So far, this is true on the treasuries, and not so much on the mortgage bonds. However, after yesterday's strong comeback right into the close, it's not a surprise to see a slight pullback this morning. We are facing three layers of resistance in the 50 day, 200 day, and 100 day moving averages, which held us back last week as a group.
My initial take today is to float rates and see how the markets digest this data. I will follow this up with an update later today. Have a great morning!
Good morning. I hope everyone had a great weekend. Here is a quick update on mortgage rates today. The Fed gave Fannie and Freddie access to the emergency discount window, and mortgage bonds are suddenly a hot commodity again. Thus, rate are better today than when we left work Friday. Par rates are at or near:
- 30 year Fixed - 6.00%
- 15 year Fixed - 5.50%
- 5 year ARM - 5.50%
Please stay tuned for future updates. We've gotten back over half of what we lost on Friday's major move downward. I'm going to keep floating, as cooler heads are prevailing.
Good afternoon,
I waited until now to post about rates, because this morning was one of the most volatile markets I have seen in years. Fannie and Freddie were down 40%+ this morning again, but have rallied back strongly since. The Dow is still down 200 as I am writing this, and mortgage rates have gotten worse in all of this turmoil.
The 30 year fixed is at 6.000% +/-
The 15 year fixed is at 5.500% +/-
The 5 year ARM is the strongest at 5.375% +/- (interest-only an option too)
While today is not the best for rates, there is an old saying that you never lock rates on Friday and Monday. Lenders hedge themselves ahead of any weekend news, and stock markets are typically strong on "merger Monday's." We are still in an upward trend, and the trend is our friend. Please visit me at www.wihomelend.com or http://wihomelend.activerain.com, or email me at info@wihomelend.com. Thanks for reading, and make it a great weekend.
Mortgage rates are relaxing so far today, with rates being the same as yesterday as of now. The big news so far today is that Fannie and Freddie are selling off hard today - FNM is down 15%, and FRE down 30%. These stocks have lost 80-90% from their 52 week highs. There is much concern that they will both need to raise billions in capital to stay afloat.
Fed chairman Bernanke and Treasury Secretary Paulson are speaking today to Congress on the mortgage crisis.
Jobless claims dropped sharply this week, giving some footing to the struggling stock markets. For now, we will watch and wait. Mortgage bonds are trading between long-term moving averages, and a breakout either way will likely cause a follow-through in that direction. Personally, I think we are going to see better rates soon! Please visit me at www.wihomelend.com, or email me at info@wihomelend.com.
The Wisconsin Home Lending daily mortgage rate blog is up and running once again. It's been a while since I've had good news to report, but here it is:
Rates are improving!
That being said, we still have a long way to go to get back to the rates we saw on January 23rd, March 17th-18th, and May 9th. I still get clients asking about a 5.25% 30 year fixed - I wish I had that to offer right now!
Today's rates:
30 year Fixed - 5.875% to 6.375%
15 year Fixed - 5.375% to 5.625%
5 year ARM - 5.000% to 5.625% (interest-only also available)
The above rates may include discount points, broker/lender fees, and all 3rd party fees (title, closing, recording, appraisal). Since every mortgage is different, please contact me at info@wihomelend.com or at 262-510-2740. Visit us at http://www.wihomelend.com/.