MMG Update - Thursday, November 20, 2008 9:35am ET
Current Trend Direction: Sideways along 200-Day Moving Average for 13th consecutive session
Risks favor: Carefully Floating
Current Price of FNMA 6% Bond: $101.41, +16bp
Over the years, MMG has continued to help the mortgage community discover and understand the disconnect between the 10-year Note and Mortgage Bonds. In recent times that disconnect has been very clear to anyone in our world - but in the past 24 hours, the disconnect has been dramatic. Since yesterday the 10-year Note has risen by 285bp, while Mortgage Bonds have risen 12bp!!! Do you think the media knows this? NO. Use this to inform your relationship partners and clients of what really drives fixed rate mortgages.
So what happened? Yesterday the Fed Minutes from the October Fed Meeting were released. The Minutes expressed concern over the health of the economy and their future targets for employment and growth were lowered. But the big news was the "D" word. The Fed, after years of being concerned with inflation, now say they are concerned about deflation. This news shocked the financial markets, pushing Stocks sharply lower while directing enormous money flow into ultra-safe Treasury Notes.
(the story continues tomorrow...)
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Marina Vialtsina
Showing posts with label bond market. Show all posts
Showing posts with label bond market. Show all posts
Friday, November 21, 2008
Wednesday, October 22, 2008
30-Year Mortgage Rates Rise This Week
30-Year Mortgage Rates Rise This Week
Freddie Mac's Primary Mortgage Market Survey, released Thursday, shows the 30-year fixed-rate mortgages rose to an average of 6.09 percent this week, with an average 0.7 point.
Rates are up from last week when they averaged 5.78 percent, but are lower than last year at this time, when 30-year rates averaged 6.42 percent.
Thirty-year fixed-rate mortgages are still more than 0.5 percentage points below this year's peak of 6.63 percent, set the week of July 24th.
15-Year Rates at 5.77%
The 15-year fixed-rate mortgage this week averaged 5.77 percent with an average 0.6 point, up from last week when it averaged 5.35 percent. A year ago at this time,15-year mortgage rates averaged 6.09 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.02 percent this week, with an average 0.6 point, up from last week when it averaged 5.67 percent. A year ago, the 5-year ARM averaged 6.15 percent.
One-year Treasury-indexed ARMs averaged 5.16 percent this week with an average 0.5 point, up from last week when it averaged 5.03 percent. At this time last year, the 1-year ARM averaged 5.60 percent.
Market Remains Soft
"The latest housing information for the third quarter continues to show some softness in prices and sales activity," said Frank Nothaft, Freddie Mac vice president and chief economist.
He noted that house prices fell 5.3 percent over the twelve months ending in July – weaker than the market consensus – according to the Federal Housing Finance Agency's purchase-only house price index.
Meanwhile, the August median sales price for existing single-family homes fell 9.7 percent over the year earlier, the largest 12-month drop since records began in 1968, according the NATIONAL ASSOCIATION OF REALTORS®.
Source: Freddie Mac
Freddie Mac's Primary Mortgage Market Survey, released Thursday, shows the 30-year fixed-rate mortgages rose to an average of 6.09 percent this week, with an average 0.7 point.
Rates are up from last week when they averaged 5.78 percent, but are lower than last year at this time, when 30-year rates averaged 6.42 percent.
Thirty-year fixed-rate mortgages are still more than 0.5 percentage points below this year's peak of 6.63 percent, set the week of July 24th.
15-Year Rates at 5.77%
The 15-year fixed-rate mortgage this week averaged 5.77 percent with an average 0.6 point, up from last week when it averaged 5.35 percent. A year ago at this time,15-year mortgage rates averaged 6.09 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.02 percent this week, with an average 0.6 point, up from last week when it averaged 5.67 percent. A year ago, the 5-year ARM averaged 6.15 percent.
One-year Treasury-indexed ARMs averaged 5.16 percent this week with an average 0.5 point, up from last week when it averaged 5.03 percent. At this time last year, the 1-year ARM averaged 5.60 percent.
Market Remains Soft
"The latest housing information for the third quarter continues to show some softness in prices and sales activity," said Frank Nothaft, Freddie Mac vice president and chief economist.
He noted that house prices fell 5.3 percent over the twelve months ending in July – weaker than the market consensus – according to the Federal Housing Finance Agency's purchase-only house price index.
Meanwhile, the August median sales price for existing single-family homes fell 9.7 percent over the year earlier, the largest 12-month drop since records began in 1968, according the NATIONAL ASSOCIATION OF REALTORS®.
Source: Freddie Mac
Tuesday, October 14, 2008
100 most expensive ZIP codes
Some Housing Markets Still Thriving
Prices are holding up nicely in the ZIP codes of the rich and famous.
Forbes magazine examined the top 100 most expensive ZIP codes in the United States and concluded that most saw strong price appreciation in the last 12 months.
Here are the top-10 most expensive ZIP Codes and the median home sales prices:
Fisher Island, Fla., Miami-Dade County, 33109. Median sales price: $3.85 million
Alpine, N.J. Bergen County, 07620, $3.59 million
Mill Neck, N.Y. Nassau County, 11765, $3 million
Newport Coast, Calif., Orange County, 92657, $2.8 million
Water Mill, NY, Suffolk County, 11976, $2.72 million
Atherton, Calif., San Mateo County, 94027, $2.7 million
Santa Barbara, Calif., Santa Barbara County, 93108, $2.7 million
Wainscott, N.Y., Suffolk County, 11975, $2.56 million
Rancho Sante Fe, Calif., San Diego County, 92067, $2.47 million
Beverly Hills, Calif. Los Angeles County, 90210, $2.41 million
Prices are holding up nicely in the ZIP codes of the rich and famous.
Forbes magazine examined the top 100 most expensive ZIP codes in the United States and concluded that most saw strong price appreciation in the last 12 months.
Here are the top-10 most expensive ZIP Codes and the median home sales prices:
Fisher Island, Fla., Miami-Dade County, 33109. Median sales price: $3.85 million
Alpine, N.J. Bergen County, 07620, $3.59 million
Mill Neck, N.Y. Nassau County, 11765, $3 million
Newport Coast, Calif., Orange County, 92657, $2.8 million
Water Mill, NY, Suffolk County, 11976, $2.72 million
Atherton, Calif., San Mateo County, 94027, $2.7 million
Santa Barbara, Calif., Santa Barbara County, 93108, $2.7 million
Wainscott, N.Y., Suffolk County, 11975, $2.56 million
Rancho Sante Fe, Calif., San Diego County, 92067, $2.47 million
Beverly Hills, Calif. Los Angeles County, 90210, $2.41 million
Wednesday, January 23, 2008
Fed decision to lower the rate...
After Fed decision to lower the rate, I get phone calls from my clients asking me what rate they can get now. Even though mortgage companies most likely will lower rate soon, it does not happen right away, after Fed's decision, and did not happen yet.
The common question is why?
What the Fed did on Tuesday will not directly lower mortgage rates. Mortgage rates are not tied to the Fed rates, they are tied to the Treasury rates.
So the bond market is the influence over mortgage rates. When the bond market goes up – mortgage rates go down and vice versa.
The common question is why?
What the Fed did on Tuesday will not directly lower mortgage rates. Mortgage rates are not tied to the Fed rates, they are tied to the Treasury rates.
So the bond market is the influence over mortgage rates. When the bond market goes up – mortgage rates go down and vice versa.
Monday, November 19, 2007
Market Update
Last Updated: 11/19/2007
Monday's bond market has opened in positive territory following another weak morning in stocks. The Dow is currently down 167 points while the Nasdaq has lost 35 points. The bond market is currently up 10/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.
There is no relevant economic news scheduled for release today. The rest of this holiday-shortened week brings us the release of three factual economic releases. However, none of them are likely to affect mortgage rates much. The bond market is expected to close early Wednesday and Friday and be closed the entire day Thursday in observance of the Thanksgiving Day holiday. In addition, I expect to see light trading in the financial markets most of the time that the markets are open.
Monday's bond market has opened in positive territory following another weak morning in stocks. The Dow is currently down 167 points while the Nasdaq has lost 35 points. The bond market is currently up 10/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.
There is no relevant economic news scheduled for release today. The rest of this holiday-shortened week brings us the release of three factual economic releases. However, none of them are likely to affect mortgage rates much. The bond market is expected to close early Wednesday and Friday and be closed the entire day Thursday in observance of the Thanksgiving Day holiday. In addition, I expect to see light trading in the financial markets most of the time that the markets are open.
Wednesday, November 14, 2007
Wednesday's bond market...
Wednesday's bond market has opened in negative territory despite weaker than expected economic news. The stock markets are relatively calm with the Dow up 20 points and the Nasdaq down 1 point. The bond market is currently down 8/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.
The Commerce Department gave us October's Retail Sales figures early this morning, saying that sales rose 0.2% last month. This matched forecasts, therefore, has not had a significant impact on the bond market or mortgage rates today.The Labor Department posted October's Producer Price Index (PPI). They said that the overall index rose 0.1%, while the more important core data reading remained unchanged from September's levels. These readings were 0.2% below forecasts, which is very good news for bonds and mortgage rates. However, the bond market has failed to react to the news as it was expected to, keeping this morning's mortgage rates from improving.October's Consumer Price Index (CPI) will be released early tomorrow morning. This index is similar to today's PPI, except it measures inflationary pressures at the more important consumer level of the economy. The overall portion is expected to show a rise of 0.3% while the core data is expected to rise 0.2%. If we see weaker than expected readings as we did in today's report, we should see mortgage rates improve tomorrow.
The Commerce Department gave us October's Retail Sales figures early this morning, saying that sales rose 0.2% last month. This matched forecasts, therefore, has not had a significant impact on the bond market or mortgage rates today.The Labor Department posted October's Producer Price Index (PPI). They said that the overall index rose 0.1%, while the more important core data reading remained unchanged from September's levels. These readings were 0.2% below forecasts, which is very good news for bonds and mortgage rates. However, the bond market has failed to react to the news as it was expected to, keeping this morning's mortgage rates from improving.October's Consumer Price Index (CPI) will be released early tomorrow morning. This index is similar to today's PPI, except it measures inflationary pressures at the more important consumer level of the economy. The overall portion is expected to show a rise of 0.3% while the core data is expected to rise 0.2%. If we see weaker than expected readings as we did in today's report, we should see mortgage rates improve tomorrow.
Tuesday, October 2, 2007
Monday's Bond Market
Monday's bond market has opened in positive territory following a weaker than expected manufacturing related report. The stock markets are also showing gains with the Dow up 114 points and the Nasdaq up 22 points. The bond market is currently up 12/32, but we will likely still see an increase in this morning's mortgage rates of approximately .250 of a discount point due to weakness late Friday.
Today's news came from the Institute for Supply Management (ISM) who said that their manufacturing index for September fell to 52.0. This was lower than expected, indicating that manufacturer sentiment is waning. This is good news for bonds and mortgage rates because it could mean slowing manufacturing activity. That could ease inflation concerns and make mortgage-related bonds more attractive to investors.
Today's news came from the Institute for Supply Management (ISM) who said that their manufacturing index for September fell to 52.0. This was lower than expected, indicating that manufacturer sentiment is waning. This is good news for bonds and mortgage rates because it could mean slowing manufacturing activity. That could ease inflation concerns and make mortgage-related bonds more attractive to investors.
Monday, October 1, 2007
Three monthly economic reports
from 9/30/07
This week brings us the release of only three monthly economic reports for the bond market to digest. The first report of the week comes late tomorrow morning when the Institute for Supply Management (ISM) will post their manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting a small decline from the 52.9 reading last month to 52.5 this month. The 50.0 benchmark is extremely important because below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall further tomorrow morning.
The next release is Thursday when the Commerce Department will post August's Factory Orders data. This manufacturing sector report is similar to last week's Durable Goods Orders release, but includes orders for non-durable goods. It can usually impact the financial markets enough to change mortgage rates if it varies from forecasts by a wide margin. Current forecasts are calling for a decline in new orders of approximately 2.5%. An unexpected rise could drive mortgage rates higher, while a weaker than expected reading should push them lower Thursday.
This week brings us the release of only three monthly economic reports for the bond market to digest. The first report of the week comes late tomorrow morning when the Institute for Supply Management (ISM) will post their manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting a small decline from the 52.9 reading last month to 52.5 this month. The 50.0 benchmark is extremely important because below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall further tomorrow morning.
The next release is Thursday when the Commerce Department will post August's Factory Orders data. This manufacturing sector report is similar to last week's Durable Goods Orders release, but includes orders for non-durable goods. It can usually impact the financial markets enough to change mortgage rates if it varies from forecasts by a wide margin. Current forecasts are calling for a decline in new orders of approximately 2.5%. An unexpected rise could drive mortgage rates higher, while a weaker than expected reading should push them lower Thursday.
Wednesday, September 26, 2007
The Rule is Good News is Bad News and vice versa
"When it comes to the Bond Market, the rule is good news is bad news and vice versa. Durable Goods was reported at -4.9%, which was lower than expectations of -3.5% and bad economic news, which should be good for Bonds. But Bond prices have actually worsened because the 200-day Moving Average ceiling is too difficult to break.
Technically the 200-day Moving Average is powerful resistance by itself, but the 25-day Moving Average is also close by, making this dual ceiling of resistance too tough to break. Because of these factors, I am recommending a locking stance for today."
Technically the 200-day Moving Average is powerful resistance by itself, but the 25-day Moving Average is also close by, making this dual ceiling of resistance too tough to break. Because of these factors, I am recommending a locking stance for today."
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