30-year conventional: Loan $130,000-$175,000---5.25-5.625%
Loan $175,000-$230,000---5.25-5.625% (almost 0.5% lower than last week)
Loan $230,000 to max ($417,000) --- 5.125-5.375%
30-year FHA: Loan $90,000-130,000 --- 5.25-5.625% (up to 0.875% lower than last week)
Loan $130,000-170,000 -- 5.125-5.375%
Loan $170,000 to max -- 5.125-5.375% (up to 1% lower than last week)
15-year conventional: Loan $130,000-175,000 -- 5.25-5.625% (about 0.625% lower than last week)
Loan $175,000-230,000 -- 5.125-5.5%
Loan $230,000 to max -- 5.125-5.5%
40-year conventional: Loan $130,000-175,000 -- 5.625-6.00%
Loan $175,000-230,000 -- 5.625-6.00%
Loan $230,000 to max -- 5.50-5.875%
30-year conventional jumbo: $417,000-$650,000 -- 6.125-6.5% (up to 0.25% lower than last week)
15-year conventional jumbo: $417,000-650,000 -- 6.125-6.5% (almost 1% lower than last week)
5/1 Arm cap 5/2/5: $130,000-175,000 -- 4.625-5.00%
$175,000-230,000 -- 4.625-5.00% (about 0.625% lower than last week)
$230,000 to max -- 4.5-4.875%
3/1 Arm cap 2&6: 417,000-$650,000 -- 5.75-6.125% (about 0.375% lower than last week)
5/1 Jumbo Arm - cap 5/2/5: $417,000 -- 5.75-6.125%
801-649-5883
.jpg)
Marina Vialtsina
Showing posts with label mortgage rates. Show all posts
Showing posts with label mortgage rates. Show all posts
Saturday, December 6, 2008
Monday, November 24, 2008
Mortage rate for Thanksgiving week
30-year conventional: Loan $130,000-$175,000---6.00-6.375% (0.125% appr. lower than last week)
Loan $175,000-$230,000---5.875-6.25%
Loan $230,000 to max ($417,000) --- 5.75-6.125% (almost 0.25% lower than last week)
30-year FHA: Loan $90,000-130,000 --- 6.125-6.5% (up to 0.375% lower than last week)
Loan $130,000-170,000 -- 6.125-6.5%
Loan $170,000 to max -- 6.00-6.375% (up to 0.5% lower than last week)
15-year conventional: Loan $130,000-175,000 -- 6.875-6.25%
Loan $175,000-230,000 -- 5.75-6.125% (up to 0.25% lower than last week)
Loan $230,000 to max -- 6.625-6.00%
40-year conventional: Loan $130,000-175,000 -- 6.5-6.875%
Loan $175,000-230,000 -- 6.375-6.75%
Loan $230,000 to max -- 6.375-6.75%
30-year conventional jumbo: $417,000-$650,000 -- 6.375-6.75% (up to 1% lower than last week)
15-year conventional jumbo: $417,000-650,000 -- 7.125-7.5%
5/1 Arm cap 5/2/5: $130,000-175,000 -- 5.375-5.75%
$175,000-230,000 -- 5.25-5.625% (about 0.25% lower than last week)
$230,000 to max -- 5.25-5.625%
3/1 Arm cap 2&6: 417,000-$650,000 -- 6.5-6.875% (about 0.125% lower than last week)
5/1 Jumbo Arm - cap 5/2/5: $417,000 -- 6.5-6.875%
Loan $175,000-$230,000---5.875-6.25%
Loan $230,000 to max ($417,000) --- 5.75-6.125% (almost 0.25% lower than last week)
30-year FHA: Loan $90,000-130,000 --- 6.125-6.5% (up to 0.375% lower than last week)
Loan $130,000-170,000 -- 6.125-6.5%
Loan $170,000 to max -- 6.00-6.375% (up to 0.5% lower than last week)
15-year conventional: Loan $130,000-175,000 -- 6.875-6.25%
Loan $175,000-230,000 -- 5.75-6.125% (up to 0.25% lower than last week)
Loan $230,000 to max -- 6.625-6.00%
40-year conventional: Loan $130,000-175,000 -- 6.5-6.875%
Loan $175,000-230,000 -- 6.375-6.75%
Loan $230,000 to max -- 6.375-6.75%
30-year conventional jumbo: $417,000-$650,000 -- 6.375-6.75% (up to 1% lower than last week)
15-year conventional jumbo: $417,000-650,000 -- 7.125-7.5%
5/1 Arm cap 5/2/5: $130,000-175,000 -- 5.375-5.75%
$175,000-230,000 -- 5.25-5.625% (about 0.25% lower than last week)
$230,000 to max -- 5.25-5.625%
3/1 Arm cap 2&6: 417,000-$650,000 -- 6.5-6.875% (about 0.125% lower than last week)
5/1 Jumbo Arm - cap 5/2/5: $417,000 -- 6.5-6.875%
Sunday, October 5, 2008
Taking Charge
by Lawrence Yun, Chief Economist, NAR Research
You wake up one Monday morning to find Fannie Mae (FNMA) and Freddie Mac (FHLMC) no longer exist - that was a scenario that NAR staff - and no doubt a number of other economic, financial and housing market watchers - have been contemplating over the past month. Well, the government did, in effect, take over Fannie and Freddie. And guess what - on the Monday morning after the official announcement, the sun still came out. The question is: will this mean darker skies for housing and our economy?
Predictions
The federal government had no choice because the capital situation of two organizations was insufficient to face the upcoming realities of rising mortgage defaults. We will now have to wait and see what impact the government's action will have. I think we can make some predictions.
First of all, it is likely that mortgage rates will trend down over the short run. But how much of a decline will depend on how actively the government - more specifically the Treasury Department and the new Federal Housing Finance Agency (FHFA) - loosens the mortgage liquidity spigot. For over the next 12 months at least, the FHFA has the authority to purchase more than the normal amount of mortgages from lenders to put into its portfolio holdings. That means all conforming loans, including the newly conforming jumbo loans up to $625,000, will qualify for purchase by the FHFA. That will help drive down mortgage rates. In about two years' time, when the housing recovery is assumed to be well underway, the government will trim its mortgage portfolio. Then Fannie and Freddie will be completely restructured. It will be up to the next administration and Congress to determine that structure. And be assured that NAR will make its 1.3 million voices heard during those discussions.
The credit spread between the 10-year Treasury and the 30-year mortgage rates has greatly widened in recent months due to the uncertainties that surrounded the fate of Fannie and Freddie. The typical historic spread has been about 150 to 180 basis points. That means if the 10-year Treasury yield is 4%, then the 30-year mortgage would be about 5.5% to 5.8%. Recently though, we have seen the spread at 250 to 300 basis points. With the government's takeover of Fannie and Freddie, the spread will surely narrow and hence result in lower mortgage rates. That is good for the housing market.
You wake up one Monday morning to find Fannie Mae (FNMA) and Freddie Mac (FHLMC) no longer exist - that was a scenario that NAR staff - and no doubt a number of other economic, financial and housing market watchers - have been contemplating over the past month. Well, the government did, in effect, take over Fannie and Freddie. And guess what - on the Monday morning after the official announcement, the sun still came out. The question is: will this mean darker skies for housing and our economy?
Predictions
The federal government had no choice because the capital situation of two organizations was insufficient to face the upcoming realities of rising mortgage defaults. We will now have to wait and see what impact the government's action will have. I think we can make some predictions.
First of all, it is likely that mortgage rates will trend down over the short run. But how much of a decline will depend on how actively the government - more specifically the Treasury Department and the new Federal Housing Finance Agency (FHFA) - loosens the mortgage liquidity spigot. For over the next 12 months at least, the FHFA has the authority to purchase more than the normal amount of mortgages from lenders to put into its portfolio holdings. That means all conforming loans, including the newly conforming jumbo loans up to $625,000, will qualify for purchase by the FHFA. That will help drive down mortgage rates. In about two years' time, when the housing recovery is assumed to be well underway, the government will trim its mortgage portfolio. Then Fannie and Freddie will be completely restructured. It will be up to the next administration and Congress to determine that structure. And be assured that NAR will make its 1.3 million voices heard during those discussions.
The credit spread between the 10-year Treasury and the 30-year mortgage rates has greatly widened in recent months due to the uncertainties that surrounded the fate of Fannie and Freddie. The typical historic spread has been about 150 to 180 basis points. That means if the 10-year Treasury yield is 4%, then the 30-year mortgage would be about 5.5% to 5.8%. Recently though, we have seen the spread at 250 to 300 basis points. With the government's takeover of Fannie and Freddie, the spread will surely narrow and hence result in lower mortgage rates. That is good for the housing market.
Monday, August 4, 2008
Daily Market CommentaryMonday, August 4, 2008 8:59 AM
This week brings us the release of only three pieces of economic data that are likely to affect mortgage rates. However, the biggest event of the week will be the Federal Open Market Committee (FOMC) meeting Tuesday. We may see some pressure in bonds tomorrow as investors prepare for the meeting, but most traders will likely make their moves post-meeting Tuesday.
The first important release is June's Personal Income and Outlays data tomorrow morning. The Income & Spending report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for a decline of 0.1% in income and an increase of 0.5% in spending.
The first important release is June's Personal Income and Outlays data tomorrow morning. The Income & Spending report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for a decline of 0.1% in income and an increase of 0.5% in spending.
Friday, July 25, 2008
30-Year Mortgage Rates Fall to 6.42%
Daily Real Estate News | July 17, 2008
30-Year Mortgage Rates Fall to 6.42%
Mortgage rates continued the retreat in the latest week, with the average conforming 30-year fixed mortgage rate falling to 6.42 percent.
According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.45 discount and origination points.
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.
The average 15-year fixed rate mortgage popular for refinancing declined to 5.95 percent, while the average jumbo 30-year fixed rate held steady at 7.64 percent. Adjustable mortgage rates were mixed, with the average 1-year ARM rising to 6.21 percent and the average 5/1 ARM holding at 6.05 percent.
Mounting worries about the economy and the health of the financial system drew investors out of stocks and into the relative safety of bonds. Mortgage rates are closely related to yields on risk-free Treasury notes.
Amid the nervousness, mortgage rates touched lows not seen since the first week of June. But inflation remains an issue, as evidenced by the Consumer Price Index for June, and will continue to spar with weak economic growth as the factors influence the direction of mortgage rates. The up and down yo-yo of mortgage rates seems likely to continue, with rates fluctuating within a range.
Mortgage rates have been on a wild ride since the beginning of the year. The average 30-year fixed mortgage rate was as low as 5.57 percent in January, meaning that a $200,000 loan would have carried a monthly payment of $1,144.38. But at today's rate of 6.42 percent, a $200,000 loan would mean a monthly payment of $1,253.63.
Summary of survey results:
30-year fixed: 6.42%, down from 6.48% last week (avg. points: 0.45)
15-year fixed: 5.95%, down from 6.01% last week (avg. points: 0.41)
5/1 ARM: 6.05%, unchanged from last week (avg. points: 0.37)
Source: Bankrate.com
30-Year Mortgage Rates Fall to 6.42%
Mortgage rates continued the retreat in the latest week, with the average conforming 30-year fixed mortgage rate falling to 6.42 percent.
According to Bankrate.com's weekly national survey of large lenders, the average 30-year fixed mortgage has an average of 0.45 discount and origination points.
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.
The average 15-year fixed rate mortgage popular for refinancing declined to 5.95 percent, while the average jumbo 30-year fixed rate held steady at 7.64 percent. Adjustable mortgage rates were mixed, with the average 1-year ARM rising to 6.21 percent and the average 5/1 ARM holding at 6.05 percent.
Mounting worries about the economy and the health of the financial system drew investors out of stocks and into the relative safety of bonds. Mortgage rates are closely related to yields on risk-free Treasury notes.
Amid the nervousness, mortgage rates touched lows not seen since the first week of June. But inflation remains an issue, as evidenced by the Consumer Price Index for June, and will continue to spar with weak economic growth as the factors influence the direction of mortgage rates. The up and down yo-yo of mortgage rates seems likely to continue, with rates fluctuating within a range.
Mortgage rates have been on a wild ride since the beginning of the year. The average 30-year fixed mortgage rate was as low as 5.57 percent in January, meaning that a $200,000 loan would have carried a monthly payment of $1,144.38. But at today's rate of 6.42 percent, a $200,000 loan would mean a monthly payment of $1,253.63.
Summary of survey results:
30-year fixed: 6.42%, down from 6.48% last week (avg. points: 0.45)
15-year fixed: 5.95%, down from 6.01% last week (avg. points: 0.41)
5/1 ARM: 6.05%, unchanged from last week (avg. points: 0.37)
Source: Bankrate.com
Thursday, April 10, 2008
Choosing a mortgage
Mortgage rates have stayed relatively low, but they are still considerably above rock-bottom levels reached two years ago, and many worry that they will ultimately head higher. It is one of the reasons why Realtors think it is a great time to buy or move now.
Still, that's not the only consideration when choosing a mortgage. Here's how to make the decision.
1. 15-year versus 30-year debate
The first question you should ask is, "How much can I afford to pay on a monthly basis?"
Keep in mind, your mortgage payment is only part of what you'll pay to live in your home. You also should budget for furniture, your house's upkeep and the general expenses of life (like, say, food).
A 30-year mortgage will have a lower monthly payment and a higher interest rate than a 15-year mortgage.
So you'll have a smaller monthly obligation but you'll pay more for your house over time because you're paying it off with interest for a longer period.
Conversely, a 15-year mortgage will have a higher monthly payment and a lower interest rate so you'll pay less for your house because you're paying it off in a shorter period.
"For most home buyers, especially first-time buyers, taking a 15-year (or 20-year) mortgage is out of the question," said Keith Gumbinger, vice president for mortgage tracker HSH Associates. The higher monthly payments are often too much to handle for these types of buyers.
But for home buyers with sufficient income and a desire to be mortgage-free in a short time, a 15-year loan might be a good bet.
If you do not feel comfortable commiting to 15-year loan, do yourself a favor at least and every time you save some moeny put them toward priciple of the mortgage, it will reduce the amount of moeny your own, and therefore, it will reduce how long it will take to pay it off and some interest money.
2. Fixed versus adjustable-rate conundrum
The second question you should ask is, "How long will you be in the house?" You probably can't answer with absolute certainty, but you can play the odds.
Say, for example, you're single and buying a small condo but you can easily envision yourself married; or you've just started a family and plan to expand it at some point. Chances are good you'll want to trade up to a new home in five to seven years. On the other hand, maybe you've had your family and want to settle into a place with a good school system, which your kids will be using for the next 12 years.
My experience says that most people stay in the house/condo longer than they though they would originally. So keep that in mind.
Whatever the answer, it will help you decide whether it makes sense to get a fixed-rate or an adjustable-rate mortgage (ARM).
A fixed-rate mortgage locks in a rate for the length of your loan.
ARMs, meanwhile, are short-term fixed-rate loans: After the fixed rate term is up, the rate adjusts at regular intervals in accordance with current interest rate conditions at that time.
A 5/1 ARM, for example, has a fixed rate for five years and then adjusts every year for the next 25 years. (ARMs typically run on a 30-year schedule.)
The length of the fixed-rate term on an ARM typically can range anywhere from one month to 10 years. The longer the rate is fixed, the higher the interest rate you'll get.
But generally speaking -- and there have been exceptions in the past -- ARMs will cost you less in the short-term. With the ARM, both your monthly payments and interest rates should be lower than either a fixed rate 15-year or 30-year mortgage.
The risk with an ARM is that when interest rates rise, you could end up paying much more than you bargained for. "You're subject to the vagaries of the market," Gumbinger said. That's why in today's low-rate environment, he noted, "You want to maximize the fixed-rate picture to match your time frame."
If you know you'll be in a home for 12 years or more, a 30-year fixed rate mortgage might work better for you than, say, a 5/1 ARM, where you fix a rate for five years and then it adjusts every year after that. But if you think you won't be in the home longer than five or six years, a 5/1 ARM might make more sense.
3. A dollars-and-sense exercise
Say you need a $200,000 loan to buy a home and you can get the current average rates for a 30-year fixed, a 15-year fixed, or a 5/1 adjustable rate mortgage.
If the 30-year fixed rate mortgage is at 6.62 percent - a level it was at just a few months ago - your monthly payment would be $1,280. The interest you pay over the life of your loan would total $260,786.
With a 15-year fixed rate at 5.94 percent, your monthly payment would be $1,681. The interest you pay over the life of your loan would total $102,623, or about $158,163 less than the 30-year fixed.
With a 5/1 ARM at 4.20 percent, your monthly payment would be $978 for the first five years. The total interest you pay over the life of the loan if you stayed in your home past five years is anyone's guess because your rate would then adjust annually. But if you move after five years, that won't be an issue.
So, to say the least it is only few things to consider...And, always compare at least 2-3 mortgage companies, you will be surprise how different they charge you so called "closing costs"
Still, that's not the only consideration when choosing a mortgage. Here's how to make the decision.
1. 15-year versus 30-year debate
The first question you should ask is, "How much can I afford to pay on a monthly basis?"
Keep in mind, your mortgage payment is only part of what you'll pay to live in your home. You also should budget for furniture, your house's upkeep and the general expenses of life (like, say, food).
A 30-year mortgage will have a lower monthly payment and a higher interest rate than a 15-year mortgage.
So you'll have a smaller monthly obligation but you'll pay more for your house over time because you're paying it off with interest for a longer period.
Conversely, a 15-year mortgage will have a higher monthly payment and a lower interest rate so you'll pay less for your house because you're paying it off in a shorter period.
"For most home buyers, especially first-time buyers, taking a 15-year (or 20-year) mortgage is out of the question," said Keith Gumbinger, vice president for mortgage tracker HSH Associates. The higher monthly payments are often too much to handle for these types of buyers.
But for home buyers with sufficient income and a desire to be mortgage-free in a short time, a 15-year loan might be a good bet.
If you do not feel comfortable commiting to 15-year loan, do yourself a favor at least and every time you save some moeny put them toward priciple of the mortgage, it will reduce the amount of moeny your own, and therefore, it will reduce how long it will take to pay it off and some interest money.
2. Fixed versus adjustable-rate conundrum
The second question you should ask is, "How long will you be in the house?" You probably can't answer with absolute certainty, but you can play the odds.
Say, for example, you're single and buying a small condo but you can easily envision yourself married; or you've just started a family and plan to expand it at some point. Chances are good you'll want to trade up to a new home in five to seven years. On the other hand, maybe you've had your family and want to settle into a place with a good school system, which your kids will be using for the next 12 years.
My experience says that most people stay in the house/condo longer than they though they would originally. So keep that in mind.
Whatever the answer, it will help you decide whether it makes sense to get a fixed-rate or an adjustable-rate mortgage (ARM).
A fixed-rate mortgage locks in a rate for the length of your loan.
ARMs, meanwhile, are short-term fixed-rate loans: After the fixed rate term is up, the rate adjusts at regular intervals in accordance with current interest rate conditions at that time.
A 5/1 ARM, for example, has a fixed rate for five years and then adjusts every year for the next 25 years. (ARMs typically run on a 30-year schedule.)
The length of the fixed-rate term on an ARM typically can range anywhere from one month to 10 years. The longer the rate is fixed, the higher the interest rate you'll get.
But generally speaking -- and there have been exceptions in the past -- ARMs will cost you less in the short-term. With the ARM, both your monthly payments and interest rates should be lower than either a fixed rate 15-year or 30-year mortgage.
The risk with an ARM is that when interest rates rise, you could end up paying much more than you bargained for. "You're subject to the vagaries of the market," Gumbinger said. That's why in today's low-rate environment, he noted, "You want to maximize the fixed-rate picture to match your time frame."
If you know you'll be in a home for 12 years or more, a 30-year fixed rate mortgage might work better for you than, say, a 5/1 ARM, where you fix a rate for five years and then it adjusts every year after that. But if you think you won't be in the home longer than five or six years, a 5/1 ARM might make more sense.
3. A dollars-and-sense exercise
Say you need a $200,000 loan to buy a home and you can get the current average rates for a 30-year fixed, a 15-year fixed, or a 5/1 adjustable rate mortgage.
If the 30-year fixed rate mortgage is at 6.62 percent - a level it was at just a few months ago - your monthly payment would be $1,280. The interest you pay over the life of your loan would total $260,786.
With a 15-year fixed rate at 5.94 percent, your monthly payment would be $1,681. The interest you pay over the life of your loan would total $102,623, or about $158,163 less than the 30-year fixed.
With a 5/1 ARM at 4.20 percent, your monthly payment would be $978 for the first five years. The total interest you pay over the life of the loan if you stayed in your home past five years is anyone's guess because your rate would then adjust annually. But if you move after five years, that won't be an issue.
So, to say the least it is only few things to consider...And, always compare at least 2-3 mortgage companies, you will be surprise how different they charge you so called "closing costs"
Monday, April 7, 2008
Morgage Update: Stocks and Bonds
The recent euphoria in the Stock market continues, and the word in the trading pits is that perhaps the credit crunch is over. Today, we are hearing about more financial institutions raising capital, and this time it is Washington Mutual saying that it has investors injecting $5 Billion in cash. Traders are reading the recent investments and capital raising in the financial sector as a sign that the worst days of the credit crisis may be in the rear view mirror. As a result, Stocks overall are trading higher, and as money flows out of Bonds and into Stocks, this is hurting Bond prices a bit this morning.
Today kicks off the beginning of earnings season for Stocks, which may have the potential to add to the euphoria or change the mood to a negative one depending on the results. With the scent of recession in the air, the quality of corporate earnings and especially future guidance will largely influence the direction of both Stocks and Bonds in the coming days. If corporate earnings are reported weaker than expected, Stocks may come off the happy gas and head lower, which would provide a boost to Bonds.
Mortgage Bonds, while trading lower, are improved from the worst levels seen earlier in the day. Additionally, prices remain well above support at the 50-day Moving Average. For now, we will continue to Float and give Bonds a chance to further improve - but be ready to Lock your mortgage rate if things turn sour.
Today kicks off the beginning of earnings season for Stocks, which may have the potential to add to the euphoria or change the mood to a negative one depending on the results. With the scent of recession in the air, the quality of corporate earnings and especially future guidance will largely influence the direction of both Stocks and Bonds in the coming days. If corporate earnings are reported weaker than expected, Stocks may come off the happy gas and head lower, which would provide a boost to Bonds.
Mortgage Bonds, while trading lower, are improved from the worst levels seen earlier in the day. Additionally, prices remain well above support at the 50-day Moving Average. For now, we will continue to Float and give Bonds a chance to further improve - but be ready to Lock your mortgage rate if things turn sour.
Friday, March 21, 2008
Mortgage Rates Drop Below 6%
According to Freddie Mac's data, mortgage rates have dropped back below 6 percent after spending more than a month above that threshold. Thanks to the Federal Reserve's aggressive moves to insulate the U.S. economy by slashing borrowing costs, 30-year fixed home loans averaged 5.87 in the latest numbers. That compares to 6.13 percent this time last week and represents the first time since mid-February that the benchmark interest rate has been less than 6 percent. "Slowing consumer spending and weak employment conditions are among the concerns behind the Fed's decision to lower the target federal funds rate," says Freddie Mac chief economist Frank Nothaft. Source: Tulsa World (Okla.) (03/21/08)
The rates are also different for different regions. I am reseraching how it affected Utah Rates so far. For now, I can say one of the lowest rates (Utah Housing program) indicated rate to be 6.09%. Utah Housing is always one of the lowest rate out there, and not everyone qualify to apply for these loans. Have questions, if you do?
Please call me directly, Marina at 801-649-5883
The rates are also different for different regions. I am reseraching how it affected Utah Rates so far. For now, I can say one of the lowest rates (Utah Housing program) indicated rate to be 6.09%. Utah Housing is always one of the lowest rate out there, and not everyone qualify to apply for these loans. Have questions, if you do?
Please call me directly, Marina at 801-649-5883
Thursday, January 3, 2008
New Market News
This week will be very important for mortgage rates despite the fact that it is a holiday shortened week. There are four relevant factual economic reports scheduled for release along with the minutes from the last FOMC meeting. This means that we may see fairly significant changes to rates more than one day this week.
Today brings us the release of November's Existing Home Sales report, which comes from the National Association of Realtors. It gives us a measurement of housing sector strength and mortgage credit demand, but is not considered to be of high importance to bonds or mortgage rates. However, after the surprisingly large drop in November's New Home Sales report, we could see this data also influence mortgage rates if it shows similar results. The financial markets will close early today and remain closed Tuesday in observance of the New Year's Day holiday. They will reopen Wednesday morning with the release of the Institute for Supply Management (ISM) manufacturing index. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. Analysts are currently expecting to see a 50.5 reading in this month's release, meaning that sentiment fell slightly from November's 50.8. A smaller reading will be good news for the bond market and mortgage shoppers while a higher than expected reading could lead to higher mortgage rates Wednesday morning.Also Wednesday will be the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed's thinking and concerns regarding inflation and monetary policy. It may also help form opinions of the Fed's future moves toward interest rates. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they shouldn't affect the markets or mortgage rates until afternoon hours. The Commerce Department will post November's Factory Orders data late Thursday morning, giving us an important measurement of manufacturing sector strength. This report is similar to the Durable Goods Orders release that was posted late last month, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see an increase of 1.0% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a small change in rates.The final report of the week comes Friday morning when the Labor Department will post December's employment figures. The Employment report is considered to be one of the most important monthly releases we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a smaller than expected increase in new payrolls and a small increase or even a decrease in earnings would be good news for the bond market. Current forecasts call for a 0.1% increase in the unemployment rate, pushing it to 4.8%. Analysts are expecting to see an increase in new payrolls in the neighborhood of 70,000 with earnings rising 0.3%. If we see much fewer than 70,000 new jobs, we should see mortgage rates drop considerably Friday. However, stronger than expected readings will likely push mortgage rates higher.Overall, the key data of the week will be Wednesday's ISM index and Friday's Employment report, which could set the tone for the bond market and mortgage pricing for the next few weeks. If they show weaker than expected results, mortgage rates should move lower for the week.
Today brings us the release of November's Existing Home Sales report, which comes from the National Association of Realtors. It gives us a measurement of housing sector strength and mortgage credit demand, but is not considered to be of high importance to bonds or mortgage rates. However, after the surprisingly large drop in November's New Home Sales report, we could see this data also influence mortgage rates if it shows similar results. The financial markets will close early today and remain closed Tuesday in observance of the New Year's Day holiday. They will reopen Wednesday morning with the release of the Institute for Supply Management (ISM) manufacturing index. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. Analysts are currently expecting to see a 50.5 reading in this month's release, meaning that sentiment fell slightly from November's 50.8. A smaller reading will be good news for the bond market and mortgage shoppers while a higher than expected reading could lead to higher mortgage rates Wednesday morning.Also Wednesday will be the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed's thinking and concerns regarding inflation and monetary policy. It may also help form opinions of the Fed's future moves toward interest rates. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they shouldn't affect the markets or mortgage rates until afternoon hours. The Commerce Department will post November's Factory Orders data late Thursday morning, giving us an important measurement of manufacturing sector strength. This report is similar to the Durable Goods Orders release that was posted late last month, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see an increase of 1.0% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a small change in rates.The final report of the week comes Friday morning when the Labor Department will post December's employment figures. The Employment report is considered to be one of the most important monthly releases we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a smaller than expected increase in new payrolls and a small increase or even a decrease in earnings would be good news for the bond market. Current forecasts call for a 0.1% increase in the unemployment rate, pushing it to 4.8%. Analysts are expecting to see an increase in new payrolls in the neighborhood of 70,000 with earnings rising 0.3%. If we see much fewer than 70,000 new jobs, we should see mortgage rates drop considerably Friday. However, stronger than expected readings will likely push mortgage rates higher.Overall, the key data of the week will be Wednesday's ISM index and Friday's Employment report, which could set the tone for the bond market and mortgage pricing for the next few weeks. If they show weaker than expected results, mortgage rates should move lower for the week.
Monday, October 8, 2007
Four Factual Economic Reports
This week brings us four factual economic reports for the markets to digest. They are all scheduled for release Thursday and Friday, so the first part of the week will be left mostly up to the stock markets. In addition to the factual reports, we will also get the minutes from the last FOMC meeting that can also cause movement in rates. Three of the four reports and the minutes are considered to be moderately or highly important to the bond market and mortgage rates. Therefore, we should expect to see another week of movement in rates.
The bond market will be closed today in observance of the Columbus Day holiday. The first report of the week comes Tuesday afternoon when the Fed will release the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed's next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher Tuesday afternoon. However, if they indicate a likelihood of another rates cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.
The bond market will be closed today in observance of the Columbus Day holiday. The first report of the week comes Tuesday afternoon when the Fed will release the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed's next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher Tuesday afternoon. However, if they indicate a likelihood of another rates cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.
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.
Subscribe to:
Posts (Atom)