Filed under: Daily Mortgage News, Interest Rates, Weekly News | Tags: cu mortgage, CU Mortgage Division Olympia Washington Mortgage Lender, Fed Funds Rate, Fed Meeting, FOMC, Interest Rates, Mortgage Rates, Olympia Home Loan Lender, Olympia Washington Mortgage Lender, Olympia Washington Real Estate Lender, Thurston County Mortgage Rate Information, William Tuning - Olympia, Washington
Today, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged, in its target range of 0.000-0.250 percent.
In its press release, the FOMC noted that the U.S. economy “has continued to strengthen” and that the jobs markets “is stabilizing”. It also said that business spending has “has risen significantly”.
This is a slight departure from the Fed’s January statement in which housing was not mentioned and business spending was said to be “picking up”.
It’s also the sixth straight statement from the FOMC in which the Fed described the economy with optimism. This is a signal to markets that 2008-2009 recession is over and that economic growth is returning.
The economy is not without threats, however, and the Fed identified several:
- High unemployment threatens consumer spending
- Housing starts are at a “depressed level”
- Consumer credit remains tight
The message’s overall tone, however, remained positive and inflation is within tolerance limits
Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to end its $1.25 trillion commitment to the mortgage market by March 31, 2010. Fed insiders estimate that the bond-buying program lowered mortgage rates by 1 percent since its start.
Mortgage market reaction to the Fed press release is, in general, ambivalent. Mortgage rates in Tumwater are unchanged this afternoon.
The FOMC’s next scheduled meeting is a 2-day affair, April 27-28, 2010.
Filed under: Interest Rates, Weekly News | Tags: cu mortgage, CU Mortgage Division Olympia Washington Mortgage Lender, Discount Rate, Interest Rates, Lacey Mortgage Lender, Mortgage Interest Rates, Mortgage Rates, Olympia Home Loan Lender, Olympia Washington Mortgage Lender, Tumwater Mortgage Lender, William Tuning - Olympia, Washington
Mortgage markets had a terrible, holiday-shortened week last week as Wall Street responded to worse-than-expected inflation data and action from the Federal Reserve. Mortgage bonds sold off with force, causing mortgage rates to rise for the second week in a row.
Last week was a bad week to float a mortgage, to say the least. Rates in Olympia rose by the largest margin in any week since late-2009.
The two biggest stories from last week both came from the Federal Reserve. The first was the release of the FOMC January meeting minutes which showed more confidence in the U.S. economy than Wall Street expected, and the second was the Fed’s surprise announcement to raise the nation’s Discount Rate to 0.75%. Both sparked risk-taking on Wall Street and bonds sold-off as a result.
Now, the Fed Funds Rate won’t climb anytime soon and neither will Prime Rate, but the Fed has sent a clear message to the markets — The Era of Loose Monetary Policy is over.
This week, there’s a lot of economic data set for release.
- Tuesday : Case-Shiller Home Price Index, Consumer Confidence
- Wednesday : New Home Sales
- Thursday : FHFA Home Price Index, Initial Jobless Claims
- Friday : Existing Home Sales, Personal Consumption Expenditures
With markets already on edge, any better-than-expected results should be bad for mortgage rates.
After last week’s performance, conforming mortgage rates for residents of Washington State have now unwound most their January gains. If you’re waiting for the right time to lock, it may have been 2 weeks ago. Consider locking in this week to protect against any further deterioration in price.
Filed under: Interest Rates, Weekly News | Tags: Building Permits, cu mortgage, CU Mortgage Division Olympia Washington Mortgage Lender, FOMC Minutes, Interest Rates, Mortgage Rates, Olympia Home Loan Lender, Tumwater Washington Mortgage Lender, William Tuning - Olympia, Washington
Mortgage markets worsened last week on general profit-taking in the U.S. bond market, combined with talk of a coordinated rescue effort for Greece and its debt burden. Mortgage-backed bonds sold off, causing conventional and FHA mortgage rates to rise.
There wasn’t much hard data on which to trade last week, either, so momentum took markets farther than they otherwise might have moved on their own. It marked the first time in 5 weeks that rates rose for Washington State rate shoppers.
This week, data returns. Expect mortgage market movement.
Some of the week’s more important releases include:
- Housing Starts and Building Permits (Wednesday)
- The release of the last month’s FOMC Minutes (Wednesday)
- Business and consumer inflation figures (Thursday and Friday)
Inclement weather may have impacted last month’s Housing Starts reading so pay closer attention to Building Permits. Permits precede actual construction and can be more indicative of economic optimism. If permit readings are strong, it should be a negative for mortgage rates.
The same is true for the FOMC Minutes.
Last month’s FOMC post-meeting press-release was decidedly middle-of-the-road, but the statement is just a summary of the Fed’s 2-day meeting, boiled down to a few paragraphs. Wednesday’s release of the FOMC Minutes will reveal the deeper discussions among members of the Fed. Wall Street will mine it for clues about the future of the economy.
If Wall Street senses optimism coming from the Fed — again — mortgage rates should rise.
And, lastly, keep an eye on Thursday and Friday’s inflation data. Inflation is bad for mortgage rates so a higher-than-expected reading should spark a bond market sell-off.
Since mid-December, mortgage rates have moved within a tight range and there’s little reason for rates will break this range this week. However, we are near the top of the channel. If you know you’re going to need a rate locked soon, it’s probably best to do early in the week.
Filed under: Daily Mortgage News, Interest Rates, Weekly News | Tags: cu mortgage, CU Mortgage Division, CU Mortgage Division Olympia Washington Mortgage Lender, Olympia Washington Mortgage Lender, William Tuning - Olympia, Washington
Wondering About Mortgage Interest Rates
Filed under: Interest Rates, Weekly News | Tags: Buying a Home, credit union mortgage loans, cu mortgage, Flight-To-Quality, Interest Rates, Lacey Mortgage Lender, Mortgage Interest Rates, Mortgage Rates, Olympia Home Loan Lender, Olympia Washington Mortgage Lender, Tumwater Washington Mortgage Lender, William Tuning - Olympia, Washington
Mortgage markets improved last week on domestic jobs data and international banking concerns. The news triggered buying in the bond market and, as a result, conventional, FHA and VA mortgage rates in Washington State improved for the 4th consecutive week.
Mortgage rates are now at a 6-week low but probably shouldn’t be. It underscores just how important global events can be to U.S. mortgage markets.
For example, corporate earnings continue to improve and key elements of the economy are strengthening. Even the Federal Reserve acknowledges this. In most circumstances, that would be a boon for the stock markets and bond markets would suffer, including mortgage bonds.
Last week, that wasn’t the case.
Early in the week, as (1) China tightened its monetary policy, (2) Greece did little to quell lingering default fears, and (3) Spain raised its deficit forecasts, global investors sought to reduce their collective risk exposure. For safety of principal, many sold some of their more aggressive positions and moved the cash proceeds into the U.S. bond market — which includes mortgage bonds.
On Wall Street, this type of trading pattern is called a “flight-to-quality”. Because mortgage bonds are backed by U.S. government entities, the debt is considered to be ultra-safe. Last week’s extra demand for bonds helped to push prices up and mortgage rates down.
And that was before Friday’s weak jobs report. Although the Unemployment Rate fell to 9.7%, the government reported a net loss of 98,000 jobs last month and this, too, helped mortgage rates tick lower.
This week, we’ll hope for momentum to continue.
There’s very little domestic news to move rates this week so keep an eye on the global market for similar stories like what we saw last week. Or, if you’re not sure what to look for, just give me a call or send me an email and I’ll be happy to watch the markets and mortgage rates for you.
Filed under: Interest Rates, Weekly News | Tags: cu mortgage, CU Mortgage Division, Interest Rates, Lacey Mortgage Lender, Mortgage Interest Rates, Mortgage Rates, William Tuning - Olympia, Washington
| Mortgage Rates Improve, Stocks FallWhile the economic data released this week had little impact, mortgage rates were heavily influenced by two big stories. One was an announcement that China will take steps to slow its economic growth and the other was President Obama’s proposed new restrictions on the activities of financial institutions. Both measures are expected to lead to slower economic growth in the US, which hurt the stock market but helped fixed income markets. As a result, mortgage rates ended a little lower. During the week, China released a report showing that its Gross Domestic Product (GDP) grew at an 8.7% pace in 2009. Rapid growth generally leads to higher inflation. In an effort to slow its economy and prevent inflation, China announced that it is going to curb bank lending. China currently has the third largest economy and is responsible for a significant percentage of global economic growth, so the effects of a slowdown in China will be felt around the world. In the US, President Obama proposed to limit the size and activities of large banks to reduce the risks to the financial system as a whole. If passed by Congress, this too would lead to slower growth for many large US financial services firms. The potential for slower economic growth and the resulting reduction in inflationary pressures was favorable for mortgage rates. To build capital and reduce risk, the FHA announced that it will raise insurance rates and tighten credit score requirements. The major changes include increasing upfront premiums from 1.75% to 2.25%, reducing the maximum seller contribution from 6% to 3%, and increasing the level of FICO scores from 500 to 580 below which a down payment of 10% is required. At this point, the expected timing of the upfront premium increase will be in the spring, and the other changes will take place over the summer. |
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| Week AheadThe biggest story next week will be Wednesday’s Fed meeting. No change in rates is expected, but any surprises in the Fed statement could move markets. The Economic Calendar will also be packed next week. Existing Home Sales will come out on Monday, and New Home Sales will be released on Wednesday. Durable Orders, an important indicator of economic growth, will be released on Thursday. Fourth quarter Gross Domestic Product (GDP), the broadest measure of economic activity, will come out on Friday, along with the Chicago PMI manufacturing index. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. |
Filed under: Daily Mortgage News, Interest Rates, Weekly News | Tags: CU Mortgage Division, Interest Rates, Lacey Mortgage Lender, Mortgage Interest Rates, Mortgage Rates, Olympia Home Loan Lender, PPI, Tumwater Mortgage Lender, William Tuning - Olympia, Washington
Mortgage markets showed little conviction last week, carving out just a narrow trading channel. There was very little data on which for markets to move, leaving mortgage rates momentum-bound.
Luckily for rate shoppers, mortgage rate momentum was favorable. Rates were slightly lower Monday through Thursday before breaking downward Friday afternoon. Home shoppers in Thurston County this past weekend caught a nice break.
Last week marked the second straight week in which mortgage rates fell.
This week, in holiday-shortened trading and with little economic data set for release, expect mortgage rates to again move on momentum. The biggest report of the week is Wednesday’s Producer Price Index.
Producer Price Index is important to mortgage rates because of its role in inflation. PPI is akin to a Cost of Living-type measurement, but for business. As business costs rise, the thought goes, it’s not long before consumer costs rise, too. Businesses eventually pass on costs, after all.
In this manner, a rising Producer Price Index can foreshadow rising consumer prices, and, therefore, inflation.
Inflation is awful for mortgage rates.
PPI expectations have revised downward this month, especially because last week’s data showed a deceleration in consumer prices nationwide. If PPI isn’t as weak as expected, mortgage rates will rise.
Other influential data this week includes Housing Starts, Consumer Confidence and Initial Jobless Claims.
So far, 2010 has been for mortgage rates in Washington and around the country. If you’re in need of a rate lock, this week may be a good time to take one. Call CU Mortgage Division for a custom tailored rate quote for your needs and to inquire on how to lock in your interest rate or obtain a Free Pre-Approval. Visit www.cumortgagedivision.com for more details.
Filed under: Weekly News | Tags: Consumer Confidence, CU Mortgage Division, Interest Rates, Lacey Mortgage Lender, Mortgage Rates, Olympia Home Loan Lender, Retail Sales, Tumwater Mortgage Lender, William Tuning - Olympia, Washington
Data was sparse through 2010′s first trading week last week, setting the stage for a week of momentum trading.
In up-and-down trading, mortgage pricing improved overall but the best rates of the week didn’t last long.
Rates improved Monday and Tuesday as an oversold market corrected itself to better price points. Then, in anticipation of the December jobs report, rates worsened Wednesday and Thursday. Friday, after the jobs report was released, pricing proceeded to carve out a huge range before settling unchanged.
On average, lenders issued new rate sheets every few hours last week. It was a difficult week to shop for mortgages in Washington and elsewhere.
Unfortunately, this week doesn’t figure to be much better.
For the second straight week, the economic calendar is bare. Traders — like last week — will be forced to rely on “gut feel” to make their trades. That rarely bodes well for shoppers. Especially because traders are facing a mortgage market in the midst of a terrible losing streak.
Since reaching an all-time low December 1, 2009, 30-year fixed rate mortgages have worsened by 300 basis points, or 3 percent.
To a homeowner or rate shopper in Tumwater WA , the math of 300 basis points looks like this:
- 5 weeks ago, a 4.625 percent mortgage rate required 0 points
- Today, the same 4.625 percent mortgage rate requires 3 points
1 point is equal to 1 percent of your loan size.
Last month’s worsening is the worst 1-month deterioration in consumer mortgage rates from all of 2009.
If you’re hoping for rates to fall back to early-December levels, know that it is possible. For this week, here’s some things that could push rates in the right direction:
- 3 Fed members are speaking. Each mention of economic under-performance in 2010 will be good for rates.
- Retail Sales data is released Thursday. If the numbers are weak, mortgage rates should improve.
- Consumer confidence surveys are released Friday. Lower confidence levels should help rates fall.
Be ready to lock at a moment’s notice this week. Rates may rise or fall, but markets are positioned toward the former.That’s where momentum is pointing as of the Market Open today.
Keep an eye on rates and your loan officer on speed dial. Once the mortgage market starts breaking, it’s expected to break quickly.
Remember you can always call CU Mortgage Division at (360) 539-4687 for the latest in mortgage rates or to apply for a mortgage loan.
Filed under: Weekly News | Tags: CU Mortgage Division, Interest Rates, Mortgage Interest Rates, Mortgage Rates, Non-Farm Payrolls, Olympia Home Loan Lender, Points, Tumwater Mortgage Lender
Mortgage markets were relatively flat last week during holiday-shortened trading. After starting the week with a Monday surge higher, mortgage rates settled down through Tuesday and remained somewhat flat into the early-close for New Year’s Eve.
However, as compared to the 4-month low posted post-Thanksgiving, conforming mortgage pricing has now worsened by more than 300 basis points. In English, that means that a December 1 Washington mortgage rate quoted with zero points is available today at a cost of 3 points.
1 “point” is equal to 1 percent of how much you borrow.
If you were shopping for homes or rates last month, you no doubt noticed that pricing zoomed higher to close out 2009. How 2010 starts is anyone’s guess. This week will hold the answer.
It’s a week light with data, but heavy on importance. The biggest news comes Friday in the form of the December employment report.
Last month, the Unemployment Rate fell for just the second time in 2 years and net job gains nearly turned positive. Both points were bad for mortgage rates because a weak economy has helped keep rates down. Evidence of improvement, therefore — at least according to Wall Street — is reason for reversal.
This month, analysts expect a net job gain of zero. If they get it, the psychological effect of the data should cause stock markets to rise and mortgage markets to sink.
A worsening market is bad for rates.
Other data to watch this week is Tuesday’s Pending Home Sales report and Wednesday’s FOMC November Minutes release. Both can forcefully impact markets and rates.
Today is January 4 — there’s a lot of 2010 to go. However, that won’t stop Wall Street from trying to figure it out. As the stock market rises and falls this week, the bond market will likely be in tow. Abrupt movements mean changing mortgage rates and we’ll see more of our fair share of it over the next few weeks.
If you’re quoted a mortgage rate this week that fits your budget, consider locking it in. Rates may fall in 2010, or they may not. It’s a gamble on which you don’t want on the wrong side because when rates do rise, they’re likely to rise quickly.
Markets can’t sustain rates like this in an expanding economy.
