What’s Ahead For Mortgage Rates This Week : October 18, 2010
Mortgage markets worsened last week in back-and-forth trading, pushing conforming mortgage rates higher on the week.
Despite the uptick, however, Freddie Mac reports that rates still managed to make new, all-time lows for the third week in a row. The benchmark 30-year fixed rate mortgage is now down 1.02% since April 2010.
The United States is experiencing a Refi Boom.
As compared to 6 months ago, a new, $200,000 home loan costs $124 less per month in principal + interest.
This week, monthly payments may fall some more. It all depends on data.
Early in the week, housing data takes center stage. The National Association of Home Builders releases its Housing Market Index this morning, and, Tuesday, the government prints September’s Housing Starts figures. Both reports figure to influence the bond market.
Strong readings should lead mortgage rates higher; weak ones should lead them lower. Economists expect weakness.
That said, the biggest story of the week — and the one with the best chance of changing rates — could stem from the Federal Reserve.
Federal Reserve officials, including Chairman Ben Bernanke, have observed the recent U.S. economy and have openly discussed the use of “non-conventional means” to spur it forward. As the rhetoric increases, it’s widely believed that the Fed will act soon, and that the central bank’s plan will include new commitments to U.S. Treasury debt, and, possibly, to mortgage-backed bonds.
Speculation of the Fed’s next move has sparked mortgage bond demand which, in turn, has helped drive down mortgage rates. An official Fed announcement could push rates lower still.
For now, though, mortgage rates are as low as they’ve been in history. Rate shoppers have two choices. (1) Lock in a today’s low rates, or (2) Wait and hope that rates fall further. Ultimately, rates may fall, but once they start rising, they’ll likely rise quickly.
It’s a gamble you may not wish to take.
What’s Ahead For Mortgage Rates This Week : October 12, 2010
Mortgage markets improved last week on mixed messages about the economy, and a growing belief that the government will move to stimulate the economy.
Conforming mortgage rates eased lower.
According to Freddie Mac’s weekly mortgage market survey, average mortgage rates nationwide fell to new all-time lows last week. On the other side of that point, however, is that the accompanying “points” for today’s low rates have climbed to their highest levels of 2010.
In other words, mortgage rates are down, but closing costs are up.
There were two main stories driving mortgage rates last week. The first was the Federal Reserve.
Although nothing has been said specifically, markets are speculating that the government will add new layers of market support to spark the economy.
The prevailing thought is that — if there’s intervention — the Fed will buy treasuries and mortgage bonds, driving up prices and pushing down yields. Rates dropped last week in anticipation of such a move.
The second factor in falling mortgage rates was Friday’s jobs report.
Economists expected the economy to shed 5,000 jobs in September. Instead, it lost 95,000, anchored by the elimination of temporary census workers and job losses in local governments. The private sector didn’t fare so poorly, adding sixty-four thousand jobs. However, that, too, fell short of expectations.
The results contributed to a mortgage market rally already in-process.
This week, there’s a number of releases that should keep mortgage rates on the move — up and down — including Fed Minutes (Tuesday), Producer Price Index (Thursday), and Consumer Price Index, Retail Sales and a confidence survey (Friday).
Mortgage rates are low and may not stay that way. If you’re floating a mortgage rate, or wondering whether now is the time to lock, talk to you loan officer. Rates are expected be volatile this week.
What’s Ahead For Mortgage Rates This Week : October 4, 2010
For the third straight week, mortgage markets showed little conviction in the face of contrasting data. Mortgage bonds ended the week slightly better, but mortgage rates did not.
Conforming mortgage rates were up-and-down all week before ending the week with a slight worsening. The inter-day volatility has come to characterize the current mortgage market.
In part, rates are jumpy because of data; it’s unclear when the economy is expanding or contraction — despite the “official call” of the recession’s end in June 2009.
Consider the conflicting reports from last week. Separate Consumer Confidence reports showed sentiment falling in September, but on the other hand:
- Initial jobless claims dropped 3%
- Household income is shown to be rising
- GDP is improving year-over-year
In other words, the economy is in recovery, but the average citizen isn’t believing it. That causes purse-strings to stay tight, thereby retarding economic growth.
Wall Street is struggling with the contrast, and constantly changing its outlook. It’s making mortgage rates tough to pin down and this week should reflect that. In addition to a home sales report and new consumer confidence data, the government prints its market-moving Non-Farm Payrolls report.
More commonly called “the jobs report”, Non-Farm Payrolls details the workforce, its size, and its Unemployment Rate. There’s expected to be little change from August, a month considered “fair” by recent employment standards. If the jobs report shows improvement and/or strength, look for mortgage rates to rise. If the report does deterioration and/or weakness, look for mortgage rates to fall.
The Non-Farm Payrolls will be released Friday at 8:30 AM ET.
What’s Ahead For Mortgage Rates This Week : September 27, 2010
Mortgage markets improved last week as markets digested a bevy of data from the housing sector, plus the scheduled Federal Open Market Committee meeting.
In back-and-forth trading, conforming mortgage rates bottomed out Wednesday before rising through Friday’s afternoon close. Rates still managed to eke out improvement on the week overall.
According to Freddie Mac, mortgage rates remain near their lowest levels of all time.
Despite low rates, however, rate shoppers are finding it a challenge to lock the “best price”. This is because Wall Street is conflicted about the future of the U.S. economy and, as a result, mortgage pricing has been extra volatile.
For as much data that points to economic growth, there are numbers that suggest a pullback, too. Traders are undecided in either direction and mortgage pricing reflects it. It’s not uncommon for mortgage rates to vary by as much as 3/8 percent in a given week.
This week, without much new data due for release, prepare for even swifter swings in rates. In the absence of “numbers”, momentum- and trend-trading should amplify the market’s normal drops and spikes.
A sampling of the week’s economic data includes Tuesday’s Consumer Confidence report and Case-Shiller Index, Thursday’s Jobless Claims and Gross Domestic Product data, plus Friday’s consumer income and spending figures.
Notably missing from the week’s economic calendar is the jobs report which is typically issued on the first Friday each month. The release is delayed a week to October 8.
If you’re still floating a mortgage rate or have yet to commit to a refinance, consider that mortgage rates are primed to rise. They’ve been falling for 22 weeks and when the market turns, it’s expected to turn quickly.
Talk to your loan officer about your refinance options while mortgage rates are still low.
What’s Ahead For Mortgage Rates This Week : September 20, 2010
Mortgage markets were highly volatile, yet relatively unchanged last week in back-and-forth trading on Wall Street. Global investors are grappling with the state of U.S. economy and unable to discern whether it’s growing, or slowing.
As an real-world illustration, the government’s August Retail Sales report showed strong growth nationwide. However, in looking at a subset of that same data that accounted for rising gas prices, and excluded automotive-related sales, the results were far more tame.
In other words, despite the winning headlines, there was no clear conclusion in August’s Retail Sales.
As another example, consumer confidence dropped to its lowest level since August 2009, it was reported last week. Now, on most days, this statistic would lead mortgage rates lower, but the figures happened to be offset by improving employment report that suggests a looming jobs recovery.
Again, markets got confused and without clear direction, mortgage rates have been dancing.
Last week, conforming rates carved out a range close to 0.375 percent, making it difficult for rate shoppers to zero-in on pricing. 30-year fixed rates worsened, 15-year fixed held steady, and ARMs improved overall.
This week, expect rates to be equally jumpy. There’s a lot of housing data due for release and the Federal Open Market Committee is meeting.
- Monday : Homebuilder Confidence Survey
- Tuesday : Housing Starts, Building Permits, FOMC Meeting
- Wednesday : FHFA Home Price Index
- Thursday : Existing Home Sales
- Friday : New Home Sales
That’s one housing-related release per day, and a Federal Reserve meeting to boot. Today’s low rates could be vanished by Friday.
Therefore, if you haven’t already, it may be time to call your loan officer for a refinance. Rates could certainly fall further, but they’re looking more likely to rise.
What’s Ahead For Mortgage Rates This Week : September 13, 2010
A shift in Wall Street sentiment caused mortgage markets to worsen last week. There wasn’t much in the way of new data, but the numbers that did hit the street helped quell fears of a double-dip recession.
Conforming mortgage rates rose between Monday-Friday for the first time since June, and mortgage-backed securities have now lost ground on six of the last 7 trading days.
During this period, conforming mortgage rates have risen by as much as 0.375 percent.
Mortgage rates for FHA-insured home loans are higher, too.
Remember, concern for the future of the U.S. economy was a major catalyst for low rates this summer. The drop in rates, which began in April on weaker-than-expected data, accelerated through July and August on record-low home sales and a stalled jobs market.
Lately, though, these concerns are turning to hope.
- The July Pending Home Sales Index showed that housing has life
- Initial jobless claims came in much lower than expected
- Retail Sales is expected to post a gain for August
The growing optimism is putting the Refi Boom at risk. To be sure, it’s been a rough two weeks to shop for a mortgage.
This week may figure no better. In addition to the Retail Sales data, there’s key inflation data due both Thursday and Friday, plus, two consumer confidence reports are set for release. If the overall numbers point to an “improving economy”, mortgage rates will likely rise again this week.
Momentum is moving in that direction, certainly.
If your looking for the right time to lock a rate, now may be the time. Mortgage rates are off their best levels of all-time, but still quite low. There’s lot of savings out there for homeowners who qualify.
What’s Ahead For Mortgage Rates This Week : September 7, 2010
Last week was a roller-coaster ride in the conforming mortgage market. After opening the week by making new, all-time lows, markets reversed sharply on better-than-expected data in manufacturing and housing, and data from overseas.
Rates rose through Wednesday and Thursday, then Friday’s jobs report sent rates jumping.
Last week marked the first time that mortgage rates worsened 3 days in a row since late-April.
The combination of the jobs report not posting as poorly as predicted, and light volume because of Labor Day, pushed rates higher by as much as a quarter-percent in some markets.
On the week, conforming mortgage rates were unchanged but, depending on when you locked, there was great disparity. Tuesday’s rates were much better than Friday’s.
Meanwhile, this week, with little data due for release, mortgage rates should remain unpredictable, moving as a result of momentum and outside influence. It makes for dangerous times for rate shoppers. Mortgage rates may fall, but, then again, they might rise, too.
Keep in mind that markets are in the midst of a 19-week rally and rates can’t fall forever. Mortgage bonds are likely overbought so when the selling begins, pricing should worsen quickly. This will cause mortgage rates to spike.
Therefore, if you’ve been shopping for a mortgage or are just wondering if the time is right to refinance, call your loan officer and work the numbers together. Refinancing won’t make sense for everyone, but it may make sense for you.
Mortgage rates are still exceptionally low.
What’s Ahead For Mortgage Rates This Week : August 23, 2010
Mortgage markets stalled last week in back-and-forth trading as Wall Street grappled with weak housing data, falling builder confidence, and worsening jobs numbers nationwide.
Because markets were volatile, rate shopping was challenging.
Conforming mortgage rates did managed to make a new all-time low last Thursday but quickly gave up those gains. Most of Friday afternoon was spent in the red and, as a result, for the second straight week, mortgage rates failed to fall overall.
But, although last week’s action puts a damper on this summer’s mortgage rate rally, the Refi Boom is still going strong.
According to Freddie Mac, as compared to April 8 when mortgage rates touched their recent high-point, pricing is hugely improved across 3 popular loan products.
- 30-year fixed : Then, 5.21%; Now, 4.42%
- 15-year fixed : Then, 4.52%; Now, 3.90%
- 5-year ARM : Then, 4.25%; Now, 3.56%
As an example of potential savings, a homeowner with a $250,000 30-year fixed rate mortgage would save $96 per month at today’s rates as compared to April’s.
Over the life of a loan, that’s a savings of $34,560.
This week, it’s unlikely that the Refi Boom will meet its end, but that doesn’t mean you should wait for rates to fall further. Mortgage rates tend to change quickly and without notice, and should rates rise, you may find that you’ve missed the market bottom.
If today’s rates appeal to your finances and budget, consider locking something in and moving forward.
What’s Ahead For Mortgage Rates This Week : August 16, 2010
Mortgage markets worsened last week, putting a pause on the mortgage rate rally that dates to mid-April. Mortgage rates rose last week and home affordability suffered.
The Refi Boom remains in full effect, but rates are not as dazzling as they were a week ago.
It’s somewhat strange that mortgage rates rose last week given the heavy dose of negative-bending news.
- The Federal Reserve noted that the economy “has slowed“
- New unemployment claims rose to a 6-month high
- Retail sales — excluding auto sales — rose less than expected
Mortgage rates often to fall on such news, but last week, they rose. The biggest reason was weak demand on a new 30-year bond issuance from the government. In turn, that weakness spilled over into mortgage bonds, which pushed rates up.
This week, mortgage rates could rise or fall — it depends on how new data influences market sentiment.
- Monday : Home builder confidence survey
- Tuesday : Housing Starts and Building Permits; Producer Price Index
- Thursday : Jobless claims; 2 Fed members make speeches
Keep a close eye on the housing-related data early in the week. It’s widely believed that housing will lead the economy forward so a rebound in home builder confidence, or a jump in building permits, for example, should push rates even higher. Weakness
In the meanwhile, if you haven’t spoken with your loan officer about a refinance, consider reaching out this week. Rates are lower than they’ve ever been in history and more people are getting financing than the news would have you believe. You can’t know until you ask so make that call today.
What’s Ahead For Mortgage Rates This Week : August 9, 2010
Mortgage markets improved again last week on softer-than-expected economic data, punctuated by Friday morning’s weak jobs report. Conforming mortgage rates dropped on the news, making new, all-time lows.
Mortgage rates have been on an extended rally dating back to mid-April.
This week, there’s a lot of data and news due for release, the most influential to markets of which is the Federal Open Market Committee’s scheduled policy meeting.
8 times annually, the FOMC meets to discuss the nation’s monetary policy with respect to the current and projected U.S. economic conditions. Sometimes the FOMC takes action on the economy. Other times, it does not.
Either way, Fed meetings are market movers and it’s a gamble to float a mortgage rate ahead of an FOMC get-together.
There’s other’s stories to watch this week, too. Each has the ability to change mortgage rates.
- Tuesday : FOMC meeting; Consumer Confidence data
- Thursday : Jobless Claims
- Friday : Retail Sales; Consumer Price Index
It’s a busy week on Wall Street, to be sure, and rate shoppers would do well to pay attention. Not only can the FOMC meeting change mortgage rates for every product in every market, but it can also change the outlook for mortgage rates going forward.
Rates are at an all-time low and low rates can’t last forever. We’re in the middle of a Refi Boom today and, soon, the boom will be over.
If you haven’t spoken to a loan officer about refinancing your home, or locking a mortgage rate, your best time to make the call is prior to the FOMC’s Tuesday afternoon adjournment at 2:15 PM ET. Mortgage rates will get jumpy leading up to the meeting, and will most certainly be volatile afterward.
