Mortgage Rate Recap and Outlook for the Week Ending October 16, 2019

The US economy added 140,000 jobs in September, thus keeping the unemployment rate hovering around the acceptable 3.7% mark. And so, though job growth has cooled, we are still at a point where the layoffs are not going out of hand- a possible turnabout that could compromise the US expansion project. Exports are weak, thanks to the trade war. The manufacturing industry is unquestionably in a state of contraction and the service sector has been carried away in its slipstream. And while the US, nobly, is not transferring tariff costs to the end-consumer…continue reading →

My 2019 Predictions for Mortgage Rates, Home Prices, and Stock Market

"It's tough to make predictions, especially about the future" - Yogi Berra And when it comes to predicting Stock Markets, Home Prices, and Mortgage Rates, well, it becomes tougher.  All three are impacted by such myriad of geopolitical and economic news and the emotions resulting from them that it's virtually impossible to foresee all of the variables at the beginning of the year. With that caveat, let's dive into where we are at the beginning of the year and where we are heading or at least where I think we are heading. 2019 Dynamics…continue reading →

Mortgage Rate Recap and Predictions For Week Ending October 19th, 2018

Yesterday the Fed released the Beige Book which contained an even stronger emphasis on the impact of tariffs and labor shortages than the previous two publications. Along with that, all twelve districts in the U.S. said the economy is expanding moderately or at a moderate pace in their region. The issue of labor shortages isn't new news, but employers are stepping up their enticements to try and lure potential job candidates, which include job training and no drug testing. They aren't, however, increasing wage levels but offer non-cash benefits to entice workers. Pending…continue reading →

Mortgage Rate Recap For Week Ending October 19th and Outlook for Week of October 22, 2018

The overview for the week is that housing markets are weakening, growth in wages continues to be below expectations, and Saudi Arabia is in a negative spotlight over the killing of a critic of the Saudi Crown Prince. The stock market is experiencing significant volatility, which saw a gain of 547 points in the DJIA on Tuesday (half of the prior week's loss), but losses on Wednesday and today total 14 points more than the gain on Tuesday. So on top of last weeks -1007, the DJIA is down another 65 points so…continue reading →

Mortgage Rate Recap and Outlook For Week Ending September 28, 2018

The Federal Reserve raised the Fed Fund overnight rate by one-quarter percent yesterday, as predicted. Commentary by Fed President Powell also indicted another increase will come at their December meeting. The markets expected this rate increase so minimal movement in the markets as a result. Further based on the commentary released from the Fed meeting yesterday, going forward the Federal Reserve Board is going to be more reactive and sensitive to market changes. Given this strategy, it's difficult to predict the timing of future rate hikes over the next two years. The Fed…continue reading →

Why You Should Not Use APR to Compare Loans

Everyone in the market for a mortgage loan thinks comparing the Annual Percentage Rate (APR) from competing mortgage companies is the way to choose the best loan. And it’s all wrong. At best, trying to understand what APR means and using it to find the best loan adds unnecessary confusion to the process of finding the right lender. And in the worse case, it gives you incorrect information. Here’s a simple explanation of what APR is, why it exists, and why it may not be helpful in choosing your mortgage. The Annual Percentage…continue reading →

Mortgage Rate Recap and Outlook For Week Ending September 21, 2018

Mortgage rates have increased for the last three weeks, and there's a strong likelihood that they will continue on that path for the foreseeable future, and definitely for the next week. Earlier in the week, there was a sell-off in the market which was justifiable - so no correction is expected. The Fannie Mae 4% coupon is now at it's highest price in several years. Other significant economic data released was Jobless Claims 4-week moving average coming in at a new 50-year low; national median home price, now $264,800, makes 78 straight months…continue reading →

Mortgage Rate Recap and Outlook for Week of September 14, 2018

The last three weeks delivered increasing mortgage rates and the coming week is shaping up to be a repeat. What's behind this negative break from the summer doldrums rates have languished in is a steady sign that inflation is substantially above the Feds target of 2%. The latest CPI 4-week average came in barely below expectations (2.7% vs. 2.8%), while jobless claims, at 208K, are at a 46 year low. The Fed released the latest version of the Beige Book this week as well, highlighting a stable outlook for the US economy, the…continue reading →

Mortgage Rate Recap and Outlook For Week Ending August 31st, 2018

The Federal Reserve uses PCE Index, Personal Consumption Expenditures, as their preferred measure of inflation, and it's now hit a 6-year high at 2.3%. The impact of an uber strong GDP (4.2%), combined with the 2.3% PCE Index, should be causing a sell-off in Mortgage Backed Securities (MBS) - but that's not happening right now. The markets have stagnated waiting for Trade agreements to be hammered out and signed. At this point, Canada is at the table with the U.S. and the possibility exists they will sign by Friday, August 31st.  Mexico already…continue reading →

Mortgage Rate Recap and Outlook For Week Ending August 24th, 2018

If you read the economic "tea leaves," interest rates should be much higher right now than they are given the combination of a booming US economy, the Feds back to raising rates, and inflation solidly above 2.0%. What's holding them steady? Uncertainty in the markets keeps money invested in the bond market - seen as a safe haven for investors when there is actual or potential turmoil expected to rock the markets. Right now there's plenty of that going around. The main issues spooking investors are the continuing effects of tariffs and threatened…continue reading →