Mortgage Rates

Despite continued tariff threats and retaliations between the US and China, the markets are reacting more to the continuing strength in the economy, led by a strong job market.  Overall, the impact on mortgage rates has been a very slight increase that looks more like a sideways movement. Globally, aside from the tariff issues, the Bank of England increased their interest rate this week for only the second time since the financial crisis, noting that the slowing of the economy in the first quarter of the year was temporary. There are no plans…

Mortgage rates have virtually treaded water for the summer, and it looks like that pattern will continue at least for another week.  At this point, nearing the end of the week of July 23rd, the economic data released was Durable Goods and the Weekly Jobless claims, and both came in at expected levels. Friday's GDP report is expected to come in at or above 3%, and the bond market will react negatively as it doesn't like anything at or above 3% for the GDP. There is a risk that this will bring an…

Mortgage rates finished up another week at almost the same point that they began.  It's been a stagnant two+ months for rates, and it doesn't appear to be breaking out of that pattern soon. All the recent economic data continues to point to building inflation, primarily due to a severely tight labor market. Jobless claims announced this week were not only below predictions, but they hit a 60 year low. Federal Reserve Chairman Jerome Powell testified before the House this week, but his bias and policies are consistent, with no new information to…

Overall, despite steady inflationary trends in economic data (Consumer Price Index hit the highest level since 2012), the threat of trade wars is keeping a large portion of investor funds in the US long-term bond market. Without an influx of additional investor dollars into US Bonds, there'll be no noticeable improvement in mortgage rates. While the market also watched for results from the NATO summit, now that it's ended - nothing concrete came from it (the 2% spending level for all member nations was already in the 2014 budget) and attention remains focused on the increasing threat…

It's tempting to take a risk and not lock in an interest rate when you see mortgage rates decline even by a small amount. This is not the week to give in to that temptation. The bond market, which directly impacts mortgage rates, is watching some potentially intense situations unfold globally and these situations could mean a reduction in interest rates if it weren't for one thing: technicals.  What does that even mean? First, let's look at the two leading global situations that have the bond markets' attention. The first is the EU…

As of the end of April, the year-over-year (YOY) nationwide increase in home prices is at 6.4%, based on actual appraisals for all loans sold to Fannie Mae, Freddie Mac or Ginnie Mae (all conforming and government loans.) While it's now almost the end of June, and the data is aged, it's a positive sign from the standpoint that it's not double-digit appreciation which might indicate a housing price bubble. Overall, the markets have not held a lot of surprising data over the last week, with jobs and other economic indicators coming in…

After trending down for the last two weeks, mortgage rates increased over the previous week and could continue that trend. This week saw the Federal Reserve raising not only the Fed Funds rate, but also the Prime Credit rate, and the Reserve Balance rate. In comments by the Federal Reserve Chairman, Jerome Powell, a hawkish shift from the Fed is apparent. Based on robust economic data, healthy rate of job growth and increased consumer spending, the Fed feels the potential to increase rates again in 2018 is likely. The increase in Retail Sales is…

Without any geopolitical flare-ups over the last week, the impact of economic data has been very mild with no measurable effect on the markets or mortgage rates.  The biggest job news was the filing of Jobless claims coming in slightly below predictions, but the 4-week moving average ticked up to 225,500 - amazingly low. Global economic news has also had little effect on mortgage rates, with continued talk of a timeline to end qualitative easing (QE) in the ECB the only topic of import. While the markets are quiet now, all eyes are…

The market continued to improve in the early part of the week, led by the drama coming from Italy and a sharp drop in oil prices.  These issues are no longer impacting the markets, and mid-week Mortgage Backed Securities began to move back into the red, creating a slight pressure of increasing rates to come. Year over year PCE, the key inflation indicator, came in at 1.8% - below the Feds target of 2% - and other economic data was also relatively mild. The release of the Feds Beige Book yesterday (not a…