Market Update- Tuesday November 17th, 2009 11:13 AM ET
Current Trend Direction: Bond Prices Higher/Rates Lower
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond $101.84, -3bp
Are the television business commentators looking at a different economy? You would think so as the media continues to paint a rosy picture, but Main Street isn't seeing any of it. For a more realistic sobering view, here's what Kansas City Fed President Thomas Hoenig had to say about the economy, "We still have significant weakness to work through in the economy in the US, and coupled with a rapidly rising level of debt and enormous moral hazard issues, we have a great deal of work ahead of us"
Fed Chairman Bernanke will be speaking on the economy at the Economic Club in Manhattan. The Chairman's comments yesterday sparked a rally in equities as he indicated no real concern for the devaluation of the dollar.
There are no treasury auctions this week. However, Thursday morning's announcement as to the size of next weeks auctions of 2, 5 and 7 year Notes could be a market mover.
We continue to cautiously float rates here and remain on guard.
30 Year Fixed Rates
4.75% APR 4.77%- No Points
30 Year Fixed No Income Check
5.625% APR 5.649% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.125% APR 5.138% - No Points
4.875% APR 4.888%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
5.75% APR 5.81%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
4.875% APR 4.69% - No Points
Tuesday, November 17, 2009
Thursday, September 24, 2009
Todays Market Update
Thursday September 24, 2009 5:30 pm ET
Current Trend Direction: Sideways
Risks favor: Carefully Floating
Current Price of FNMA 4.5% Bond:$100.94, +28bp
Mortgage Bonds ended higher on the day, up 28 basis points. This is attributed to the media's interpretation of yesterdays Fed meeting.
The Fed did not touch interest rates as expected. However the Fed said they are going to draw out the remaining commitment to buy Mortgage Backed securities through the first quarter of 2010. This tells us that the Fed most likely will not be purchasing more than the original $1,25T they are committed to. Rather, it tells us the Fed is attempting to provide a smoother transition to normal market conditions. It also tells us that mortgage rates will soon begin to move gradually higher instead of a large bump in rates.
Let's be clear, mortgage rates will gradually begin to climb. So it's important to note that if you have been sitting on the sidelines watching interest rates and being entertained by the volatility, the time to make your move is upon you.
In this morning's economic news, Initial Jobless Claims fell by 21,000 in the latest week to 530,000, which was below expectations of 550,000. While this was a better than expected read, it's still not exactly good news regarding the overall employment situation. Think about it...530,000 more people applying for unemployment benefits for the very first time really isn't something to get too excited about. Bonds worsened initially on the headline, but did finish the day up 28 basis points.
Existing Home Sales were reported at 5.10 million, less than expectations of 5.35 million and the first decline in five months. However, there was some good news in the report, as inventories of unsold homes fell to an 8.5 month level...the lowest inventory level seen since April 2007.
We remain cautiously floating interest rates here.
30 Year Fixed Rates
4.99% APR 5.00%- No Points
30 Year Fixed No Income Check
5.625% APR 5.65% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.258% - No Points
5.00% APR 5.013%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
4.875% APR 4.69% - No Points
Current Trend Direction: Sideways
Risks favor: Carefully Floating
Current Price of FNMA 4.5% Bond:$100.94, +28bp
Mortgage Bonds ended higher on the day, up 28 basis points. This is attributed to the media's interpretation of yesterdays Fed meeting.
The Fed did not touch interest rates as expected. However the Fed said they are going to draw out the remaining commitment to buy Mortgage Backed securities through the first quarter of 2010. This tells us that the Fed most likely will not be purchasing more than the original $1,25T they are committed to. Rather, it tells us the Fed is attempting to provide a smoother transition to normal market conditions. It also tells us that mortgage rates will soon begin to move gradually higher instead of a large bump in rates.
Let's be clear, mortgage rates will gradually begin to climb. So it's important to note that if you have been sitting on the sidelines watching interest rates and being entertained by the volatility, the time to make your move is upon you.
In this morning's economic news, Initial Jobless Claims fell by 21,000 in the latest week to 530,000, which was below expectations of 550,000. While this was a better than expected read, it's still not exactly good news regarding the overall employment situation. Think about it...530,000 more people applying for unemployment benefits for the very first time really isn't something to get too excited about. Bonds worsened initially on the headline, but did finish the day up 28 basis points.
Existing Home Sales were reported at 5.10 million, less than expectations of 5.35 million and the first decline in five months. However, there was some good news in the report, as inventories of unsold homes fell to an 8.5 month level...the lowest inventory level seen since April 2007.
We remain cautiously floating interest rates here.
30 Year Fixed Rates
4.99% APR 5.00%- No Points
30 Year Fixed No Income Check
5.625% APR 5.65% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.258% - No Points
5.00% APR 5.013%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
4.875% APR 4.69% - No Points
Thursday, September 10, 2009
Todays market Update
Today's Market Update- Thursday September 10th, 2009 1:05 PM ET
Current Trend Direction: Bond Prices Higher-Interest Rates Lower
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond $101.22, - +53bp
Mortgage Bonds are higher on the heals of today's auction of 30-year bonds. The auction went of slightly better than expected. This week's auctions have gone rather well and have showed decent foreign appetite for our Bonds. This may not last very long as interest rates around the world begin to tick higher, offering investors a more attractive place to put their money, which in turn would force the US to offer higher rates on our Treasuries in order to compete and attract investment.
With the summer now behind us and the kids back in school, it's time to take care of the thing's we have put off. This is an excellent opportunity to obtain some of the lowest mortgage rates seen in a while.
We continue to cautiously float rates here.
30 Year Fixed Rates
4.99% APR 5.013%- No Points
30 Year Fixed No Income Check
5.625% APR 5.65% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.263% - No Points
5.00% APR 5.013%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
4.875% APR 4.69% - No Points
Current Trend Direction: Bond Prices Higher-Interest Rates Lower
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond $101.22, - +53bp
Mortgage Bonds are higher on the heals of today's auction of 30-year bonds. The auction went of slightly better than expected. This week's auctions have gone rather well and have showed decent foreign appetite for our Bonds. This may not last very long as interest rates around the world begin to tick higher, offering investors a more attractive place to put their money, which in turn would force the US to offer higher rates on our Treasuries in order to compete and attract investment.
With the summer now behind us and the kids back in school, it's time to take care of the thing's we have put off. This is an excellent opportunity to obtain some of the lowest mortgage rates seen in a while.
We continue to cautiously float rates here.
30 Year Fixed Rates
4.99% APR 5.013%- No Points
30 Year Fixed No Income Check
5.625% APR 5.65% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.263% - No Points
5.00% APR 5.013%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
4.875% APR 4.69% - No Points
Wednesday, August 5, 2009
Today's Market Update
Today’s Market Update- Monday August 5th, 2009 2:35 PM ET
Current Trend Direction: Bond Prices lower-Interest Rates Higher
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond $99.75, -+6bp
It’s been a wild ride for Bonds so far. Bonds started the day down 50bp, then improved by 75bp only to pull back and are now up only 6bp.
Clearly this is a reaction to the added supply from the Treasury who announced today they will be auctioning off an extra $75B next week. Why is this important to those seeking a home loan? The added supply of Treasuries and lack of the demand to buy them will move interest rates higher. However, while mortgage rates have risen, they are still historically low. A year ago the average 30-year fixed rate mortgage stood at 6.52%.
There are many horror stories about the big lenders and their inability to move loans through their system in a timely manner. Additionally, be careful when being quoted an interest rate. If the quote is much lower than the average, chances are it’s not accurate. Also, lenders like to quote 10-15-day rates. A 10-day rate is lower than a 30-day rate and so on. You’re not going to close in 10 or 15 days, so these rate quotes are useless unless you intend to float (not lock) your rate at time of application.
The most important aspect of getting a home loan today is dealing with experienced professionals that understand the policies and procedures of this ever changing landscape.
Important note:
The information provided in the “Market Update” is very helpful to those who are considering financing. On average, our clients lock into lower rates because of this timely information and because the knowledge and expertise of the professionals at North Atlantic Mortgage Corp.
30 Year Fixed Rates
5.50% APR 5.52%- No Points
30 Year Fixed No Income Check
5.625% APR 5.65% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.375% APR 5.40%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
5.00% APR 4.69% - No Points
Call for rates on more loan programs not listed here.
Current Trend Direction: Bond Prices lower-Interest Rates Higher
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond $99.75, -+6bp
It’s been a wild ride for Bonds so far. Bonds started the day down 50bp, then improved by 75bp only to pull back and are now up only 6bp.
Clearly this is a reaction to the added supply from the Treasury who announced today they will be auctioning off an extra $75B next week. Why is this important to those seeking a home loan? The added supply of Treasuries and lack of the demand to buy them will move interest rates higher. However, while mortgage rates have risen, they are still historically low. A year ago the average 30-year fixed rate mortgage stood at 6.52%.
There are many horror stories about the big lenders and their inability to move loans through their system in a timely manner. Additionally, be careful when being quoted an interest rate. If the quote is much lower than the average, chances are it’s not accurate. Also, lenders like to quote 10-15-day rates. A 10-day rate is lower than a 30-day rate and so on. You’re not going to close in 10 or 15 days, so these rate quotes are useless unless you intend to float (not lock) your rate at time of application.
The most important aspect of getting a home loan today is dealing with experienced professionals that understand the policies and procedures of this ever changing landscape.
Important note:
The information provided in the “Market Update” is very helpful to those who are considering financing. On average, our clients lock into lower rates because of this timely information and because the knowledge and expertise of the professionals at North Atlantic Mortgage Corp.
30 Year Fixed Rates
5.50% APR 5.52%- No Points
30 Year Fixed No Income Check
5.625% APR 5.65% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.375% APR 5.40%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
5.00% APR 4.69% - No Points
Call for rates on more loan programs not listed here.
Monday, August 3, 2009
Today’s Market Update- Monday August 3 rd, 2009 3:16 PM ET
Current Trend Direction: Sideways
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond $100.03, -59bp
Mortgage Bonds are sharply lower today since prices on Friday could not break above the
100-day Moving Average. Stocks continue to move higher and is adding selling pressure to Bonds.
There is a big week of market moving news ahead with the Personal Consumption Expenditure Index report tomorrow and Fridays Jobs Report. Another big mover may be Thursday’s announcement regarding the next round of Treasury Auctions for the following week.
With little being done by the banks and the government regarding the middle to high end real estate and mortgage market, we continue to offer some of the lowest rates on these loans. Right now is a good time to call us for a free consultation.
30 Year Fixed Rates
5.25% APR 5.27%- No Points
30 Year Fixed No Income Check
5.875% APR 5.90% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.27%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
5.00% APR 4.69% - No Points
Call for rates on more loan programs not listed here.
Current Trend Direction: Sideways
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond $100.03, -59bp
Mortgage Bonds are sharply lower today since prices on Friday could not break above the
100-day Moving Average. Stocks continue to move higher and is adding selling pressure to Bonds.
There is a big week of market moving news ahead with the Personal Consumption Expenditure Index report tomorrow and Fridays Jobs Report. Another big mover may be Thursday’s announcement regarding the next round of Treasury Auctions for the following week.
With little being done by the banks and the government regarding the middle to high end real estate and mortgage market, we continue to offer some of the lowest rates on these loans. Right now is a good time to call us for a free consultation.
30 Year Fixed Rates
5.25% APR 5.27%- No Points
30 Year Fixed No Income Check
5.875% APR 5.90% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.27%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
5.00% APR 4.69% - No Points
Call for rates on more loan programs not listed here.
Tuesday, July 21, 2009
Mortgage Market Update
Today’s Market Update- Friday July 21st, 2009 1:40 PM ET
Current Trend Direction: Sideways
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond- $100.16 +59bp
Mortgage Bonds are up 59 basis points after being up as high as 80 basis points earlier.
Stocks started the day up and have since fallen into negative territory.
As I have mentioned many times in the past, Mortgage Bonds typically move in the opposite direction of stocks. So when you see the Dow moving higher you can usually (not always) assume that Mortgage rates are moving higher as well.
Fed Chairman Ben Bernanke testified on Capital Hill today. Bond traders, fearful of the dreaded inflation word were relieved when Bernanke said “Expectations for a lethargic recovery should keep a lid on inflation this year”.
We suggest continuing to carefully float interest rates as Mortgage Bonds hover above their 50-Day Moving Average.
30 Year Fixed Rates
5.25% APR 5.27%- No Points
30 Year Fixed No Income Check
5.875% APR 5.90% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.27%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
5.00% APR 4.69% - No Points
Current Trend Direction: Sideways
Risks favor: Carefully Floating
Current Price of FNMA 4.50% Bond- $100.16 +59bp
Mortgage Bonds are up 59 basis points after being up as high as 80 basis points earlier.
Stocks started the day up and have since fallen into negative territory.
As I have mentioned many times in the past, Mortgage Bonds typically move in the opposite direction of stocks. So when you see the Dow moving higher you can usually (not always) assume that Mortgage rates are moving higher as well.
Fed Chairman Ben Bernanke testified on Capital Hill today. Bond traders, fearful of the dreaded inflation word were relieved when Bernanke said “Expectations for a lethargic recovery should keep a lid on inflation this year”.
We suggest continuing to carefully float interest rates as Mortgage Bonds hover above their 50-Day Moving Average.
30 Year Fixed Rates
5.25% APR 5.27%- No Points
30 Year Fixed No Income Check
5.875% APR 5.90% - No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.27%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
5.00% APR 4.69% - No Points
Thursday, July 16, 2009
Mortgage Market Update
Today's Market Update- Thursday, July 9th, 2009 11:15AM ET
Current Trend Direction: Sideways
Risks favor: Floating Rates
Current Price of FNMA 4.50% Bond- 100.78, -16bp
Bonds got a nice boost yesterday from a strong 10-Year Note Auction, giving them a strong 66bp gain on the day and giving them a convincing break above the tough ceiling of resistance, the 50-day Moving Average. Interest rates are lower but, can reverse sharply as technical indicators show bonds are "overbought". Hence, we are cautiously recommending floating interest rates here and be ready to lock in at a moments notice.
Economist and Author Harry Dent said in his July Forecast "This may be the last chance to refinance mortgages for lower fixed rates for the next 3 to 5 years". His forecast calls for stocks and treasury yields to rally, followed by a falling stock market and rising interest rates.
30 Year Fixed Rates
5.125% APR 5.148%- No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.35%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
5.00% APR 4.69% - No Points
Current Trend Direction: Sideways
Risks favor: Floating Rates
Current Price of FNMA 4.50% Bond- 100.78, -16bp
Bonds got a nice boost yesterday from a strong 10-Year Note Auction, giving them a strong 66bp gain on the day and giving them a convincing break above the tough ceiling of resistance, the 50-day Moving Average. Interest rates are lower but, can reverse sharply as technical indicators show bonds are "overbought". Hence, we are cautiously recommending floating interest rates here and be ready to lock in at a moments notice.
Economist and Author Harry Dent said in his July Forecast "This may be the last chance to refinance mortgages for lower fixed rates for the next 3 to 5 years". His forecast calls for stocks and treasury yields to rally, followed by a falling stock market and rising interest rates.
30 Year Fixed Rates
5.125% APR 5.148%- No Points
30-Year Jumbo Fixed Rates to $729,000
5.25% APR 5.35%- 1 Point
30-Year Jumbo Fixed Rates to $1,000,000
6.00% APR 6.01%- No Points
5/1 Jumbo Arm to $1,500,000
4.50% APR 4.54% - No Points
7/1 Jumbo Arm to $1,500,000
5.00% APR 4.69% - No Points
Friday, May 29, 2009
Todays Market Update
Today's Market Update- Friday May 29, 2009, 2:35 PM ET
Current Trend Direction: Bonds Higher/Interest Rates lower
Risks favor: Floating
Current Price of FNMA 4.00% Bond- 98.28 +109 bp
30 Year Fixed Rates
5.00% APR 5.089%
30-Year Jumbo Fixed Rates
5.375% APR 5.466%
5/1 Jumbo Arm
4.50% APR 4.61%
7/1 Jumbo Arm
4.75% APR 4.70%
What a difference a day makes. After loosing 207 basis points on Wednesday, Mortgage Bonds clawed their way back up 37 basis points on Thursday and are currently up106 basis points so far today, thanks to the 200-Day Moving Average floor of support. Yesterday's price improvement has created a Positive Stochastic Crossover. This usually is a sign of a trend reversal from lower to higher. However, bonds will need to repair the recent damage and will be up against resistance.
The massive supply of treasuries was the reason for the losses in bonds. As you may remember from Economics 101, any time supply exceeds demand, prices will move lower. And remember, a lower price in bonds equal's higher mortgage rates. Hopefully, the market will find a balance as lower bond prices attracts more buyers.
We may continue to see improvement, but it will be tough to see rates get back to levels seen last week, due to fundamental and technical reasons.
What many are not aware of is that the Fed is buying treasuries at the same time they are selling them.
What idiot came up with this idea?
With Mortgage rates now above 5%, the Fed may come out with an announcement that they will buy even more Mortgage Backed Securities and longer-term Treasuries to help keep rates low. The Fed does not want the refinance activity and lagging home purchase market to slow down any time soon.
We are currently recommending floating rates here while waiting for improvements to interest rates.
Today's Market Update
Wednesday May 27, 2009 5:32 PM ET
Current Trend Direction:
Bonds Lower/Interest Rates Higher
Risks favor: Locking
Current Price of FNMA 4.00% Bond- 96.84 -207bp
30 Year Fixed Rates
5.00% APR 5.202%
30-Year Jumbo Fixed Rates
5.75% APR 5.856%
5/1 Jumbo Arm
4.50% APR 4.61%
7/1 Jumbo Arm
4.75% APR 4.70%
Concerning developments in the bond market today. As mentioned yesterday Mortgage Bonds reacted poorly to the news the government is adding to the supply of treasury's. Well today's treasury auction results while not terrible, sparked a massive sell off in the bond and stock markets.
Mortgage Bonds lost a staggering 207 basis points in addition to the 165 basis point losses just over the past few days. Needless to say this is bad news for mortgage rates.
They say "When you snooze, you loose". As you know, I have advocated getting your mortgage application in and locking into an interest rate while they are low. For those of you who listened, congratulations and for those who didn't, better luck next time. When and if there is a next time in the near future.
The Dow Jones lost 173 points to finish the day at 8300. typically the bond and the stock markets move in opposite directions, but stocks reacted negatively to the bond market news as well.
Existing Home Sales were reported at 4.68M, higher than expectations of 4.65M. Inventory of unsold homes rose to a 10.2 month level from April's reading of 9.6, but well below the 11 month reading seen in November. The supply of homes above $750,000 is now at a 40-month supply. Unfortunately this area of the market has not received any attention by helping improve the costs and availability of jumbo loans.
So far Fixed rates have climbed higher by about one half of one percent to about 5.50%- No points. Three, Five and 7 year Arms have maintained there rates, but will rise if the bond market does not improve quickly.
We continue our bias toward locking rates for now.
Tuesday, May 26, 2009
Today's Market Update Tuesday May 26, 2009 4:16 PM ET
Current Trend Direction: Sideways
Risks Favor: Locking
Current Price of FNMA 4.00% Bond - 99.09 -32bp
30 Year Fixed Rate
4.375% APR 4.57%
30 Year jumbo Fixed Rate
5.125% APR 5.23%
5/1 Jumbo Arm
4.50% APR 4.61%
7/1 Jumbo Arm
4.75% APR 4.70%
Mortgage Bonds are down 41 bp on the day.
The sell off was contributed to better than expected consumer sentiment and a strong day of gains for stocks.
This may prove to be a bad week for Mortgage Bonds. As discussed last week there is a massive supply of Treasuries hitting the markets this week and poor auction results will only worsen an already concerning situation.
We are recommending locking rates here ahead of further short term market deterioration.
So far, Adjustable Rate Mortgages , such as the 3, 5 and 7/1 Arm's have not re priced for the worse. However, if the market continues down this path then re pricing for these mortgages is inevitable.
Current Trend Direction: Sideways
Risks Favor: Locking
Current Price of FNMA 4.00% Bond - 99.09 -32bp
30 Year Fixed Rate
4.375% APR 4.57%
30 Year jumbo Fixed Rate
5.125% APR 5.23%
5/1 Jumbo Arm
4.50% APR 4.61%
7/1 Jumbo Arm
4.75% APR 4.70%
Mortgage Bonds are down 41 bp on the day.
The sell off was contributed to better than expected consumer sentiment and a strong day of gains for stocks.
This may prove to be a bad week for Mortgage Bonds. As discussed last week there is a massive supply of Treasuries hitting the markets this week and poor auction results will only worsen an already concerning situation.
We are recommending locking rates here ahead of further short term market deterioration.
So far, Adjustable Rate Mortgages , such as the 3, 5 and 7/1 Arm's have not re priced for the worse. However, if the market continues down this path then re pricing for these mortgages is inevitable.
Friday, May 22, 2009
Today’s Market Update Friday May 22, 2009 10:48 am ET
Current Trend Direction: Sideways
Risks Favor: Very Carefully Floating
Current Price of FNMA 4.00% Bond – 99.62 +9
30 Year Fixed Rate
4.375% APR 4.57%
30 Year jumbo Fixed Rate
5.125% APR 5.23%
5/1 Jumbo Arm
4.50% APR 4.61%
7/1 Jumbo Arm
4.75% APR 4.70%
Mortgage Bonds are near unchanged, but well off the highs seen earlier in the day.
Yesterday Mortgage Bonds got hit with a one, two punch, which pressured prices lower and mortgage rates higher.
First- the Treasury announced they are going to sell $162B worth of Bonds next week. That is a lot of paper that has to be absorbed by the market. That additional supply will hurt Bond prices, making it difficult for them to move higher. This is what happens when the Government has to issue all this debt to pay for the massive stimulus programs.
Then, Pimco’s Bill Gross basically said, the US will eventually lose its AAA credit rating. Even though he did not see that happening any time soon, his comments spooked the markets into a further sell off.
The New York Federal reserve purchased another $25B in Mortgage Backed Securities from May 14 through May 20, bringing the year-to-date total to $482B, out of the $1.25T that its has been allotted. Rates can’t improve much further unless the Fed goes in and buys significant amounts of 4 to 3.5% Bonds.
Hopefully you protected yourself by locking into a rate before yesterdays sell off. If not, let this be a lesson in trying to time the market. So, be sure to lock in if and when these interest rates move down again.
The Bond Market will close early at 2:00 pm today and will be closed Monday in observance of Memorial Day.
Current Trend Direction: Sideways
Risks Favor: Very Carefully Floating
Current Price of FNMA 4.00% Bond – 99.62 +9
30 Year Fixed Rate
4.375% APR 4.57%
30 Year jumbo Fixed Rate
5.125% APR 5.23%
5/1 Jumbo Arm
4.50% APR 4.61%
7/1 Jumbo Arm
4.75% APR 4.70%
Mortgage Bonds are near unchanged, but well off the highs seen earlier in the day.
Yesterday Mortgage Bonds got hit with a one, two punch, which pressured prices lower and mortgage rates higher.
First- the Treasury announced they are going to sell $162B worth of Bonds next week. That is a lot of paper that has to be absorbed by the market. That additional supply will hurt Bond prices, making it difficult for them to move higher. This is what happens when the Government has to issue all this debt to pay for the massive stimulus programs.
Then, Pimco’s Bill Gross basically said, the US will eventually lose its AAA credit rating. Even though he did not see that happening any time soon, his comments spooked the markets into a further sell off.
The New York Federal reserve purchased another $25B in Mortgage Backed Securities from May 14 through May 20, bringing the year-to-date total to $482B, out of the $1.25T that its has been allotted. Rates can’t improve much further unless the Fed goes in and buys significant amounts of 4 to 3.5% Bonds.
Hopefully you protected yourself by locking into a rate before yesterdays sell off. If not, let this be a lesson in trying to time the market. So, be sure to lock in if and when these interest rates move down again.
The Bond Market will close early at 2:00 pm today and will be closed Monday in observance of Memorial Day.
Tuesday, May 19, 2009
Today's Mortgage Market Update
Today’s Market Update- Tuesday May 19th, 2009 11:33 am ET
Current Trend Direction: Sideways
Risks favor: Floating as prices bounce off 100-day Moving Average
Current Price of FNMA 4.00% Bond- 99.81 -6bp
30 Year Fixed Rates
4.25% APR 4.44%
30-Year Jumbo Fixed Rates
5.125% APR 5.23%
5/1 Jumbo Arm
4.50% APR 4.61%
7/1 Jumbo Arm
4.75% APR 4.70%
Bond prices fell yesterday as stocks roared higher. The decline in Bond prices were halted by 100-day Moving Average floor of support and is where it is trading at the moment.
Remember, a strong stock market is bad for bond prices and mortgage rates.
Housing starts fell 12.8% to a seasonally adjusted rate of 458,000 units, well below expectations of 520,000 and the lowest on record since January of 1959.
Building permits also fell to a record low of 494,000 units, down 3.3% from March. Fewer homes being built can help to burn of existing inventory.
The credit markets are seeing improvement and banks are continuing to rebuild confidence in each other, with the LIBOR at .75% today, the lowest on record and a far cry from the 4.81% seen back in October.
JP Morgan, Morgan Stanley and Goldman Sachs have applied to repay up to a combined $45 Billion in TARP money.
We will continue to float rates here as we rest above the 100 day moving average. However, a break below the 100- day MA would not be good for mortgage rates.
Current Trend Direction: Sideways
Risks favor: Floating as prices bounce off 100-day Moving Average
Current Price of FNMA 4.00% Bond- 99.81 -6bp
30 Year Fixed Rates
4.25% APR 4.44%
30-Year Jumbo Fixed Rates
5.125% APR 5.23%
5/1 Jumbo Arm
4.50% APR 4.61%
7/1 Jumbo Arm
4.75% APR 4.70%
Bond prices fell yesterday as stocks roared higher. The decline in Bond prices were halted by 100-day Moving Average floor of support and is where it is trading at the moment.
Remember, a strong stock market is bad for bond prices and mortgage rates.
Housing starts fell 12.8% to a seasonally adjusted rate of 458,000 units, well below expectations of 520,000 and the lowest on record since January of 1959.
Building permits also fell to a record low of 494,000 units, down 3.3% from March. Fewer homes being built can help to burn of existing inventory.
The credit markets are seeing improvement and banks are continuing to rebuild confidence in each other, with the LIBOR at .75% today, the lowest on record and a far cry from the 4.81% seen back in October.
JP Morgan, Morgan Stanley and Goldman Sachs have applied to repay up to a combined $45 Billion in TARP money.
We will continue to float rates here as we rest above the 100 day moving average. However, a break below the 100- day MA would not be good for mortgage rates.
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