Current Mortgage Rates for Wednesday, January 28, 2015

Despite your standard intraday swings, mortgage backed securities were largely flat yesterday. Mortgage rates were effectively flat.  A lot of domestic data was issued yesterday, and it was largely mixed.  The Durable Goods report for December was very poor, and the Richmond Fed Manufacturing Index showed weakness, while Consumer Confidence and New Home Sales jumped. Very low trading volumes (largely a result of the snowstorm that shut down a lot of the transportation in the northeast), the prospect of today’s Federal Reserve meeting announcement, and overseas events pretty much kept our bond markets on an even keel yesterday.

This morning, mortgage backed securities are just slightly in the green, and I think things are going to be choppy.  Not a lot of data is being issued with the exception of today’s Fed announcement (which I guess could be termed “data.”). Any improvement that we’re seeing is likely a result of a flight to safety from the disaster that is Europe at the moment.

Click here to see our current mortgage rates.


Today’s Economic Data:

Not much today, but since we have space to fill, it’s worth discussing Greece and Europe for a bit. This is going to be a simplified explanation (I’m not an expert in the Eurozone), but here goes: As part of a bailout deal back in 2012, the European Central Bank, the IMF, and the European Commission imposed very severe austerity measures on Greece (the Germans, in particular, had a big hand in these austerity measures).  the austerity measures caused widespread unemployment to become worse, and sent poverty levels soaring.





In response the Greek people elected new Prime Minister Alex Tsipras from the anti-austerity Syriza party (which is an acronym for “The Coalition of the Radical Left).  Jacobin Magazine – yes I know, hardly an unbiased source – has a pretty good rundown of the party’s platform and what it could mean for Greece moving forward here.

Tsipras has already began fighting the austerity measures, remarking “We won’t get into a mutually destructive clash, but we will not continue a policy of subjection.”  He has said that Greek will not default on its debts, but the markets don’t seem to be buying, and a Bloomberg article says that Greek credit-default swaps are signalling a 70 percent probability of some form of default in the next five years.  Furthermore, there is a concern that this win will embolden leftists in some of the other countries where austerity has been imposed, particularly Spain, Italy, and Ireland.  If Greece’s creditors blink, it may embolden the populist movements in these countries.  A disorderly break-up of the Eurozone still seems pretty unlikely to me, but it’s a little more in play than it was before the weekend.

TL; DR: Greece’s rejection of austerity measures is roiling European debt markets, and we’re seeing a flight to the safety of U.S. bonds.  This should be of benefit to mortgage rates.

Today’s Fed Meeting:

I don’t know that I can bring myself to recap this again.  For more background, you could read yesterday’s blog, Tim Duy’s recent work, or Jon Hilsenrath’s preview.  Long and short is that while there is some risk to rates today, I don’t think there will be much impact from the statement.  If it is interpreted as being more dovish, we’ll benefit a little, and if it is more hawkish, rates will rise a bit in response.  But I expect that this will be more of a “stay the course” type deal, and that the Fed is still balancing what to do in the face of global headwinds, inflation that is low and likely to be going lower, a stronger dollar, low oil prices, and weak wage gains.  I don’t think we’ll glean much today.  If there’s something of interest, perhaps I’ll write up something additional this afternoon.

This Week’s Scheduled Economic Data That Could Impact Mortgage Rates:

Monday:

• Greek election: Syriza wins – ultimate outcome very uncertain.

Tuesday:

• Durable Good Orders: Headline expectation: 0.7 percent, actual, -3.4 percent.  Core expectation: 0.8 percent, core actual: -0.8 percent.
• S&P/Case-Shiller Home Price Index for November: Expected seasonally adjusted month-over-month expectations: 0.6 percent.  Actual: 0.7 percent.
• New Home Sales: Expectation: SAAR of 452k.  Actual: 481k.
• Consumer Confidence:  Expectation: 96, actual: 102.9.

Wednesday:

• Fed meeting:

Thursday:

• Weekly Jobless Claims:

Friday:

• Advance Estimate Q4 GDP:
• Chicago PMI:
• Consumer Sentiment:

source: totalmortgage.com
 

Current Mortgage Rates for Tuesday, December 30, 2014

Yesterday mortgage backed securities gained a little ground, and we’re seeing a continuation of that rally this morning.  If the rally is sustained throughout the session, MBS pricing will be as good or better than it was prior to the last Fed meeting on December 15th (which prompted a rise in rates). On a day-to-day basis, we’ve seen a fair amount of fluctuation in mortgage rates, but on average rates have been generally stable since the beginning of the month.

Are you looking for a new mortgage?  Every big investment deserves a last look.  Give us a chance to beat another lender’s rate, and we’ll give you $25 just for calling (click here for terms and conditions).  Whether we can beat the rate or not.  Call us today!


Today’s Economic Data:

Today’s data is not especially influential, but it’s what we have to talk about today.  First up is the S&P/Case-Shiller Home Price Index for October.  The numbers came in pretty much in line with expectations.  Home prices (Not Seasonally Adjusted) were up +4.5% over last year.  The pace of home price increases continues to slow.  It’s always worth mentioning that this index is a three-month moving average that is reported on a two lag.

The other piece of data issued this morning was Consumer Confidence for December.  The index showed a reading of 92.6, just slightly missing expectations, but up from November’s reading of 91. Perhaps somewhat promisingly, those surveyed who said that jobs were “plentiful” increased, while those saying that jobs were “hard to get” decreased.  On the other hand, those anticipating fewer jobs in the future increased, while those expecting more jobs in the coming months decreased. Somewhat of a mixed report.

As I mentioned yesterday, holiday weeks tend to lead to low volume, and illiquidity in the market. As a result, we need to take any market moves with a grain of salt, and bear in mind that any big swings have a tend to reverse themselves after the holidays.  We’re not seeing anything like that right now, but it’s something you should be aware of if you’re in the process of getting a mortgage but have yet to lock your mortgage rate.

Right now, mortgage rates are close to as favorable as they have been since the beginning of the month.
This Week’s Significant Economic Data:

Monday:

• Dallas Fed Manufacturing Survey: Expected: 9.5, actual: 4.1.

Tuesday:

• S&P/Case-Shiller Home Price Index: 20-city Not Seasonally Adjusted month-over-month: Expected: -0.2%, actual: -0.1%.  Year-over-year Expected: +4.5%, actual: +4.5%.
• Consumer Confidence:

Wednesday:

• Weekly Jobless Claims:
• Chicago PMI

Thursday:

• Markets Closed New Year’s

Friday:

• PMI Manufacturing Index:
• ISM Manufacturing Index:

source:  totalmortgage.com

Current Mortgage Rates for Tuesday, December 23, 2014

Yesterday mortgage backed securities gained ground, to the advantage of mortgage rates.  This morning, we’ve pretty much given up those gains.  Just in the event you’re unfamiliar: there is an inverse relationship between mortgage rates and MBS prices.  As prices rise, rates fall, and vice versa.  Generally speaking, bond prices rise on bad economic data or increased riskiness, and fall on good economic data.  This morning’s domestic economic data is mixed, but on the positive side, and right now mortgage rates are under upward pressure.

Are you looking for a new mortgage?  Every big investment deserves a last look.  Give us a chance to beat another lender’s rate, and we’ll give you $25 just for calling (click here for terms and conditions).  Whether we can beat the rate or not.  Call us today!


Today’s Economic Data:

So third quarter GDP was revised upward to 5.0%, well above the 4.3% consensus.  This is the fastest growth since 2003.  We may see GDP estimates dip a bit in the coming quarters as a result of the drop in oil prices.  Still, this is an unexpectedly strong report, and another sign that the economy is picking up steam heading into 2015.

On the other hand, Durable goods orders contracted by -0.7% from October to Novemeber, compared to expectations of a 3.1% increase.  Durable goods orders excluding transportation orders were down -0.4%, compared to expectations of a 1.3% increase.

How does This Impact Mortgage Rates?:

Well, in the short term, mortgage rates are under upward pressure.  In the longer term, if we continue to see growth like this, a mid-2015 rate hike from the Fed looks increasingly likely.  Tim Duy had a really good post yesterday about the last cycle of rate hikes, and how they were communicated and executed.  It’s good reading.

Of course everything is data dependent, but everything is lining up for a rate hike in the middle of 2015.  If you’re looking for a new mortgage, this is something of which you need to be aware.

This Week’s Significant Economic Data:

Monday:

• Existing Home Sales: Expected: 5.20M, actual, 4.93M.

Tuesday:

• Durable Good Orders: Expected: 3.1%, actual: -0.7%.
• GDP: Expected: +4.3%, actual. +5.0%
• Personal Income and Outlays:

Wednesday:

• Weekly Jobless Claims

Thursday:

• Markets Closed for Christmas

Friday:

• No significant data.

source: totalmortgage.com

Current Mortgage Rates for Friday, December 12, 2014

Despite the volatility we’ve seen in mortgage backed securities recently, mortgage rates are really not significantly changed since the middle of October.  This week’s Primary Mortgage Market Survey from Freddie Mac reported the average mortgage rate on a 30-year fixed-rate mortgage at 3.93%. The average rate on the week of October 16th?  3.97%. So far this morning MBS are rallying, and presuming the rally continues, we’ll see a slight improvement in rates today.


Today’s Economic Data:

There are a couple economic releases today.  First off, The Producer Price Index for November was released today.  Inflation continues to be low to non-existant.  The headline number showed a -0.2% decrease in PPI from October, just a little above expectations.  The core number (ex-food and energy) came in flat from October, and at 1.6% year-over-year.  Next week we get the Consumer Price Index for November, and I wouldn’t anticipate we’ll much inflation there, either.

The mid-month reading of consumer sentiment for November came in at 93.8, compared to a consensus expectation of 89.5.  Although this is not a particularly significant release, it’s another sign that the economy is trending in the correct direction.

Today’s Fed Speculation:

There’s a Fed meeting next week, and it’s widely anticipated that there will be a change in the forward guidance, specifically that the promise to keep rates low for an “extended period” will be changed to something indicating that the time frame for a rate hike will be determined by the data as opposed to the calendar.  I think the expectation is so widespread that any change is likely baked into bond prices, although I wouldn’t be surprised if things get a little volatile on the 17th.  If you are in the process of getting a mortgage and have a floating rate, it may be wise to lock prior to next Wednesday.

I don’t know that I can summon up any more words on the Fed this morning.  I would direct you to Tim Duy’s December 8th blog post “Fed Updates Ahead of FOMC Meeting” if you want to read some pertinent (and fairly wonkish) insight into what the Fed may be planning for the next few months.  The long and short is that it still looks like the path is being cleared for a Mid-2015 rate hike.  Depending upon the data, of course.

This Week’s Significant Economic Data:

Monday:

• No significant data.

Tuesday:

• Job Openings and Labor Turnover Survey

Wednesday:

• No significant data.

Thursday:

• Weekly Jobless Claims: Expected: 295k, actual: 294k.
• Retail Sales (core, ex-gas and -auto): Expected: +0.5%, actual: +0.6%.

Friday:

• Producer Price Index – Final Demand (headline, month-over-month): Expected: -0.1%, actual: -0.2%.  Core expected: +0.1%, acutal: flat.
• Consumer Sentiment

source: totalmortgage.com

Current Mortgage Rates for Monday, December 8, 2014

On Friday a better-than-expected November jobs report hit mortgage backed securities with the force of an Earnie Shavers right hook.  Although the market eventually found its footing, it remained somewhat staggered for the remainder of the day.  Mortgage rates deteriorated as a result of the sell-off. (For the uninitiated: the simplest explanation of how mortgage rates are calculated is that they are a function of the yield on mortgage backed securities.  When the price of MBS rises, yields fall, and mortgage rates fall.  The reverse is also true.)  The week ahead doesn’t feature much economic data of great import, and I think that we will see rates bounce around current levels until next week’s Fed meeting.


Today’s Economic Data:

There’s some short duration treasury auctions today, and we hear from Dennis Lockhart of the Atlanta Fed, but outside that, there’s not much on the docket.

The Week Ahead:



We’re not looking at a very exciting week, methinks.  On Thursday we get November’s Retail Sales report, and on Friday the Producer Price Index for November.  These are likely the most influential numbers of the week, and some of the last influential data points we’re going to see prior to the last Fed meeting of the year.  As I mentioned above, I think we’re probably in a holding pattern, rates-wise, until the Fed meeting that ends on December 17th.

Today’s Fed Speculation:

Most of the speculation right now revolves around whether or not the Fed is going to remove language from it’s forward guidance saying that rates will be kept low for a “considerable time.” Thrilling stuff.  A lot of what I read seems to suggest that the Fed will switch the language to something indicating that future rate hikes will be data dependent rather than calendar dependent, and that the expectation of a change in language is already largely baked into bond prices.  So unless the statement is more optimistic than expected, I don’t think the removal of the “considerable time” language will cause any seismic changes to the mortgage rate landscape.

This Week’s Significant Economic Data:


Monday:

• No significant data.

Tuesday:

• Job Openings and Labor Turnover Survey

Wednesday:

• No significant data.

Thursday:

• Weekly Jobless Claims
• Retail Sales

Friday:

• Producer Price Index – Final Demand
• Consumer Sentiment

source:  totalmortgage.com