Published October 17, 2013
Tags: Mortgage, Philadelphia, Rates
From Trident Mortgage’s Director of Secondary Marketing, Phil McGoldrick (aka Oz!):
Now that we’ve gotten a deal from the government to re-open, we begin to look at where that puts us and what the prospects are going forward. Since this is only a “kick the can down the road” deal, and we know that we will need to have a deal in place by mid January, or we will go through all of this again (lets face it, we’ll be going through this again with how dysfunctional Congress has been). We need to look at a few pieces of information to see where we are going:
1: What was the effect on the economy from the government shutdown?
The few projections I have seen are in the camp that the shutdown will cost about .3-.5 off of the GDP for the 4th quarter. Since we were sub 2% in growth going in, this is significant, and shows that the economy is going to need some help to get back on track.
2: With the specter of another government shutdown in January looming, will the Fed look to taper before then if no deal is actually reached in Congress.
Conventional wisdom on this for now is that the Fed tapering is on hold for the time being. Since the economy looks to need a jump start, it is reasonable (although not guaranteed) to expect that the Fed will see this and hold off on Tapering until after the next deadline (unless there is a real budget deal in place before then)
Time will tell, but right now we are seeing the “relief rally” where cash that was on the sidelines is being put back into play in both stocks and bonds. (both rallied after the news of an agreement yesterday) We will see how the numbers come out over the next couple of weeks, but the anticipation is that some will be muted from expectations due to the shutdown.
Published September 22, 2013
Tags: Mortgage, Philadelphia, Rates
In highly anticipated news, the Federal Reserve statement caught nearly every investor by surprise, since they did not begin to taper its bond purchase program. Mortgage rates swiftly dropped following the news and ended the week lower.
While the vast majority of investors expected a small cut in the quantity of monthly Fed bond purchases, the Fed made no change. According to the statement, Fed officials will wait for signs of stronger economic growth before scaling back its bond purchases. Fed Chief Bernanke stated that the economic data “does not yet provide sufficient confirmation” to justify reducing bond purchases. For mortgage rates, the continued demand from the Fed for mortgage-backed securities (MBS) is positive. Investors lost some faith in their ability to anticipate what the Fed will do, though, which likely will lead to high levels of volatility in the future.
The good news for many real estate markets is that the housing sector has been a major source of strength for the economy this year. By waiting to taper, Fed officials will have more time to see what impact the rise in mortgage rates in recent months will have on the housing market. The housing data released this week showed a modest pace of improvement. Here are some telling stats from reports this week:
- August Existing Home Sales increased 2% to the highest level since February 2007, exceeding even the peak seen in November 2009 when the homebuyer tax credit was set to expire
- Existing Sales were 13% higher than one year ago
- Total inventory of existing homes available for sale rose slightly to a 4.9-month supply
TRIDENT MORTGAGE RATE SHEET 9-22-2013
Another week of major volatility in the mortgage rates…we were relatively quiet until the release of the Federal Reserve 7/30 meeting minutes. The details of the minutes furthered uncertainty and interest rates moved .25% higher just on Wednesday afternoon! The good news is we saw them come right back down Friday when the New Home Sales figures came in lower than expected. Quite the roller coaster. It is extremely important in these volatile times for interest rates you inform us once an agreement of sale is reached (once we have a signed agreement we can formally lock the interest rate!). Wednesday is a perfect example…if we found out about a signed agreement at 10am and moved quickly on the rate lock (which we’re doing these days) that buyer could be .25% of a lower rate as opposed to finding out a 4pm that very same day. Crazy, but as we all know in real estate – TIME is of the essence!
TRIDENT MORTGAGE RATE SHEET
Published August 18, 2013
Rates ended the week slightly higher due to renewed concerns over the “tapering off” by the Fed in terms of their Treasury & Mortgage Securities purchase programs. Here are some highlights from the week:
- The housing sector continues to improve despite the recent rise in home loan rates, as Housing Starts rose 5.9 percent from June to July to 896,000 on an annualized basis. This was in line with estimates. Building Permits, a sign of future construction, were up 2.7 percent, coming in above expectations. In addition, the National Association of Home Builders Housing Market Index rose to 59 in August from the 57 recorded in July. This is the best level in nearly eight years. Housing recovery continues to heat up
- Last week, research firm CoreLogic reported that home prices across the U.S. rose by nearly 12 percent from June 2012 to June 2013. By comparison, home prices only rose 3.76 percent from June 2011 to June 2012. In addition, research and analytics firm Clear Capital said that prices rose 9.3 percent in the year ended in July.The housing markets have turned the corner to greener pastures, but it’s important to note that this pace of growth may be unsustainable. With home loan rates rising over the past several months, this rate of appreciation could slow.
- Jumbo Loan Rates (for loans 417k and higher) the same as Conforming Loans (417k and under) - here is a short video on the topic
Thanks again for all your support, and hopefully this is some valuable information to share with your clients! Good luck at your open houses and if you need me I am always available on the weekends!
TRIDENT MORTGAGE RATE SHEET 8-18-2013
Published July 21, 2013
Interest rates remain on the see-saw! Over the past 4-5 weeks we’ve seen them move dramatically each day and sometimes even within the same day. These types of rapid shifts in rates is not normal; but speaks to the uncertainty that remains in financial markets even as we move into a modestly improving economy. This rate sheet puts rates at about a 3 week low point and the trend lower was strong late in the week. If we see that continue we’re very close to hitting the low 4′s. However, with the volatility in the mortgage rate market it may still be wise to lock your rate as soon as you are able to avoid any risk of the unpredictable moves higher.
TRIDENT MORTGAGE RATE SHEET 7-21-2013
Happy belated Fourth of July everyone!
As we’ve been explaining rates have been extremely volatile the last couple of weeks. This week was no different; we began the week moving in our favor and ended the week up sharply in rates.
The big event this week was Friday’s Employment report. The labor market data came in stronger than expected, which was great news for the economy, but it caused mortgage rates to end the week higher.
Against a consensus forecast of 160K, the economy added 195K jobs in June, and upward revisions to the figures from prior months added another 70K. The Unemployment Rate remained at 7.6%. Average Hourly Earnings, a proxy for wage growth, showed the strongest growth in about five years. In short, this report exceeded expectations in nearly every area, which was a double blow for mortgage rates. Stronger labor market data increases future inflation expectations and it brings forward the expected timing for the Fed to begin to scale back its bond purchases.
We still remain at historically low levels throughout all loan programs, and in a rare case a lot of the jumbo loan programs (when borrowing over $417,000) are as close as they’ve ever been to the “conventional” loan programs (under $417,00). This could be welcome news to the move up buyer.
We hope everyone had a nice summer holiday weekend and good luck at all your open houses this weekend.
Trident Mortgage Rate Sheet 7-7-2013
It was another incredibly volatile week as investors attempted to determine the impact of last week’s Fed announcement on mortgage rates. Early in the week, mortgage rates continued to move higher, but reassuring comments from Fed officials caused mortgage rates to reverse direction. After all the daily swings, mortgage rates ended the week a little lower! Hopefully we’ll see this slow move back to slightly lower rates continue as the majority of market opinions out there are that this rapid move higher has been an overreaction.
I also wanted to share an interesting article from the Chicago Tribune a colleague shared with me about mortgage underwriting these days. As we all know some of the requests from underwriting have been detailed and extensive to say the least. Here is an article that goes into some of the insanity we’ve seen on the underwriting side of things in our business.
Enjoy the rest of the weekend and anything we can help you or your clients with let us know!
TRIDENT MORTGAGE RATE SHEET 6-20-2013