Author: Editor - Finance Top Stories

Mortgage Rates Hit 1-Month Highs

There are several news stories out today that reference LOWER rates this week. These all rely on stale survey data that failed to account for changes over the past 2 days.  Mortgage rates actually continued higher today at the same quicker pace seen yesterday.  Due to the relatively narrow range during November, rates are now in line with their highest levels in more than a month whereas they were at 2-week lows just 2 days ago.  The average lender is now quoting conventional 30yr fixed rates of 4.0% on top tier scenarios, with a few outliers at 3.875% and 4.125%.  A few days ago, 3.875% was nearly as prevalent. As we discussed yesterday, the potential tax bill has had a pretty consistent relationship with rates.  To whatever extent it looks passable, rates have generally moved higher.  Today was no exception as McCain, one of the few remaining GOP holdouts, said he’d now vote for the bill.  The Senate plans to vote on the bill late tonight or tomorrow. Today’s Most Prevalent Rates 30YR FIXED – 4.0% FHA/VA – 3.75%  15 YEAR FIXED – 3.375% 5 YEAR ARMS –  2.75 – 3.25% depending on the lender Ongoing Lock/Float Considerations 2017 had proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.  While rates remain low in absolute terms,...

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Mortgage Rates Bounce to 2-Week Highs

Mortgage rates moved higher today, with most lenders quoting their highest rates in at least 2 weeks.  But before you let that worry you too much, know that the range of available rates has been so narrow over the past 2 weeks that it didn’t take much to earn that dubious distinction.  In fact, today’s rate change is pretty close to average.  It wasn’t even enough for lenders to change “note rates” (the actual interest rate applied to a loan balance).  Instead, changes are more likely to be seen in the form of the upfront costs/credits associated with any given rate quote.   Economic data has a longstanding relationship with interest rate movement.  With that in mind, it’s fair to assume that this morning’s strong GDP report had a negative impact on rates.  But that’s not what market participants are focused on at the moment.  Tax reform (among other things) is the bigger issue at the moment. The tax bill has had a pretty consistent relationship with rates.  The more likely it looks, the higher rates go.  If it passes, rates would probably continue higher.  That keeps the potential for volatility quite high in the coming days, especially in light of the other potential market flashpoints including a possible government shutdown. Loan Originator Perspective Bonds regressed today, as current Fed Chairwoman Yellen voiced concerns over national debt expansion.  My pricing was roughly...

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Mortgage Rates Improve Slightly Despite Market Volatility

Mortgage rates improved modestly today as markets digested tax bill headlines and the confirmation hearing for new Fed Chair Jerome Powell.  As the head of the institution that has the biggest impact on short-term rate momentum, Powell is an important figure.  Markets already felt like they knew him pretty well, but today was his first time in the hottest of seats (fielding questions from US Senators seeking to advance some political agenda almost completely unrelated to Powell’s new job duties).  Not only did Powell handle himself well, but he struck a more rate-friendly tone than was generally expected.  Bond markets (which underlie day-to-day rate movement) liked what they heard, as did stocks (which also benefit from easier Fed policy).  The afternoon was dominated by tax bill headlines which put pressure on rates to move back up.  By the end of the day, the volatility left bond markets largely unchanged.  Lenders put out rate sheets in the morning that were slightly better than yesterday’s and only a few of them repriced to higher rates in the afternoon (not quite enough weakness in bonds for widespread reprices).  Loan Originator Perspective Bonds were nearly unchanged this afternoon, despite a Fed member’s dovish inflation comments and a North Korean missile launch.  My rate sheets improved slightly, and the trend (as non-committal as it is) appears to be our friend.  I doubt we’ll see any major...

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Mortgage Rates Flat as Markets Get Back to Business

Mortgage rates were almost perfectly unchanged today as markets returned to full force following the extended Thanksgiving break.  Bond markets (which dictate mortgage rate momentum) had been consolidating in a narrower and narrower range in the weeks leading up to Thanksgiving.  While it’s safe to assume that we’ll see a bigger move in the coming weeks, today didn’t deliver.   The volatility is widely expected to result from the tax reform process.  The Senate will begin debate this week, but don’t expect anything conclusive until mid-to-late December.  Markets are ready to react to success (which would be bad for rates) or failure (which would be good), and will move in the direction of those results to whatever extent one seems more likely than the other.   Loan Originator Perspective Bond markets posted minor gains today, and my rate sheets showed the best pricing in over a week.  It’s important to keep in mind that “the best” is a relative term, since pricing has stayed within a tight range recently,  November’s NFP jobs report hits next Friday, but there’s still GDP data Wednesday and inflation data Thursday.  We’re not in rally phase yet, but at least can imagine getting there.  Float/lock is 50/50, depends on your risk tolerance..   –Ted Rood, Senior Originator My clients are favoring to float overnight.   My rate sheets do not reflect the current pricing of MBS, so i feel safe in recommending...

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Mortgage Rate Volatility Will Increase From Here

Mortgage rates were roughly unchanged today.  That’s not too surprising considering lenders don’t tend to make big moves on the Friday after Thanksgiving, regardless of market conditions.  Moreover, they’re working with a shorter-than-normal trading day.  Bonds normally trade through 5pm Eastern time with 3pm being the deadline for many of the biggest players.  When bonds close early, trading is only open through 2pm and the deadline for the biggest players is a moving target–especially on the day after Thanksgiving. When Federal/Bank holidays result in bonds having a day off, it’s not uncommon for an adjacent day to be one of these “early closes.”  With most holidays, the market closure is contiguous (i.e. an early close day will precede a fully-closed day), thus making it clear to traders when it’s time to work and time to play (or cook or travel or sleep).  Thanksgiving is unique in that the “closed” time is NOT contiguous.  Trading is completely closed on Thursday, but then re-opens again for a mere half-day on Friday (today, in this case). If you’re thinking that doesn’t make much sense, you’re not alone.  Many market participants (and many families, in general) simply treat Thursday as the start of a 4-day weekend.  Some folks (like Congress!) actually start their Thanksgiving holiday on Saturday of the previous week.  That makes the post-Thanksgiving Friday particularly inconsequential for the purposes of following rate movement. ...

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