Author: Editor - Finance Top Stories

Mortgage Rates Steady at Recent Lows

Mortgage rates held steady today, keeping them in line with the best levels in just over a month.  That means the best-qualified borrowers putting more than 20% down are seeing conventional 30yr fixed rates of roughly 4%, depending on the lender.  Some are quoting rates in the 3.75-3.875% range, but points and fees may vary.  As always, it’s a good idea make sure you’re looking at all lender-related fees when comparing any two rate quotes.  These can include things like origination, discount points, processing, and admin fees.   Today brought the release of economic data that has a track record of inspiring movement in the bond markets that underlie mortgage rates.  Inspiration was lacking in today’s ADP Employment Report, which many view as a take-it-with-a-grain-of-salt barometer for the all-important Employment Situation data that typically follows 2 days later.  ADP reported 178k new payrolls versus a median forecast of 185k.   The nearness to the forecast could easily explain an absence of inspired movement, but beyond that, financial markets are relatively less interested in labor market data at the moment.  Instead, the inflation-specific reports have garnered the most attention as inflation has been the biggest deterrent of more aggressive rate hikes and policy tightening from the Fed.  We don’t have any big inflation data this week, but Friday’s jobs numbers are still a big enough deal that we should respect their potential...

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Mortgage Rates Trickle to 1-Month Lows

Mortgage rates continued lower today, matching the best levels in just over a month.  Prospective borrowers are increasingly seeing conventional 30yr fixed quotes in the high 3% range on top tier scenarios, though 4.00% is still more prevalent overall. Consumer rates are dictated by movement in underlying bond markets.  The first day of any given month can occasionally see bigger moves in bond markets as some of the biggest investors are able to make changes in their holdings that they weren’t able to make until the previous month ended.  It’s as if July’s “final answers” were locked in and now August marks the start of the next round of questions.   On a simpler note, GM posted a sharp decline in auto sales this morning.  This builds a case for economic weakness, leading more traders to seek safer returns in the bond market.  Excess demand for bonds results in lower interest rates. From here, it will be up to the week’s remaining economic data to determine if there is any more life left in the rally.  Each of the next 3 days holds important reports that could help or hurt.  In general, the strong start to the month makes the broader outlook more neutral–perhaps even positive–whereas it made more sense to be defensive last week.  Further strength tomorrow would go a long way toward confirming a positive shift. Today’s Most Prevalent Rates...

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Mortgage Rates Modestly Lower Despite Flat Markets

Mortgage rates moved modestly lower today, despite an absence of improvement in underlying bond markets.  Rates typically rise in this scenario, but this pattern has been more and more common recently.  It’s nothing too scandalous–or even terribly interesting.  Lenders are simply less eager to follow every little juke and head-fake in bond markets when things have been so flat in the bigger picture.  The summertime phenomenon only adds to the apathy.   The net effect is that lenders often find themselves with the need to adjust prices based on bond market movement in the previous business day.  In the current case, that means lenders are getting caught up with Friday afternoon’s bond market improvement, thus allowing for lower rates on a day where bonds are technically weaker. The coming days bring increasingly important economic reports.  These have the power to create more market movement than we saw at the end of last week and thus, a bigger change in mortgage rates, for better or worse.  For now, things have been holding exceptionally steady with an average top tier 30yr fixed rate of 4.0%. Loan Originator Perspectives Bond markets apparently forgot Monday was a business day, and slumbered along, essentially unchanged from Friday’s close.  It’s unlikely we’ll see any significant moves until Wednesday-Friday, as the July NFP Job Situation report takes shape.  The biggest current incentive to float is obtaining better pricing...

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Mortgage Rates Starting to Look Paralyzed

Mortgage rates were generally flat today, despite improvements in underlying bond markets.  Although several lenders did offer price improvements throughout the course of the day, the improvements were generally “token” in nature and did little to alter the sense of paralysis in the bigger picture.  This is the third straight day with essentially no change. Uncertainty, fear, a lack of inspiration, or some combination of the three all have the ability to paralyze rates from time to time.  Uncertainty is leading the charge at the moment.  On the one hand, we have global central banks chomping at the bit to drain the proverbial punch bowl (buying fewer bonds and raising rates).  On the other hand, those central banks admit they can’t be too aggressive without justification from rising inflation, and inflation seems to be in short supply based on recent economic data. Next week brings one of the more important inflation reports on Tuesday.  If it makes a strong statement for better or worse, it could certainly coax mortgage rates out of their exceptionally flat range seen over the past few days.  From there, we’d be waiting for bigger moves to break the generally flat, narrow range that’s been intact over the past few months. Loan Originator Perspectives With bonds in the green following weak inflation data and news out of North Korea regarding a missile launch, i think it is...

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Mortgage Rates Not Exactly Lower This Week

Mortgage rates were mixed today, depending on the lender, but generally held fairly close to yesterday’s levels.  All this in spite of bond market weakness (which normally pushes rates higher).  The discrepancy can be chalked up to a delay between market movements and lenders’ reactions that’s been increasingly prevalent during the summer months.  In other words, lenders still hadn’t fully responded to yesterday’s bond market strength and were thus able to absorb today’s weakness in many cases. On a more interesting and perhaps more important note for confused mortgage rate shoppers, today is Thursday.  That means it’s time, again, for Freddie Mac’s weekly mortgage rate survey–an industry benchmark that’s quoted by multiple news outlets.  Unfortunately, most of the stories fail to drive home the point that Freddie’s survey does more to compare the week’s earliest rate offerings versus those of the previous week.  It’s pretty accurate if you’re looking for week-over-week comparison between Monday’s (and a bit of Tuesday’s) rates.  It runs the risk of being less relevant if there’s volatility during the week. Indeed, we’ve seen rate volatility both this week and last, such that today’s rates are very close to last week’s highs, and noticeably higher than last Friday’s levels.  This runs counter to the 0.04% drop in rates reported by Freddie.  Daily rate offerings are UP by roughly the same 0.04% since Friday. Loan Originator Perspectives Bit of...

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