Author: Editor - Finance Top Stories

Mortgage Rates Highest in More Than a Month After Fed

Mortgage rates rose today following the announcement and–more importantly–the Fed’s updated economic projections.  The Fed holds 8 meetings a year.  They release an official policy announcement after all of those.  Four of the meetings are “special” and are followed not only by a policy announcement, but also by updated economic projections from Fed members.  These projections include an important “dot plot” of the Fed’s rate hike expectations. The so-called dots have been more important than the actual announcement on some occasions.  While most of today’s press coverage will focus on the fact that the Fed finally enacted its plan to shrink its balance sheet.  That was widely expected, however.  Investors weren’t sure how the past few months of economic data and events would affect the rate hike outlook.  As it turned out, the Fed is more optimistic than investors anticipated.  That means they’re more willing stick with the previous rate hike outlook for 2017 and 2018, and those rate hike expectations have a direct bearing on today’s interest rates. Conventional 30yr fixed rates didn’t spike in any brutal sort of way, but given that the past 2 weeks have already seen a somewhat abrupt increase in rates, today still managed to be unpleasant.  4.0% is now the most prevalently-quoted conventional 30yr fixed rate on top tier scenarios.  It had shared the stage with 3.875% roughly equally until today.  That leaves today’s...

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Rates Steady Near Recent Highs Ahead of Fed

Mortgage rates remained unchanged today, on average.  This keeps them in line with their highest levels in more than a month, though admittedly, there hasn’t been much upward movement since the sharpest leg of the spike ended last Wednesday.  Conventional 30yr fixed rates in the “high 3’s” remain available for top tier scenarios, but 4.0% is slightly more prevalent now. While there were several economic reports and seemingly important news stories today (both tend to have an effect on rates), bond markets marched to their own beat.  Traders were generally getting in position for tomorrow’s Fed Announcement.  Two weeks ago, the order of the day had been to push rates lower heading into Hurricane Irma weekend.  There’s been a correction in play since then.  From the long-term lows in early September, traders judged a neutral, pre-Fed rate range to be right around current levels. All of the above leaves us in a position for more meaningful movement tomorrow.  The direction of the movement will be up to the Fed, or rather, to the market’s reaction to the Fed.  We know a rate hike is highly unlikely and that the start of the balance sheet reduction plan is almost a given.  With the nuts and bolts already decided, the focus will be on the Fed’s forecasts and the press conference with Fed Chair Yellen.  The festivities start at 2pm, meaning that rate...

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Mortgage Rates Continue Pushing Recent Highs

Mortgage rates resumed their recent uptrend today, after taking a quick break to end the week last Friday.  The result is another push up to the highest levels in just over 3 weeks.  The average scenario is being quoted rates that are about an eighth of a point higher compared to the lows seen in early September.  The most prevalent top-tier conventional 30yr fixed rates still range from 3.875% to 4.0%, but the latter is increasingly in the spotlight.   Context is important when it comes to this recent rate spike.  The market movement that preceded it was arguably “too good,” with rates benefiting from an unusual combination of geopolitical risk surrounding North Korea and event risk surrounding Hurricane’s Harvey and Irma.  It’s not that markets responded to those events in unexpected ways–simply that the particular confluence of events was unexpected.  In that sense, the recent rate spike simple gets us back to where we otherwise might have been, albeit in a somewhat abrupt manner. The best candidate for the “next big thing” will be the Fed Announcement coming up on Wednesday.  After moving higher over the past week and a half, rates are ready to digest the Fed’s message from a more neutral position.  Even so, it still makes more sense to stay on guard against upward pressure until and unless we see renewed momentum toward lower rates. Loan Originator...

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Mortgage Rates Stabilize Ahead of Next Week’s Big Fed Announcement

Mortgage rates were steady to slightly lower on average today, confirming the end of a somewhat abrupt correction from last week’s 2017 lows.  In other words, rates rose quickly during the first days of the week and spent the last 3 days leveling off.  To put “abrupt” in context and reiterate yesterday’s thoughts, the worst case scenario would be an eighth of a percentage point higher in rate from last week.  That’s $14/month on a $200k loan.  We’ve certainly seen worse weeks day, but only 2 of them were in 2017. The flat momentum at the end of this week isn’t too likely to stick around next week.  The Fed will (probably) make a landmark announcement that confirms the start of its balance sheet reduction efforts.  This means slightly less bond-buying each month, and could put upward pressure on rates.  Financial markets are widely expecting that, however, and the Fed has already fully mapped out its game-plan for the program.  So the bigger impact to rates would come from any updates to the Fed’s forecasts or the verbiage in the policy statement. With the most recent major development for mortgage rates being a bounce at the lowest levels of the year, it makes more sense to stay on guard against upward pressure until and unless we see renewed momentum toward lower rates. Loan Originator Perspective Another non-descript day in bond markets...

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Mortgage Rates at 3-Week Highs

Mortgage rates moved higher today, despite resilience in underlying bond markets.  If you were to ask bonds, they’d vote for rates remaining flat–well, sort of.  There is a timing issue that I brought to your attention yesterday where mortgage lenders had yet to adjust for yesterday afternoon’s bond market weakness (weaker bonds = higher rates) and were thus more likely to start today with higher rates, all other things being equal. That’s exactly what happened.  And while it does mean that rates are higher than they were yesterday, we’re actually seeing some supportive cues in bond market for the first time all week.  Specifically, bonds have held fairly steady today–something they’ve had a hard time with recently.  It’s early to say for sure, but this could be the first sign that this week’s corrective uptrend in rates is running out of steam. All told, that correction resulted in most lenders moving up an eighth of a percentage point (.125%) in rate.  The average top tier conventional 30yr fixed quote is hovering somewhere between 3.875% and 4.0%.   Loan Originator Perspective Bond markets were open today, but it was tough to tell as prices were virtually flat.  This morning’s “warm” inflation data failed to motivate sellers to the extent it typically would have.  My pricing is down slightly from yesterday’s.  Glad the losses have slowed, but not sure we’re poised for gains...

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