Author: Editor - Finance Top Stories

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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Mortgage Rates Steady to Slightly Lower After Fed

Mortgage rates were steady to slightly lower today, despite fairly substantial movement in underlying bond markets.  Bond prices ultimately do more to inform mortgage rates than anything else.  Prices moved higher today by an amount that would typically result in effective rates falling 0.03-0.05% depending on the lender.  But as it stands, the average lender is only 0.01% lower than yesterday’s latest offerings.    Given recent volatility, it’s not outside the realm of possibility that lenders are simply waiting to make sure the gains are still around tomorrow before they adjust rate sheets more aggressively.  This would fit with recent patterns of lender rate sheet movement lagging bond market movement.   As for today’s market motivation, the lion’s share of the movement happened after the Fed Announcement.  This is interesting because the announcement was very much in line with market expectations.  As such, traders could have simply been in a defensive stance and waiting to make sure the Fed didn’t make any changes that would be unfriendly for bond markets. Loan Originator Perspectives Bond markets rallied moderately following a fairly neutral Fed Statement today.  As expected, Fed did not raise their benchmark overnight rate, and mentioned inflation was below their stated 2% goal.  While this afternoon’s gains are nice, we’re still below Monday’s levels, and there’s no clear rate trend in place.  Tomorrow’s AM pricing may improve over today’s, simply because not...

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Mortgage Rates Spike, Erasing Last Week’s Gains

Mortgage rates moved abruptly higher today, erasing the improvement seen last week.  An entire week’s worth of movement may or may not be worth stressing out about depending on your perspective.  On one hand, we’re only talking about a change of roughly 0.06% in terms of the “effective rate” on the average 30yr fixed loan.  That’ll cost you about $7/month on a $200k loan.   On the other hand, last week was the best in more than 2 months.  While erasing those gains might not be dramatic in terms of outright financial impact, it could signal a shift in the overall trend.   There are 2 trends to consider at the moment.  The first only stretches back to early July, and that’s the one that’s clearly under attack.  The other trend is one of general improvement since March 2017, and we’d need to see several days like today before questioning that one. In general, we were already a little concerned that rates seemed hesitant to break below last week’s floors.  Those floors are moving targets in terms of mortgage rates, depending on the lender, but they correspond with 2.22% in terms of 10yr Treasury yields.   Tomorrow’s potential volatility is centered on the afternoon hours with a Treasury auction at 1pm and the Fed Announcement at 2pm Eastern time. Loan Originator Perspectives Bond markets crossed up usual logic and sold off...

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Rates Begin Week Unchanged at July’s Lows

Mortgage rates held steady today, which leaves them in line with the lowest levels in July.  In underlying bond markets (bond movement directly impacts lenders’ rate offerings), it was an exceptionally quiet day–especially for mortgage-related bonds.   Activity should increase somewhat as the week progresses.  That’s a typical pattern for most weeks–all other things being equal (Mondays and Fridays tend to be slower)–but we’ll also get events that tend to draw out more participation among traders.  The most obvious calendar item is the Fed Announcement on Wednesday.   Keep in mind, there are two different varieties of Fed Announcements.  Of the 8 announcements each year, 4 of them are accompanied by a press conference with the Fed Chair, as well as economic projections.  Whether by design or otherwise, those meetings with additional events have elicited the most market movement.  This week is just a plain old announcement (i.e. no additional events).  This leaves the door open for rates to react to any political headlines that come from closed-door congressional testimonies over the next few days.  An absence of drama could make it hard for rates to break below their recent floor. Loan Originator Perspectives It was a sedate Monday for bond markets today, with little motivation for rate movement.  My pricing was essentially identical with Friday’s.  The Fed meets Tuesday/Wednesday, but with no subsequent press conference, it’s unlikely they will boost...

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Mortgage Rates Lowest in July

Mortgage rates moved lower today, setting yet another new low for the month of July.  For the past 2 weeks, rates have been pushing back against a fairly abrupt spike that took place heading into the month.  Concerns over the European Central Bank’s (ECB’s) bond buying plans sparked the move higher, but those concerns were officially put to rest as of yesterday.   In simpler terms, extra demand for bonds pushes bond prices higher and rates lower.  The ECB buys LOTS of bonds.  This puts downward pressure on rates around the world (more so in Europe than in the US, but we still get some indirect benefit).  There was some concern at the end of June that the ECB was getting closer to announcing it would buy fewer bonds (thus the rate spike heading into July).  While that day will likely come eventually, yesterday’s announcement assures markets that it hasn’t been discussed yet. Today was relatively quiet for financial markets, with no significant economic data or events.  Next week brings a Fed announcement, but it isn’t expected to contain any bombshells.   Loan Originator Perspectives Bonds posted decent gains today in the absence of any economic data, and pricing is now July’s best.  Granted, this rally hasn’t moved rates dramatically, but at least the trend may now be our friend.  Next week may bring some month-end bond demand; I’m still inclined...

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