Practical Thinking for the New Mortgage Rate Environment

If you have not been considering a real estate transaction recently, this may come as news to you, but the price for mortgages is on the rise. The question, however, most often posed by borrowers in these volatile times is whether the salad days of the sub-4.5% mortgage rates are well behind us.

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Jobs Data Happy Tune for Economy, but Funeral Dirge for Low Mortgage Rates

The word of the week is jobs. For months, we have heard economists near and far assure us that as go jobs so goes the economy. After all, to buy goods and pay their mortgages, consumers need a steady and predictable source of income, i.e. a job. Now after painful year of anemic employment, it appears that we may finally seeing a sustained turn around in the jobs sector.

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Update to article:

Well, this time we ate the bear. The government jobs report, which came in mixed, is generally accepted as a disappointment. While overall unemployment did drop, the number of jobs created did missed expectations. The end result is a reprieve for those squarely on the fence on what to do and those in the process of buying a property who have not locked a final rate. I want to stress that this should not by any means lull anyone into a false sense of security. Think of it as a shuttle launch that has been delayed due to technical issues. Like the shuttle, the rate rocket will, at some point launch, but not today.

Mortgage Rates Spike on Bullish Equities Market

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term - LOCK if closing in 7 or fewer days. If closing in 7 to 15 days, cautiously FLOAT with a finger on the trigger.

Long-term - FLOAT with vigilance.

The week ahead for economic data that can affect mortgage interest rates

Tuesday

• November Factory Orders


• FOMC Minutes from December 15th Meeting


• December Car and Truck Sales

Wednesday

• ADP Private Jobs Report


• MBA Weekly Mortgage Applications


• December ISM Services Sector Index

Thursday

• Weekly Jobless Claims

Friday

• December Non-Farm Employment


• November Consumer Credit

Mortgage market bearish in face of Chinese rate hike

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

• Short-term - LOCK if closing in 15 or fewer days.
• Long-term - FLOAT with extreme caution.

The week ahead for economic data that can affect mortgage interest rates

Monday

• $35 Billion 2-year Treasury Auction

Tuesday

• Case-Schiller October Home Price Index
• December Consumer Confidence
• $35 Billion 5-year Treasury Auction

Wednesday

• $29 Billion 7-year Treasury Auction

Thursday

• Weekly Jobless Claims
• Chicago Purchasing Managers Index
• November Pending Home Sales

Mortgage rates improve at start of short trading week

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term - LOCK if closing in 7 or fewer days. FLOAT with extreme caution if closing between 7 and 15 days.

Long-term - FLOAT, but LOCK on ANY price improvements as window for securing best rates will be small and fleeting.

The week ahead for economic data that can affect mortgage interest rates

Wednesday

• Q3 GDP
• November Existing Home Sales
• FHFA October Home Price Index

Thursday

• Weekly Jobless Claims
• November Personal Income and Spending
• November Durable Goods Orders
• University of Michigan Consumer Sentiment Index
• November New Home Sales

Rates flirt with 5%

This week in mortgage interest rates could have been worse. While we started with another upward climb, rates for Fannie Mae and Freddie Mac mortgages retreated a bit by Thursday. Based on the extreme pain of the last 30 or so days, this was jump up and kick your heels together news.

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Rates Begin Week Positively As Market Corrects

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term (No Change) - LOCK

Long-term - (No Change) LOCK on ANY price improvements as windows for improvement will be small and fleeting.

The week ahead for economic data that can affect mortgage interest rates

Tuesday

• November PPI
• November Retail Sales
• October Inventories
• FOMC Policy Statement

Wednesday

• Weekly MBA Mortgage Applications
• November CPI
• December NY Manufacturing Index
• November Industrial Production
• November Capacity Utilization
• December NAHB Housing Market Index

Thursday

• Weekly Jobless Claims
• November Housing Starts
• November Building Permits
• December Philadelphia Fed Business Index

Friday

• November Leading Market Indicators

Mortgage Rates Skyrocket on Tax Cut Compromise

This week was bad for rates, really bad. If you are not in the industry, it is impossible to describe what happens when you see rate increases like we saw this week, so I will once again defer to history to illustrate what occurred.

"It's fire and it's crashing! It's crashing terrible! Oh, my! Get out of the way, please! It's burning, bursting into flames and is falling on the mooring mast, and all the folks agree that this is terrible. This is the worst of the worst catastrophes in the world! Oh, it's crashing...oh, four or five hundred feet into the sky, and it's a terrific crash, ladies and gentlemen. There's smoke, and there's flames, now, and the frame is crashing to the ground, not quite to the mooring mast...Oh, the humanity" (See the actual event.)

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Mortgage rates begin week flat as bond market corrects from oversold levels

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term (No Change) - At any point less than 15 days, I would LOCK. More than 15 days, I would recommend LOCKING unless your risk tolerance permits calmness in the face of severe volatility. In this case, I would FLOAT and LOCK an ANY gains.

Long-term - (No Change) LOCK on ANY price improvements as windows for improvement will be small and fleeting.

The week ahead for economic data that can affect mortgage interest rates

Tuesday

• $32 Billion 3 Year Treasury Auction
• October Consumer Credit

Wednesday

• Weekly MBA Mortgage Applications
• $21 Billion 10 Year Treasury Auction

Thursday

• Weekly Jobless Claims
• October Wholesale Inventories
• $13 Billion 30 Year Treasury Auction

Friday

• October Trade Balance
• November Import and Export Prices
• University of Michigan Mid-Month Consumer Sentiment Report
• November Treasury Budget

This week, I do believe that a little levity is in order. So, without further ado:

A large passenger train was crossing the country. After they had gone some distance, one of the two engines broke down.

“No problem,” the engineer thought and carried on at half power. Farther on down the line, the other engine broke down and the train came to a standstill.

The engineer decided he should inform the passengers about why the train had stopped, and made the following announcement, “Ladies and gentlemen, I have some good news and some bad news. The bad news is that both engines have failed, and we will be stuck here for some time. The good news is that you’re not in an airplane.”

As you can likely guess, the bond market is the train and the engines driving the low rates have definitely broken down.

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Please note that after this article was posted, employment data was released and the results greatly disappointed. Rates, however, have not reacted favorably as we would generally expect.

Rate watchers begin the week focused on Korea and EU

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term - At any point less than 15 days, I would LOCK. More than 15 days, I would recommend LOCKING unless your risk tolerance permits calmness in the face of severe volatility. In this case, I would FLOAT and LOCK an ANY gains.

Long-term - LOCK on ANY price improvements as windows for improvement will be small and fleeting.

The week ahead for economic data that can affect mortgage interest rates

Tuesday

• Case/Schiller 20 City Home Price Index
• Chicago Purchasing Manager's Index

Wednesday

• Weekly MBA Mortgage Applications
• ADP Employment Data
• Q3 Productivity
• Q3 Labor Unit Costs
• November ISM Manufacturing Index
• November Auto and Truck Sales
• Fed's Beige Book (Report on the economy)

Thursday

• Weekly Jobless Claims
• October Pending Home Sales

Friday

• November Employment Data
• November ISM Service Sector Index

Rates Begin Week Dismally But Possible Respite In Future As Bond Market Nears Oversold Level

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term - LOCK if less than 7 days out. If your risk tolerance permits, I would FLOAT in 7 - 15 day range with your lender on speed dial to lock on improvement

Long-term - FLOAT as market is oversold

The week ahead for economic data that can affect mortgage interest rates

Monday

• October Retail Sales
• September Business Inventories

Tuesday

• October PPI
• October Industrial Production
• October Capacity Utilization
• NAHB Housing Index

Wednesday

• MBA Mortgage Applications Report
• October CPI
• October Housing Starts

Thursday

• Weekly Jobless Claims
• October Economic Indicators Report

Hooked on Some Easing

Since this week was much like the last few, I figured that would spice things up with a musical interlude. Because I cannot sing well enough to do this justice, I would ask that you use some good imagination.

Hooked on Some Easing
(Sung to Hooked on a Feeling)

See the song and read more

Bumpy Week Ahead For Mortgage Rates

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term - LOCK if less than 7 days out from closing, but if between 7 and 15 days FLOATING makes sense, but remember that pigs get fat and hogs get slaughtered. If you are too greedy, it may cost you.

Long-term - FLOAT

The week ahead for economic data that can affect mortgage interest rates

Tuesday

• September Wholesale Inventories
• $25 B 10 Year Treasury Auction

Wednesday

• MBA Mortgage Applications Report
• Weekly Jobless Claims
• $16 B 30 Year Treasury Auction

Friday

• University of Michigan Mid Month Consumer Sentiment

Rates End The Week Lower As Market Digests FOMC Announcement

The past week was an exciting one. First, there were the mid-term elections with all of the drama of a Mexican soap opera and the negativity of homeless curmudgeon yelling at you on an El platform. This, however, paled in comparison to the much anticipated announcement of QE or quantitative easing by the FOMC.

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Mortgage Rate Lock Advice 11/1 - Rates open weak, but hope for favorable Fed policy could bring lower rates and lock opportunity

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term - LOCK if less than 7 days out from closing, but if between 7 and 15 days FLOATING makes sense as there will likely be some pricing improvement by the end of the week.

Long-term - FLOAT

The week ahead for economic data that can affect mortgage interest rates

Wednesday

• MBA Mortgage Applications Report



• FOMC Policy Statement - This is extremely important as there will likely be information on their plan for Quantitative Easing

Thursday

• Weekly Jobless Claims

Friday

• October Unemployment Report

Mortgage Rate Lock Advice 10/25 - Opportunity for rate watchers as this week's pricing opens favorably

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term - LOCK if less than 7 days out from closing, but if between 7 and 15 days FLOATING with a cautionary monitoring of the markets could pay off.

Long-term - FLOAT

The week ahead for economic data that can affect mortgage interest rates

Tuesday

• Case/Schiller 20 City Home Price Index
• October Consumer Confidence Index
• $35 Billion 2 Year Treasury Auction

Wednesday

• MBA Mortgage Applications Report
• September Durable Goods
• September New Home Sales
• $35 Billion 5 Year Treasury Auction

Thursday

• Weekly Jobless Claims
• $29 Billion 7 Year Treasury Auction

Friday

• 3Q Advance GDP
• October Purchasing Managers Index
• $29 Billion 7 Year Treasury Auction
• University of Michigan Consumer Sentiment Index

Bank of America Concerns Drive Mortgage Rates Down, But Promising Housing Starts and Encouraging Earnings Reports Shorten The Rate Rally

As I began writing this week’s commentary, I realized I had exhausted my analogies for the ebb and flow of rates we have seen over the past months. That is until I thought back over the years to my Junior Year at West Point standing in a platform above a Long Island night spot with a bungee cord tied to my ankles preparing for the plunge. Then I remembered the jump into the void and the plummet to the bottom of my descent. As soon as I reached that point, I was pulled back violently into the air as the elastic reached its limit. Propelled to a new high-point, I again dropped. Up and down I went for several iterations with gravity and the bungee cords sending me up and down. This, more than anything I have written, describes our current volatile environment with competing forces pulling rates violently to and fro.

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Mortgage Rate Lock Advice 10/18 - Small Dip In Rates Marks Early Opportunity For Rate Shoppers

Are you currently in the process of buying a home or refinancing in Chicago or vicinity? Trying to decide when to lock can be a stressful and difficult decision. In my job as a mortgage lender, I watch the markets daily to keep my clients abreast of changes to assist them in securing the best mortgage rate possible. Please see my recommendations below.

Short-term - LOCK, As the recent gains are too good not to take advantage of

Long-term - FLOAT

The week ahead for economic data that can affect mortgage interest rates

Tuesday

• September Housing Starts

Wednesday

• MBA Mortgage Applications Report

Thursday

• Weekly Jobless Claims

Costs for Mortgages Rise Mildly Possibly Signaling End of Record Lows

The cost of mortgages took a minor beating this week after several days of favorable movement. You will notice that I refer to cost as opposed to rate. This is because rates moved little if at all, but rather the points required to secure the best rates increased and available surplus to credit back to clients to structure “no cost” loans decreased. In short, it cost more to get the same rate you could a week ago, but the rate was still very available.

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