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

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.

Mortgage Rates Open Flat on a 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 - 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 - FLOAT, but look to LOCK on any gains.

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

Monday

• $25 Billion 2-Year Treasury Auction

Tuesday

• October Existing Home Sales
• $35 Billion 5-year Treasury Auction
• 11/3 FOMC Meeting Minutes

Wednesday

• October Personal Income and Spending Report
• October Durable Good Report
• Weekly Jobless Claims
• University of Michigan Consumer Sentiment Index
• October New Home Sales
• $25 Billion 7-year Treasury Auction

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

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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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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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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Mortgage Rate Lock Advice 10/12 - Rates begin the week strong, but the wise borrower should lock in now to exploit recent gains

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

• 3 Year Treasury Auction
• Release of notes from 9/21 FOMC meeting

Wednesday

• 10 Year Treasury Auction
• MBA Mortgage Applications Report
• September Import/Export Pricing Report

Thursday

• 30 Year Treasury Auction
• Weekly Jobless Claims

Friday

• September Consumer Price Index
• September Retail Sales Report
• University of Michigan/Reuters Consumer Sentiment Index
• August Business Inventories

Borrowers Rush to Lock Mortgage Rates Over Concerns Bottom Has Passed

This was a hectic week for mortgages, but not necessarily in the rate category. Rates once again skipped along the recent mean but generally ended the week flat. The action was actually on the lender side as demand for Fannie Mae and Freddie Mac refinance loans increased to a fever pitch as borrowers acted to secure the lowest possible rates.

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Rate Lock Advice 9/13 - Timing is Key to Securing Best Rate

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

Long-term - FLOAT, but if 15 - 30 days out I do recommend considering a LOCK on any rallies in the bond market.

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

Tuesday

August Retail Sales Report

July Business Inventories

Wednesday

August Industrial Production

Thursday

Weekly Jobless Claims

August Producer Price Index

Friday

August Consumer Price Index

University of Michigan/Reuters Consumer Sentiment Report

Another See-Saw Week in Mortgage Rates

Since last week’s use of Einstein’s quote was so well received, I thought it appropriate to begin this week’s commentary with a quote from the venerable Yogi Berra. Yogi remarked after seeing back-to-back home runs by Mickey Mantle and Roger Maris that it was “déjà vous all over again.” Such was the week in rates, with a drop followed by a return to the mean of the last month.

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Mortgage Rates Up For First Time In Weeks

Well folks, we may have hit the bottom, at least in the short-term that is. Rates ticked a bit lower than last week Monday and Tuesday, but began a mild movement upward by the middle of the week. This slight change was likely less the result of economic factors than the deluge of applications overwhelming lenders. To understand this, you need to understand that lenders can and do sometimes raise rates independent of the equities and bond markets as the meet their production capacity. This market favors mortgage banks as they can take advantage small variations in market pricing offered by different investors to whom they sell to secure you the best rate. That said borrowers currently should worry less about rate and more about execution.

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