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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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

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

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 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

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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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

Mortgage Rate Lock Advice 10/4 - Rates beginning the week trending positive, but agility and quick reaction time are key

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, For those 15 or more days out, you can FLOAT to take advantage of any improvements

Long-term - FLOAT

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

Wednesday

• MBA Mortgage Weekly Application Report


• September ADP Employment Estimate

Thursday

• Weekly Jobless Claims


• August Consumer Credit

Friday

• September Employment Data


• August Wholesale Inventories

Another Up Down Week in the Market Ends with Mortgage Rates Up a Bit

For a week chock full of economic data, the trends this week generally matched those of the previous weeks. Early in the week, low numbers for consumer confidence brought rates to near record lows again for a short time, but this passed and positive news on consumer spending and unemployment numbers. For any action there is a reaction and this positive news was accompanied by a reaction that economic improvements could negatively shape Fed policy. Markets reacted with a 180-degree turn around and an easing of upward pressure on mortgage rates. While this did temper the increase, mortgage rates for Fannie Mae and Freddie Mac conforming loans did end up a slight bit.

Reposted from my blog post on The Chicago77.

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Mortgage Rate Lock Advice 9/27: A Busy Week for Economic Data Could Create 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, For those 15 or more days out, you can FLOAT to take advantage of any improvements
• Long-term - FLOAT

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

Monday

• 2-Year Treasury Auction

Tuesday

• Case/Shiller Home Price Index
• September Consumer Confidence
• 5-Year Treasury Auction

Wednesday

• MBA Mortgage Weekly Application Report
• 7-Year Treasury Auction

Thursday

• Weekly Jobless Claims

Friday

• August Personal Spending and Income Index
• University of Michigan Consumer Sentiment Index
• August Construction Spending
• September Auto and Truck Sales

Mortgage Rate Lock Advice 9/20 - Vigilance and quick reaction is key for those with applications moving through the approval process

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, but LOCK on any price improvements

Long-term - FLOAT

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

Tuesday

• August Housing Starts
• FOMC Policy Statement

Wednesday

• MBA Mortgage Weekly Application Report
• FHFA Housing Price Index Report
  

Thursday

• Weekly Jobless Claims
• August Existing Home Sales
• August Leading Market Indicators
• Annoucement of Treasury Auctions

Friday

• August Durable Goods
• August New Home Sales

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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Mortgage Rates Hit Historic Lows, But Stall on Equities Rally

Einstein once said, "Put your hand on a hot stove for a minute, and it seems like an hour. Sit with a pretty girl for an hour, and it seems like a minute. THAT'S relativity." This concept is very important to this commentary as relativity is the guiding principal from which to evaluate the rate roller coaster we saw this week. On the one hand, rates did rise about 0.125%. On the other hand, the rise was from the lowest mortgage rates in history.

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Now May Be The Time To Lock Your Mortgage Rate If You Are Less Than 15 Days Out From Close

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

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

Tuesday

• Case/Schiller 20 City Index - This will tell us a lot about the current health of the housing market
• Cosnumer Confidence Report
• Fed Minutes from 8/11 Meeting

Wednesday

• ADP Private Employement Data - This will tell us a lot about the health of employment outside of giovernement jobs
• Construction Spending Report
• Auto and Truck Sales Data - Always a good bellwether of spending

Thursday

• Weekly Jobless Claims - Very important and if negative could help rates
• Pending Home Sales - Could be an ugly number as housing has suffered in the wake of the expiration of the New Homebuyer Tax Credit

Click here if you want to know the rates for your individual situation or have a lending need

Please note that rates were trending down at the time of writing this post

Mortgage rates holding steady, but may be time to think about locking

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, FLOAT 15 - 30 days, but market is losing some steam

Long-term - FLOAT

The week ahead

• Tuesday
  
  
  
  • July Existing Home Sales Report - Will likely reinforce that market is weak


• Wednesday
  
  
  
  • Weekly Report on Applications
  
  
  • July Durable Goods Report
  
  
  • July New Home Sales Report - Will likely reinforce that market is weak
  
  
  • 5-Year Treasury Note Auction - Will help rates if demand is high


• Thursday
  
  
  
  • Weekly Jobless Claims - Very important and if negative could help rates
  
  
  • 7-Year Treasury Note Auction- Will help rates if demand is high


• Friday
  
  
  
  • August Consumer Sentiment Report

Click here if you want to know the rates for your individual situation or have a lending need

Please note that rates were trending down at the time of writing this post

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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Chicago and Oak Park Mortgage Rates Unchanged - 8/18

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, FLOAT 15 - 30 days

Long-term - FLOAT

Click here if you want to know the rates for your individual situation or have a lending need

Please note that rates were flat at the time of writing this post