FHA Interest Rates: Predictions week of May 17, 2010

Filed under Weekly Review by on May 17, 2010 at 7:53 am {no comments}

CPI could move FHA interest rates improved again last week.  That’s three weeks in a row.  That’s back to 2010 lows.  That’s back to the levels we saw in February and March right before they jumped.

We start this week with nearly all FHA borrowers looking at sub-5% rates, no points.

If you are seeing any of the following, click the chat button, we can help:

  • 5% or higher rates
  • Points
  • Lender costs over $1,000

The FHA loan rate has been helped, significantly, by the mess in and Europe.  Investors everywhere have pulled money out of the and plugged it into our markets.  More foreign money = lower .

That’s good.  But that could end at any moment.  That’s risk #1.

Risk #2 to this week is the economic calendar.  It is loaded.

  • Housing:  Home Builder Housing Market Index, Building Permits, Housing Starts
  • Inflation:  &

Oh, and it is also the week of the release of the Fed minutes from the April meeting.  That’s always a market mover and happens in addition to some other highly influential reports.

have been here before.  Never in history have they stayed here for long.  If you’re undecided whether to lock or float, you stand to gain very little by waiting, but could lose .5% in the blink of an eye.

Tags: , , , ,

What’s Ahead For Mortgage Rates This Week : May 10, 2010

Filed under Weekly Review by on May 10, 2010 at 7:49 am {no comments}

Non-Farm Payrolls May 2008-April 2010Mortgage markets improved to their best levels of 2010 last week, aided by events half a world away and ongoing buying.  ’s debt problems continue to help mortgage rate shoppers in Oak Park and around the country.

Conventional dropped last week, ARMs falling more than fixed. also improved.

Global concern for the Greece Situation are so strong that markets even shrugged off April’s blowout job report. On most other days, mortgage rates would soar on better-than-expected jobs data — especially coming out of a recession.

The Department of Labor’s April Non-Farm Payrolls reports:

  • Payrolls have been net positive for 4 straight months
  • Nearly 600,000 jobs have been created thus far in 2010
  • Monthly job growth posted its biggest gain in 4 years in April

Additionally, more than 800,000 Americans re-entered the workforce in April in search of work.  As a result, the Unemployment Rate jumped by 0.2 percent — another positive sign (in a roundabout way).

But again, wasn’t watching jobs — was watching Greece. And Greece was in riot.

This week, without much new data due on the economy, mortgage markets should continue to take cues from Greece, the IMF and the .  If a bailout agreement can be reached that investors feel is effective, the safe haven buying that’s led rates lower will recede and mortgage rates should rise.

Conversely, if an agreement is reached that investors deem ineffective, or no agreement is reached at all, mortgage rates should drop.

Each week for the last four weeks, we’ve talked about Greece and its pending bailout and how it might impact rates because each week the bailout appears imminent.  Even this week, the market opens with the news that the IMF has approved a $40 billion lifeline to Greece.  Maybe this will be the news that finally turns the mortgage market around.

Mortgage rates are unnaturally low right now and should change direction quickly. The problem is nobody knows when that will happen so be careful when rate shopping and keep an eye on the market.

Mortgage rates may fall further, but when they turn higher, they’re going to turn quickly.

Tags: , ,

What’s Ahead For Mortgage Rates This Week : May 3, 2010

Filed under Weekly Review by on May 3, 2010 at 7:47 am {no comments}

Net Job Gains April 2008-March 2010Mortgage markets improved last week on tame inflation data, a benign statement from the Federal Reserve, and ongoing credit problems in .

The factors combined to drop conforming in Chicago to their lowest levels in 6 weeks.

It’s an unexpected development considering that mortgage rates were supposed to rise post March 31, 2010.  That was the day the Fed’s support for mortgage markets ended.

Since then, however, a month-long string of devastating economic and meteorological events within the sparked a global flight-to-quality that benefited “safe” assets such as mortgage bonds.

May 2010 may not be so kind.

The week starts with news that Greece reached a $147 billion bailout agreement with the IMF Sunday. This is a plus for the Eurozone and mortgage market negative. Rates should rise on the bailout.

Also on Monday, the government releases Personal Consumptions and Expenditures data. 

PCE is the Fed’s preferred inflation gauge and it’s expected to show an annual read of 1.3 percent. Anything higher and rates should rise.

Then, for the rest of the week, employment data takes center stage.

  • Wednesday : ADP releases its private sector employment data
  • Thursday : The government releases initial jobless claims
  • Friday : The government releases April’s job report

Jobs are key to the U.S. economic recovery, tied to consumer spending, , and mortgage delinquencies.  If job growth is better than expected, mortgage rates should rise.  If job growth is worse, rates should fall.

There’s no “best day” to lock this week so keep an eye on the market.  However, if rates in Illinois rise as quickly in May as they fell in April, you won’t have much time to act.

Tags:

FHA Interest Rate Predictions: Week of April 26, 2010

Filed under Weekly Review by on April 26, 2010 at 7:47 am {no comments}

Mortgage markets worsened last week in see-saw trading. By the time Friday’s market closed,  had moved higher.

The biggest stories of last week were actually non-stories.

First, the ash cloud from Iceland’s Eyjafjallajökull volcano dissipated, allowing warehouses to move inventory, airlines to move people, and businesses to move product.  In addition, moved closer to securing emergency funding that will help it stave off default.

When these two issues were threats earlier in the month, mortgage bonds rallied on buying, driving rates down. As the threats lessened over the course of last week, however, mortgage bonds sold off and rose.

By contrast, this week features lots of stories. Economic data will be at the forefront, as will the Federal Reserve which meets for one of its 8 scheduled meetings of the year.

  • Monday : Greece is expected to announce an aid package
  • Tuesday : reports on home values from February
  • Wednesday : Fed adjourns from its 2-day meeting
  • Thursday : Initial Unemployment Claims are released
  • Friday : GDP and numbers are released

Furthermore, will have its eye on the Senate’s questioning of key employees in the wake of the SEC’s fraud charge.

In general, news that’s “good” for the U.S. economy will be bad for mortgage rates, and vice verse.  And with mortgage rates changing as quickly as they have been, rates could really rise in a hurry.

The best defense against rising mortgage rates is to execute a rate lock. If you’re nervous about rates moving higher, call your loan officer and execute your rate lock today.

Tags: , , , , , ,

FHA Interest Rate Predictions: Week of April 19, 2010

Filed under Weekly Review by on April 19, 2010 at 7:47 am {no comments}

The FHA loan rate approached its best levels since March on last week’s rally.

That marks two weeks in a row with considerable improvement and two weeks in a row where rates dropped due to “” buying.

Safe haven buying, which we’ve been covering a lot, is when investors sense market risk and move their money towards less risky investments.  Since and mortgage bonds are backed by the U.S. government, they are inherently less risky investments.

When uncertainty prevails in the markets, foreign or domestic, a outcome is that the will dip lower.  Last week had uncertainty, both foreign and domestic.

Early in the week, virtually all air travel in and out of Europe was grounded as Iceland’s volcanoes spewed ash into the air.   Since plane engines don’t fare that well when covered in ash, it grounded planes.  Planes aren’t just for vacations.  Goods, especially perishables, are stuck in warehouses around the globe unable to reach a market.

Domestically, we had “a little bit” of news as well.  Friday, the SEC announced fraud charges against Goldman Sachs.  This sent into a tailspin on Friday and the move from stocks to bonds pushed rates lower again.

This Week’s FHA

We have a very light economic calendar this week and the news doesn’t look to be the biggest element moving rates.  On tap for Thursday we have:

  1. Initial Jobless Claims : Important vis-a-vis broader employment figures. A strong number could push rates up.
  2. Existing Home Sales : Housing remains a key part of the economy. Strong sales are expected because of the tax credit.
  3. Producer Price Index : A “Cost of Living” index of business. A weak reading is expected because inflation is low.

The bigger risk to the FHA loan rate this week is a reversal of this trend of safe haven buying.  It is what has pushed rates down over the past 10-day rally.  When it reverses, so too will .

If you’re evaluating a lock or float decision, rates have significantly more room to go higher rather than lower.

Tags: , , , , , ,

FHA Interest Rate Predictions – Week of April 12, 2010

Filed under Weekly Review by on April 12, 2010 at 7:47 am {no comments}

The Fed wrapped up its $1.25T mortgage bond purchase program at the end of March and had an absolutely miserable week to end March.

Last week, the trend reversed and mortgage bonds made up two-thirds of the prior week’s losses.  Both conventional and clawed back in a rather surprising rate rally.

There wasn’t much economic data, but stepped in and filled the news.  If you haven’t been following this story, it’s worth it.  The Greek Parliament makes the US Congress seem not as childish.

Faced with a mountain of debt and a series of awful policy decisions, Greece has been spending much of their time complaining about how the rest of the EU is nagging them.

Yeah, that will happen when you lie about your budget and sell your sovereign debt throughout the .  The uncertainty overseas brought investor money into the US pushing the lower in spite of a flood of reports that revealed a US economy that continues to get stronger.

FHA – This Week

Loaded domestic calendar + continued Greek mess = .

Wednesday to Friday includes , Retail Sales, and Housing Starts.

Continued economic strength should mean higher rates.   Resolution in Greece should mean higher rates.

If both occur at the same time, watch out.  Rates have a lot of room to jump higher and not much room to move lower.

This week, locking in before Wednesday may be your safest, near-term rate locking strategy.

Tags: , , , , , , ,

FHA Interest Rate Predictions: This Week, April 5, 2010

Filed under Weekly Review by on April 5, 2010 at 7:47 am {no comments}

took one on the chin again last week.  That’s two in a row and last week was bad each trading session, although there weren’t many surprises.

Hot economic data, a holiday-shortened week, and the end of the $1.25T Federal Reserve purchase program all contributed.

The FHA interest rate hit its highest levels since late-December.

Jobs move economies.  They also move .  Last week, the economy saw some very positive news related to jobs and lost a bit:

  1. “Temporary Employment” — a leading jobs indicator — is up 313,000 in the last 6 months
  2. The average work-week and factory overtime both rose in March — a sign that hiring should increase soon

FHA Loan Rate Predictions – This Week

This could be another crazy week.

First, the Fed is in an emergency meeting today to review the Discount Rate policy.  The market is on edge waiting for results.

Second, we’re in a really odd spot and patterns could take over mortgage rate direction for a few days and the influence on the FHA loan rate could be staggering.

Unlike fundamental trading in which markets move on data and projections, technical trading is how markets move based on patterns over time. The two methods co-exist on but, occasionally, technical forces can be pronounced, leading markets to lurch up or down.  This week may be one of those times.

Mortgage pricing is far below its 200-day moving average, resting slightly north of a key support level. If pricing worsens this week and bonds fall below the support level, mortgage rates could easily tack on quarter-percents or more per day until the market refinds its balance.

Overall, it’s a week you don’t want your rate to be floating.   Sure, rates could improve, but there’s a lot more room for them to worsen.

Tags: , , , ,

FHA Interest Rate Predictions | Week of March 29

Filed under Weekly Review by on March 29, 2010 at 7:47 am {no comments}

Mortgage markets tanked last week and the FHA interest rate saw its highest levels in a month.  Wednesday was the bad day and saw the worst sell-off in over six months.

The major concerns are tied to the current mess in the EU and worries of how our federal debt will impact rates.  The best time to lock a conventional or last week was Tuesday morning.

Predictions for This Week

This week, markets should remain volatile. There’s a large set of economic data due for release, plus trading volume will thin as the week goes on because markets are closed Friday for Good Friday.

Coincidentally, Friday is also the day that the March jobs report is released.  Growth is forecasted for this report, a net gain of 187,000 in March.  This is a large number as compared to last month’s net loss of 36,000 job. However, analysts are already dismissing March’s numbers as skewed by both the bad storms of February, and the temporary hiring of Census workers.

In most months, major job growth would be bad for .  This month, that won’t be the case. It will take a figure north of 200,000 to cause rates to rise and the higher the actual number, the more that rates will respond.

Also this week, on Wednesday, the Federal Reserve’s $1.25 trillion program to support mortgage markets sunsets. Fed insiders estimate that the program dropped rates 1 percent since its inception in 2008. It’s reasonable that FHA mortgage rates will rise after its end.

Tags: , , , ,

FHA Mortgage Rate Predictions | This Week | March 22, 2010

Filed under Weekly Review by on March 22, 2010 at 7:47 am {no comments}

closed the week relatively unchanged last week, but it was anything but a steady week.  Rates improved Monday, Tuesday and Wednesday and then sold off Thursday and Friday.

These rates continue to confound the experts.  No one forecast this 5% range to have held steady for this long.  Thursday and Friday’s sell-off might be indicative of the speed at which rates will go up–and they will eventually go back up.

Last week’s big story was the Fed meeting.  Synopsis:  unchanged, likely to stay low for a while, and things are improving.  Notably, we have improvements in the credit markets, businesses are spending, and the recession is behind us.

That’s not to say the economy is completely fixed. There are still looming threats that could slice into consumer spending and slow down this recovery.

FHA

This week, we are watching two things.  The Fed’s $1.25 trillion mortgage buyback program ends at the end of the month.  All indications are that rates will rise.  The Fed’s estimates are that the program lowered rates by about 1%.  The question is how quickly the market will absorb that 1% back in the form of higher .

We’re also watching the news:

  1. The Existing Home Sales data for February is released Tuesday, along with the Home Price Index
  2. The New Home Sales data for February is released Wednesday
  3. data hits Friday

Strength in any — or all three — of these reports should put pressure on mortgage rates to rise.

Add one more wildcard:  Kansas Fed President Hoenig’s scheduled speech Wednesday morning. Hoenig was the lone dissenting vote at the Fed meeting–Hoenig voted to raise rates.  Normally, Fed members stay on topic in public appearances, but it wouldn’t be unprecedented for a Fed President to speak his or her mind.

His words could lead to rethink its position on the mortgage bond market and that could cause rates to spike Wednesday afternoon.

Mortgage rates remain volatile and are still relatively low. If you’re unsure of whether now is a good time to lock in, consider that there’s a lot more room for rates to rise than to fall right now. Especially with momentum shifting for the worse.

Tags: , ,

FHA Mortgage Rate Predictions | This Week | March 15, 2010

Filed under Weekly Review by on March 15, 2010 at 7:47 am {no comments}

The FHA interest rate lost ground last week for the first time in March.  It’s been a very good run for and they are currently lower than any of the experts were predicting.  The FHA loan rate is going to start the week at or below 5%.

Last week was very light on economic data.  This week is the exact opposite.

FHA Loan Rate Predictions | This Week

Expect .  Here is just the economic data on tap:

  • Monday : Industrial Production and Home Builder Index
  • Tuesday : Housing Starts and Building Permits
  • Wednesday:
  • Thursday : Producer Price Index and Initial Jobless Claims
  • Friday : and Continuing Jobless Claims

Beyond that, we have the meeting on Tuesday.

We don’t expect changes to the , but the post-meeting press release is nearly always the start of a volatile afternoon.  Talk of economic strength will push up stocks and drive mortgage rates higher.  Talk of economic weakness will push stocks lower and typically pull loan rates a bit lower as well.  The issue is that there is a lot of room for rates to go up and not a lot of room for them to go lower.

Tags: , , , , ,
Page 4 of 5«12345»