FHA Mortgage Rate Predictions | This Week | March 8, 2010

Filed under Weekly Review by on March 8, 2010 at 7:46 am {no comments}

The FHA interest rate improved again last week.

Light volume and steady gains all week.  Then the better-than-expected jobs report on Friday took back much of the week’s gains.

Rates were best Thursday afternoon, but it was still the second consecutive week in which the FHA interest rate fell.

FHA Loan Rate Predictions For This Week

More .

There are not many economic reports with just and Retail Sales due out.  A status quo for rates would be great.  Any change is significantly more likely to drive rates up than push them down.

The ticking clocks for this week are two-fold and completely outside of normal mortgage rate factors:

  • The end of the Fed’s support of the mortgage bond market
  • Potential resolution on the EU / Greece bailout discussions

We’ve had almost all of $1.25T supporting for the past year.  That’s ending.  The Fed has been a buyer of epic proportion.  Rates will go up if no one else has an appetite for that many mortgage bond investments.

We’ve had a huge influx of foreign money in the past few weeks.  It’s helped push the lower and stocks higher in the same week.  That’s not normal.  That’s because felt the US was safer than anywhere else.  If the Greece issue finds resolution, expect rates to jump.

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FHA Mortgage Rate Predictions for Week of March 1, 2010

Filed under Weekly Review by on March 1, 2010 at 7:46 am {no comments}

The FHA interest rate improved last week pushed rates to their lowest levels since early February.

The economic data was negative:

Rates didn’t go as low as they could have.  Fed Chairman Ben Bernanke’s semi-annual statements to Congress eased concerns that the monetary policy would get too tight, too quick.  Stocks responded well at the end of the week as Bernanke confirmed that the will stay low for an extended period of time and this took money out of the bond market.

This Week’s FHA

Friday’s report, the “Jobs Report,” will likely be the big driver.  The expectation is that 30,000 jobs were lost in February.  A higher number will drive rates lower.  A lower number will drive the FHA loan rate higher.

We also have inflation data, notably the , and the Fed’s Beige book on tap.

The FHA look great today, but this week has some highly influential reports that could cause dramatic swings by the week’s end.

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This Week’s FHA Mortgage Rate Predictions

Filed under Weekly Review by on February 22, 2010 at 7:46 am {no comments}

Last week was brutal.  The FHA interest rate was under heavy selling pressure all week and lost ground for the second week in a row.   The primary causes were inflation figures that came in higher than expected and then two pieces of news from the Federal Reserve.

It was the single worst sell-off in any week since late last year.

The Federal Reserve played two big parts in the rates jumping.  First, the January meeting minutes from the Fed meeting revealed a significantly more optimistic Fed than we saw in the brief press release that followed the meeting.  Second, and largely unexpected, the Fed raised the Discount Rate to 0.75%.   do okay in times of economic troubles.  These statements and ensuing actions by the Fed indicate that better times, and higher , are coming.

The , and the Prime Rate, should remain the same for the near future, but the Fed clearly drew a line in the sand:  The economy is healthy enough where the loose monetary policy is coming to an end.

News for This Week’s Predictions

This is a big news week:

  • Tuesday : Case-Shiller Home Price Index,
  • Wednesday : New Home Sales
  • Thursday : FHFA Home Price Index, Initial Jobless Claims
  • Friday : Existing Home Sales, Personal Consumption Expenditures

Even after last week’s big sell-off, mortgage rates still have enough room to jump an extra .25% without very much work at all.

If you’ve been trying to perfectly time the bottom of mortgage rates, you missed it.   At this point, the best time to get an FHA mortgage is now, not later.  We still have a .5% increase to the UFMIP hitting in just 40-ish days.  No matter how you look at it, unless mortgage rates dip significantly, an approval looks to be more expensive after April 5th.

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FHA Interest Rate Predictions – Feb. 16, 2010 Edition

Filed under Weekly Review by on February 16, 2010 at 7:47 am {no comments}

ticked higher last week, although they didn’t jump as much as they could have.   It was the first time in five weeks that rates ticked higher.

Mortgage bonds had rallied so much in the past few weeks that some natural profit-taking was to blame and the Greece issue appears to have some potential rescue efforts in the works.

This week’s are back to basics:  domestic news.   The calendar is loaded starting on Wednesday.

We’ll see:

  1. Housing Starts and (Wednesday)
  2. The release of the last month’s (Wednesday)
  3. Business and figures (Thursday and Friday)

Housing starts could be soft as weather was brutal across the country last month.  Keep an eye on permits.  Weather delays a start, but builder optimism is what triggers the permit.

The FOMC Minutes are significantly more involved than the simple press release after the meeting.  Wall Street acts on what it thinks that the Fed is thinking.  That guessing game resumes when the minutes hit later this week.

Inflation could move on Thursday and Friday.  Bonds hate inflation and a hotter-than-expected reading could cause interest rates to jump.

If you know you are likely to need to lock an FHA mortgage this week, the odds favor locking before the landslide of data hits.  Rates have a little room to go lower and a lot of room to go higher.

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2010 FHA Mortgage Rate Predictions? Try Guesses.

Filed under Weekly Review by on February 8, 2010 at 7:46 am {no comments}

All bets are off.  There are some things that “always” increase rates.  Last week, we saw strong corporate earnings, housing appears stable, and the Federal Reserve continues their upbeat tone.

Those things all cause rates to go up.  Yet, the FHA interest rate dipped for a 4th consecutive week.

Why?  Because every other economy in the globe appears worse off than ours right now.  Bad news kept filtering in, starting with the the week prior, China tightened its money supply, and pick an EU country, it’s in trouble.

The FHA loan rate is strongly tied to where global investors wish to park their money.  For the past two weeks, the U.S. has seemed much safer than anywhere else.  When investors park their money here, our go down.

Looking forward to this week’s , there is almost no economic data.  If deem the U.S. safer than elsewhere, FHA rates stay low.  If think someone else offers a risk/reward they like, the sound will be their money sucking out of the bond market and the consequence will be a significant jump in mortgage rates.

If you are currently considering whether to lock or float a laon, the trend continues to point towards higher rates down the road.

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FHA Mortgage Rate Predictions: February 1, 2010

Filed under Weekly Review by on February 1, 2010 at 7:46 am {no comments}

improved in spite of quite a bit of good economic news last week.  FHA continued a three-week trend towards lower rates.

Any or all of these three things should have pushed rates higher:

  1. The Federal Reserve said the economy continues to strengthen
  2. pushed to a 2-year high
  3. 4th Quarter domestic output exceeded Wall Street’s expectations

What kept rates down was a report from Standard & Poor’s that said U.K. banks are no longer counted among the world’s most stable.  This triggered investors to move money into the US Dollar and helped prop up the mortgage bond market.

This week is loaded with data as well.  Monday is inflation day.  Wednesday is the , and Friday is the government’s Non-Farm Payroll data.

The biggest predictor of this week will be Friday’s report.  If the jobs data is better than expected, rates will jump.  If the report reveals weakness, rates might inch lower.

We stand a much greater chance of seeing higher rather than lower rates at the end of the week.

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FHA Mortgage Rate Predictions: January 19, 2010

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

Inflation squeezes mortgage ratesMortgage markets traded in a narrow channel last week.  There was very little data and wasn’t much in general.

For rate shoppers, the momentum proved favorable for the second straight week.

There again isn’t much data this week.  The biggest report of the week will likely be the Producer Price Index set for Wednesday.

The Producer Price Index is essentially the business equivalent of the Consumer Price Index.  The logic is that inflation at the business level will eventually cycle to the consumer.  If there is one thing that guarantees higher , it’s inflation.

Should inflation come in hotter than expected, mortgage rates will rise the week.  Should inflation come in softer than expected, mortgage rates will improve this week.

Other influential data this week includes Housing Starts, and Initial Jobless Claims.

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