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, Greece 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 safe haven 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, Wall Street 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.

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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 FHA interest rates clawed back in a rather surprising rate rally.

There wasn’t much economic data, but Greece 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.

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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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