Bouncing off the Ceiling – The Conflict Between Poor Economic Data and Record-Low Rates
September 2, 2010 by Dan Hartman · Leave a Comment
The bottom line is, rates aren’t improving this week, not because economic data doesn’t support it, but because they can’t. When a 7-10 year investment yields between 2.5-4%, many investors will question the point of making such an investment, and will often look to other-higher yielding options. Corporate bonds may be quite attractive right now due to their higher yields and the strong profit figures many corporations are returning. Mortgage and Treasury rates are so low that only continued poor economic results can keep them there.
Personal Spending Up, Consumer Confidence Surges, But is Case-Schiller Home Price Index Relevant? – Daily Mortgage Rate Update for August 31st, 2010
August 31, 2010 by Dan Hartman · Leave a Comment
Mortgage pricing has swung wildly over the past 3 days. Initially, it appeared that Friday’s activity was a reaction to Fed Chairman Bernanke’s comments at the Jackson Hole Conference, however, yesterday’s almost complete rebound on almost no news brought question to that. Mortgage pricing today is again at an all time high, and may struggle to move any higher, leading to record low rates. I suspect that last week’s Freddie Mac survey rate of 4.36% may be bested once again this Thursday.
GDP Growth Revised Down; New Record Low Mortgage Rate: 4.36% – Daily Mortgage Rate Update for August 27th, 2010
August 27, 2010 by Dan Hartman · 1 Comment
The Commerce Department announced the first revision of its 2nd quarter GDP results, lowering its earlier estimate for growth to 1.6% from the advanced estimate of 2.4%. This lower revision was still higher than analysts had expected; they had called for a revision down to 1.4%. Many had expected the downward revision after a large number of disappointing economic reports recently.
Jobless Claims Dip, But How Low is Too Low a Rate? – Daily Mortgage Rate Update for August 26th, 2010
August 26, 2010 by Dan Hartman · 1 Comment
Today’s employment data is significant, as it highlights the job market that will come under intense focus next week. Remember that the first Friday of each month brings the monthly employment situation report from the Bureau of Labor Statistics, commonly known as the jobs report. Next week’s report should be even more influential than others recently, as it will be free of distortion that has been caused by the recent hiring and subsequent layoff of almost 500,000 temporary census workers.
Global Economic Weakness Comes Home; Existing Home Sales Tumble – Daily Mortgage Rate Update for August 24th, 2010
August 24, 2010 by Dan Hartman · Leave a Comment
The National Association of Realtors reported on existing home sales in July this morning, and the results were dismal. Home sales declined at a year-over-year pace of 27.2%, falling to a pace of 3.83 million units per year. While this information sounds very bad, bear in mind that the figures reported by NAR annualize a single month’s results. The housing sector has been viewed as the destroyer of the economy, and is widely seen as the sector that will lead the economy back to normalcy in the future.
Mortgage Pricing Jumps on Weak Manufacturing Data – Daily Mortgage Rate Update for August 20th, 2010
August 20, 2010 by Dan Hartman · Leave a Comment
Lenders that have tightened their pricing have been able to keep wait times somewhat more controlled. Those I reviewed appear to be closer to 3 days for purchase mortgage underwrites and 8 days for refinances. They are, however, less competitive with market pricing.
Lack of Data, Stocks, Pressure Mortgage Rates – Daily Mortgage Rate Update for August 19th, 2010
August 19, 2010 by Dan Hartman · 1 Comment
When rates have declined as much as they have recently, there is a lot of pressure for them to bounce back up a little. In a week devoid of meaningful data like this one, it isn’t surprising we’re seeing a bit of weakness in mortgage pricing.
Questions About Future of Fannie, Freddie, Rise in Industrial Production Pressure Mortgage Pricing – Daily Mortgage Rate Update for August 18th, 2010
August 18, 2010 by Dan Hartman · Leave a Comment
First, remember that mortgage pricing hit an all-time best last week after the Fed announced it would further involve itself in the financial markets. Sprinkle into this some questions about the future of Fannie Mae and Freddie Mac (Barnie Frank says they should be abolished, which would seriously hurt the value of their Mortgage-Backed Securities), add the slightest hint of inflation, and some good news about industrial production, and voila! Instant decline in mortgage pricing.
Weak Japanese Economy Sparks Flight to Safety; China Now #2 – Daily Mortgage Rate Upate for August 17th, 2010
August 17, 2010 by Dan Hartman · 2 Comments
Data this morning showed some growth in construction of new homes, with a 1.7% increase in housing starts. Permits for new construction, however, declined slightly. The economic recovery has been widely linked to the health of the housing sector, as a rebound in housing prices is needed to help millions of underwater homeowners escape their debts. As long as home prices remain depressed, it is unlikely home prices will rebound.
Inflation Muted, Consumers Still Wary – Daily Mortgage Rate Update for August 13th, 2010
August 13, 2010 by Dan Hartman · 1 Comment
Some consider Friday the 13th to be an unlucky date. Unfortunately for those hoping for even lower interest rates, there wasn’t enough meaningful economic data due today to use that bad luck. Due this morning were consumer prices and consumer sentiment, and the picture on those metrics has been clear enough recently that no amount of misfortune could influence them beneficially.
