Mortgage Market Update 2/20/12

Increased optimism that a Greek bailout package will be approved today is causing investors to shift to riskier assets, which was negative for mortgage rates. Mixed US growth and inflation data had little net impact. Mortgage rates ended the week a little higher.

After several weeks of uncertainty, it appears that European officials are close to reaching agreement on a much-needed bailout package for Greece. Despite strong public opposition, Greek leaders took a big step by passing a budget with new austerity measures. Comments from euro zone leaders expressed broad support for providing additional aid, which Greece needs to avoid a default on debt maturing on March 20. Prior to this week, it appeared that the option to let Greece default and possibly leave the European Union was under serious consideration, but investors now believe that European leaders will not let this happen. An important meeting is scheduled for today, Monday, 02/20/2012, and investors expect a deal to be announced. In anticipation, investors shifted to riskier assets, and relatively safer assets such as mortgage-backed securities (MBS) dropped in price, pushing mortgage rates higher.

The inflation data released last week showed that core inflation rates (which exclude food and energy) have continued to rise. Core CPI inflation was 2.3% higher than one year ago, which was the highest annual rate since September 2008. Fed officials forecast that core inflation levels will moderate later in the year. If it unexpectedly continues to move higher, however, the impact could be large. Higher inflation is negative for mortgage rates. In addition, it would be more difficult for the Fed to maintain its current loose monetary policy. Investors will be closely watching core inflation levels in coming months to see if the Fed’s forecast proves correct.

Today’s meeting between Greek and euro zone officials will be the most highly anticipated economic event this week. Investors expect that a deal will be reached to provide additional aid to Greece. This week will be a light week for US economic data. Existing Home Sales will be released on Wednesday. New Home Sales and Consumer Sentiment will come out on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. Mortgage markets will be closed today in observance of Presidents Day.

Call Pete, Cody, Debbie or Patrick today to get a firm rate quote.

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Your friends at “Oklahoma Mortgage Lending”

Tulsa in Top 10 Among Out of Town Online House Hunters

The state of Florida may dominate the list of most desired properties list, with 7 out of 10, but popular metros outside the Sunshine State include Tulsa, Okla., the Riverside-San Bernadino-Ontario area of California, and South Carolina’s Charleston-North Charleston-Summerville region.

Trulia calculated the top metro areas where locals are looking elsewhere for real estate. By calculating the ratio of outbound listing views to local listings, they arrived at a list of mostly bigger (and comparatively more expensive) cities where residents are searching for a way out.

But whether prospective homebuyers are looking to buy in or get out, what’s driving their search behavior is affordability. That said, today’s looky-loos may not necessary become tomorrow’s buyers — tight credit and larger down-payment requirements may stop many house-hunters in their tracks. When the economy begins to shift, however, expect many of these markets to reap the benefits of pent-up demand.

Chart below shows the Top 10 of where demand among online house hunters is strongest.

Article offered by Aol Real Estate, and data compiled by Trulia.  Click Here to view the full article.

Mortgage Market Update 2/13/12

With little US economic news last week, investors focused most of their attention on Europe, where Greece is attempting to avoid a debt default. A lack of progress in Greece late in the week caused a minor flight to safety, and mortgage rates ended slightly lower than last week.

For most of the week, it appeared that Greek officials were on track to deliver a package of austerity measures required for Greece to receive additional aid. The negotiations took an unexpected step backward on Friday, however, as Greek political leaders agreed on an austerity package on Thursday, but European Union (EU) officials stated that Greece will not receive additional aid until the Greek Parliament passes the package. Given the resistance among the Greek people, this is not a sure thing, and it extends the uncertainty about whether Greece will be able to avoid a debt default. As a result, investors shifted to relatively safer assets, including US mortgage-backed securities (MBS), which helped mortgage rates and hurt stocks.

In a light week for US economic data, the Jobless Claims report stood out. Weekly Jobless Claims unexpectedly dropped to 358K. Following several years of readings consistently above 400K, weekly claims have been mostly under 400K over the last couple of months. In the past, readings in this range have been consistent with an improving labor market. In January, the Unemployment Rate dropped to the lowest level since February 2009, and the recent Jobless Claims reports provide additional evidence that the labor market is moving in the right direction.

The most significant economic data this week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Tuesday. Retail Sales account for about 70% of economic activity. Industrial Production, another important indicator of economic growth, will come out on Wednesday, along with the detailed FOMC Minutes from the January 25 Fed meeting. Housing Starts will be released on Thursday. Import Prices, Philly Fed and Empire State will round out the schedule.

Call Pete, Cody, Debbie or Patrick today to get a firm rate quote.

Thank you for your partnership!

Mortgage Market Update 2/6/12

The most significant influence on mortgage rates last week was Friday’s Employment report, which was much stronger than expected. Events in Europe have had less impact on US markets in recent weeks. While mortgage rates moved lower early in the week, they ended the week a little higher.

Friday’s Employment data exceeded expectations in nearly every area. Against a consensus forecast of 135K, the economy added 243K jobs in January, which was the highest level since April 2011. Revisions to prior months added an additional 60K jobs. The Unemployment Rate dropped to 8.3% from 8.5% in December, to the lowest level since February 2009. Strong labor market data is great news for the economy, but it increases future inflationary pressures, which is unfavorable for mortgage rates.

While mortgage rates ended the week higher than last week, the Freddie Mac weekly mortgage rate survey released on Thursday showed a large decline in rates. This is simply due to the timing of the survey. Freddie Mac collects data from origination companies on Monday and Tuesday and releases the results on Thursday. In this case, the survey captured the drop in rates following the prior week’s Fed meeting, but not the rise in rates due to last week’s strong jobs report.

The economic calendar will be very “Light” this week. The Trade Balance and Consumer Sentiment will be released on Friday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday.

That’s it for this week.

Call Pete, Cody, Debbie or Patrick today to get a firm rate quote.

Thank You For Your “Partnership”.

Mortgage Market Update 1/30/12

Last Wednesday’s Fed announcement was very favorable for mortgage rates. The week’s mixed economic data, Treasury auctions, and news from Europe had little influence. As a result, mortgage rates ended the week lower.

The forecasts from Fed officials for the fed funds rate contained some major surprises for investors. Fed officials now expect that economic conditions will allow the fed funds rate to remain at exceptionally low levels until at least “late 2014″. Prior statements extended the expected time frame only to mid-2013. In addition, comments from Fed Chief Bernanke suggested that Fed officials would like to see stronger economic growth, and they are open to the possibility of additional Fed easing. Many investors think it is likely that the Fed will announce additional MBS purchases at a later meeting. The expectation for a low fed funds rate and the possibility of additional Fed purchases of mortgage-backed securities (MBS) increased demand for MBS, which resulted in higher MBS prices and lower mortgage rates.

Friday’s release of Gross Domestic Product (GDP) showed an increase at a 2.8% annual rate during the fourth quarter of 2011, which was a little below the consensus forecast, but up from 1.8% during the third quarter. Early estimates for the first quarter of this year are for a slower growth rate. The long-run average growth rate for the economy is generally considered to be around 3.0%, and the economy usually grows at a faster than average rate following a recession. Given that the economy is growing below its potential and that inflation remains tame, the Fed’s expectation that monetary policy will remain very stimulative for a long time is understandable.

The biggest economic report this week will be the important Employment data on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, Core PCE inflation and Personal Income will be released on Monday. Chicago PMI Manufacturing and Consumer Confidence will come out on Tuesday. ISM Manufacturing, Construction Spending, and ADP Employment are scheduled for Wednesday. Productivity, Factory Orders, and ISM Services will round out a busy week.

Rates are very attractive right now. Let’s “Lock Them & Close Them”.

Thank you for your partnership. We appreciate each & every one of you!

Call Pete, Cody, Debbie or Patrick today to get a firm rate quote.

Have A Great Week!

Mortgage Market Update 1/23/12

An improving US economic outlook was negative for mortgage rates this last week. Reduced concerns about Europe also caused a partial reversal in the flight to safety trade. As a result, mortgage rates ended the week higher.

Early in the month, the December Employment report showed a larger than expected increase of 200K jobs, and the Unemployment Rate continued to move lower. This week, Weekly Jobless Claims fell to the lowest level since April 2008. The labor market is one of the most important factors in the health of the economy, and many investors now view the outlook as brighter than it has been since the financial crisis began. If this is the case, it will be great news for the economy, and job gains will increase the willingness and the ability of people to purchase homes.

The Housing sector data released this last week was encouraging as well. December Existing Home Sales increased 5%, while the inventory of unsold homes declined 9%, to the lowest level since March 2005. December Housing Starts for single-family units increased 4%, and Building Permits for single-family units rose 2%. Finally, the January NAHB Home Builder confidence index rose for a fourth consecutive month to the highest level since 2007. Improving economic conditions, high affordability levels, and low mortgage rates provide solid reasons to be optimistic about the housing market.

The most highly anticipated economic news this week will be Wednesday’s Fed announcement. Investors will be looking for hints about whether the Fed will provide additional monetary stimulus. The most significant economic report will be Friday’s GDP data for the fourth quarter. GDP is the broadest measure of economic activity. Before that, Pending Home Sales will be released on Wednesday. Durable Orders and New Home Sales will come out on Thursday. Leading Indicators and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

There is no need to panic, however; while it feels like these historically low mortgage interest rates will last forever, they will not. This is an important time to encourage your clients to “Get It Done”. Sell the home, buy the home, lock in the historically low mortgage interest rate.

Call Pete, Cody, Debbie or Patrick today to get a firm rate quote.

Thank You For Your “Partnership”.

Mortgage Market Update 1/23/12

Increased concerns about Europe helped mortgage rates improve this last week, although the impact of the recently passed extension to the payroll tax reduction is beginning to push up mortgage rates for certain loans (discussed below).

The news from Europe was mostly negative this week. Economic growth in Germany was slower than expected. Negotiations on restructuring Greek debt did not progress as planned, increasing the risk of default. S&P is downgrading the debt of several European countries, including France. Finally, the European Central Bank (ECB) provided no relief, as it gave no indication that it would increase the level of aid available to troubled countries. As a result, investors shifted funds to relatively safer investments, including US mortgage-backed securities (MBS), which helped mortgage rates move lower.

The recently passed extension to the temporary payroll tax reduction contained a lightly publicized revenue raising provision to increase the guarantee fees charged on Fannie Mae and Freddie Mac loans.  This fee results in higher rates for borrowers, and mortgage rates for loans not expected to close within the next month or so have begun to reflect this coming increase in guarantee fees.

The most significant economic data this week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Industrial Production, an important indicator of economic growth, will come out on Wednesday. Housing Starts will be released on Thursday, and Existing Home Sales will come out on Friday. Philly Fed and Empire State will round out the schedule. Mortgage markets will be closed today, Monday January 16th, in observance of MLK Day.

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