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Thursday, June 30, 2011

Market updates and rates week of June 30

Rate sheet "influential" mortgages are experiencing modest price losses after Greek lawmakers agreed to implement aggressive austerity measures Thursday morning. Based on the market's reaction to this news, this was a widely expected outcome. This stabilization is somewhat comforting but not enough to stop a corrective rally before the long weekend. This paints a less positive picture for bonds over the next few days. After failing on multiple occasions to extend the two-month bond rally, traders are feeling technically exhausted. The path of least resistance is up for interest rates, at least in the short-term. That puts pricing in a defensive posture for the next 10 to 20 days. The market predictors are not ready to change the outlook for lower rates by the end of the summer. Remember, this happened last year, which supports the long standing view that "history is repeating itself" in the bond market. In times like these, the value of analyzing Mortgage Backed Securities charts greatly decreases and underlying benchmarks become much more important. Thursday morning the bond market came into the day as close to "on the edge" of the recent range as it could be. Long story short, the breakout has now been confirmed after looking indecisive leading up to 9:45 AM Chicago PMI data. After that, the snowball began. Volume ramped up, and yields moved sharply. The market reached its next major technical level for 10 year yields, and in terms of "history repeating itself" is an analogous level to how things happened in 2008. If history continues repeating, more volatility is in store--BIG swings.

30 year fixed - 4.625% - .250% points for rate
20 year fixed - 4.375% - 0 points for rate
15 year fixed - 3.750% 0 points for rate
10 year fixed - 3.375% 0 points for rate
5/1 ARM - 3.00% - 0 points for rate
7/1 ARM - 3.50% - 0 -points for rate
10/1 ARM - 4.125 % 0 points for rate
Jumbo - over 729,000
30 year fixed - 4.99% +.50 points for rate
30 year fixed - 5.125% - 0 points for rate
15 year fixed - 4.625 % - 0 points for rate
5/1 ARM - 3.750% - 0 points for rate
7/1 ARM - 4.250% - 0 points for rate
10/1 ARM - 4.625% 0 points for rate

Friday, June 17, 2011

Rates and market update

After experiencing a scary setback earlier in the week, home loan borrowing costs improved again today as a "flight to safety" continued to benefit bond yields.

A "flight to safety" happens when investors are nervous about owning risky assets like stocks, but do not want to miss out on earning a return on their funds, so they allocate their money into risk-free government guaranteed U.S Treasury debt to provide a safe-haven and an investment return. As benchmark Treasury yields fall on "flight to safety" buyer demand, prices of mortgage-backed securities move higher in unison. This allows lenders to reprice their rate sheets for the better and gives originators an opportunity to offer fence-sitting borrowers lower mortgage rates or more competitive closing costs.

The "Best Execution" conventional 30-year fixed mortgage rate is 4.50%. Some lenders may be quoting 4.50% with increased closing costs in the form of origination fees. Some lenders may also be quoting 4.375%, but those offers will definitely carry additional closing costs. These costs could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to break even on the extra up front costs.


30 year fixed - 4.50% - 0 points for rate
20 year fixed - 4.250% - 0 points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250%
5/1 ARM - 2.75% - 0 points for rate
7/1 ARM - 3.250% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% 0 points for rate
15 year fixed - 4.50% - 0 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

Friday, June 10, 2011

Mortgage Rates today - market opinions

Fixed mortgage rates fell for the eighth straight week in the widely watched Freddie Mac survey of what lenders are offering to well-qualified borrowers. The 30-year fixed-rate mortgage averaged 4.49% this week, down from last week when it averaged 4.55%, Freddie Mac said. Freddie Mac economist Frank Nothaft said a weak jobs report had pushed down yields on long-term Treasury bonds. Those debt securities are a benchmark for home lending rates, and mortgage rates followed suit
This week mortgage experts examined the 10 year Treasury note charts due to its ideal role as a benchmark of the general "bond market." While it's true that loan pricing is derived from MBS, or mortgage backed securities the goal was to examine long-term, big-picture movements. The highest yield levels of 2007 through present day lie roughly along the same line. There appears a near perfect parallel line that, with the exception of the initial panicked flight-to-safety in 2008 and the repeat performance in 2010, the 10 year Treasury note charts contains every last bit of trading since the crisis.
This is one of those times where technical analysis really is saying something very clear about the future: we're either in for an unfriendly bounce, or we're looking at the possibility of rates going lower.

Plain and Simple: The revisiting of a long term technical level coincides with several other uncommon market dynamics, including the end of QE2, this is combining to create a perfect storm where rates are "on the ledge, poised for directional volatility. Best advice, if you are purchasing or refinancing, work with a lender who has real time live MBS market data streaming to them so you can lock if the market starts to move into negative territory.

Mortgage rates this week:


30 year fixed - 4.375 % with .250% points for rate
20 year fixed - 4.125 0% with .250% points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250% with 1.00 point credit to borrower for rate
5/1 ARM - 2.75% - 0 points for rate
7/1 ARM - 3.125% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% 0 points for rate
15 year fixed - 4.50% - 0 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate

Friday, June 3, 2011

Today's rates and market up date

A week of troubling economic data helped push fixed mortgage interest rates to a new low for the year, representing the seventh consecutive weekly decline, according to the latest survey from Freddie Mac. Surveys of national consumer confidence and manufacturing activity in the past month have suggested the economy may be slowing. The S&P Case-Shiller National Home Price Index, meanwhile, showed first-quarter home prices fell by the steepest annual rate since the third quarter of 2009.The 30-year fixed-rate mortgage averaged 4.55% in the week ended Thursday, down from 4.60% the prior week and 4.79% a year earlier. Rates on 15-year fixed-rate mortgages fell to 3.74% from 3.78% the previous week and 4.20% a year earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages held steady from last week at 3.41%, but are down from 3.94% a year earlier. One-year Treasury-indexed ARM rates rose to 3.13% from 3.11% the prior week but are down from 3.95% a year earlier.

30 year fixed - 4.50% - 0 points for rate
20 year fixed - 4.250% - 0 points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250% with 1.00 point credit to borrower for rate
5/1 ARM - 2.75% - 0 points for rate
7/1 ARM - 3.250% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% 0 points for rate
15 year fixed - 4.50% - 0 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate