Category Archive: Rate Watch

Nov 19

Mortgage Rate Watch November 19, 2012

A little late posting this tonight, very busy day!

After the post last Friday the market improved towards the end of the day.  This morning it opened off a little then bounced back in the afternoon.  Not enough change in either direction to impact interest rates.  One reason they are not moving is because the yield spread between the 1/8 increments rates are quoted in is so large it will take a pretty big movement to bounce either direction.

It will be a short week for trading in the mortgage backed securities market as well as the stock market.  Both are closed all day Thursday and half a day Friday.

Nov 16

Mortgage Rate Watch November 16, 2012

No change in mortgage interest rates over Wednesday’s pricing.  The Industrial Production Report was released this morning and the index declined very slightly when the experts were expecting a slight improvement. 

I believe the storm has been more of an influence on the markets than the recent financial reports.

The last quote I received this morning for the bond market showed a little improvement which is a good sign on a Friday.  Over the years it seems to me Friday’s are usually off days, investors taking money out of the market over the weekend in case we attack Canada or something silly like that.

 

Next week is going to be a light one for financial reports, home sales will be released on Monday, and housing starts are due Tuesday, sounds backwards to me.  Ironic but Jobless Claims and Consumer Sentiment are both due out Wednesday, as are the Leading Indicators. 

 

2:00 update, Mortgage Backed Securities are up 8/32 which is good for interest rates, when bonds go up interest rates go down.  That is not enough change to impact rates yet, but at least they are headed in the right direction.

 

There will be fewer hours of trading next week, the market is closed Thursday and half a day Friday in observance of Turkey Day.

 

Nov 14

Rate Watch November 14, 2012

 

Bonds Down a Little Rates Up Slightly

 

Not a big movement, but Mortgage Backed Securities are trading a little lower this morning, down about another 5/32’s. Interest rates are up very slightly, not enough to change the rate.  Lenders look at yield and borrowers look at rate, the yield is only slightly less than yesterday so not enough change to bump the rate an 1/8 of a point. 

 

In fact, considering how small the change is in yield supports something I have thought for the last couple of weeks, interest rates are not as low as they should be.  Yes, I know they are at an all-time low!  But considering how much the price of bonds have increased recently I would have expected the rates would have improved more than they have.

 

So this little movement today and yesterday didn’t change anything, there was already a little fat imbedded in the rate or so it appears to me.   

 

Jun 01

Rate Watch – June 2012

Mortgage Rates improved again this week hitting record lows.  Bad economic news domestic and abroad continued to push mortgage rates down.  The unemployment figures were also bad, jobs added were less than half of what was expected and the unemployment rate increased slightly. Something interesting about the new jobs report, they lowered the numbers for previous months by almost 50,000 and that is a lot of nonexistent jobs that were counted, opps!

I have been hearing for at least a month that home sale are picking up dramatically.  Locally that may be true, I know the mortgage company I work for had a record month for May.  We closed an all-time high for a month, breaking the old monthly record by 4.6 million.  Our previous record was set in September 2010.  By the way, the 4.6 million INCREASE is more than most of our competitors do totally for a month.  We were on the plus side of a 100 million for the month, by far the largest volume of any mortgage company based in Kentucky.

Okay, let’s be honest, we do a lot of things right, but there is a lot less competition too.  I have not had a call from a recruiter since 2008, I have had 3 calls in the last week looking for loan officers.  Volume must be picking up in my area.

I just posted the lowest rate on my application site, be sure to check them out.

How much lower can they go?  Not much, there are cost to bring money to the closing table, the current rates are getting painfully close to the hard dollar cost of raising the money.  How much higher can they go? No limit. 

Remember my first rule on interest rates, Rule #1, What goes up must come down, what goes down must come up.

Every day you do not lock in a low rate is one day closer to a higher rate.

 

 

May 04

Rate Watch 5/4/12

Interest rates have remained steady for the past two weeks, unusually steady! Today I posted a slight improvement on the conventional 30 and 15 year rates, how much lower can they go? 

The jobs report released this morning showed an employment increase of 115,000 new jobs added in April, about 55,000 less than expected.  The unemployment figures also improved slightly. Personally, I do not believe these reports, a decline in unemployment claims is not an indication of new jobs created, simply that benefits have run out.  Mortgage bonds reacted favorably to the news, interest rates decrease when the price of mortgage backed securities increase.

I have watched interest rates for a few decades and it seems like Friday is usually an uptick day, not down.  That makes sense, some money managers sell paper on Friday just in case we get tangled up in a war over the weekend.  Those Canadians have been very quiet lately…  

 

To take advantage of the low interest rates visit my online application site or print and use this simple form to get started. If you prefer we can do it over the phone, call my direct line during normal office hours, (502) 753-4127.

 

 

 

Apr 21

Mortgage Interest Rates Update

Mortgage rates for Kentucky continued to be ranged bound this week ending about where they started.  Not much good news for the economy kept them in check.  Even the mess in Europe had little impact.  The latest update on my Rate Sheet was almost identical to Monday’s posting.

I had a couple of interesting conversations on this topic with people that were inquiring about getting a loan this week.  The first person asked if I thought rates would go a lot lower.  My response was the same as it has been for almost a year now, “How much lower CAN they go?  There are more numbers above the current rate than there are below it.”

Jim’s Rules Regarding Rates:

Rule #1:  What goes up must come down, what goes down must come up.

Rule #2:  Every day you don’t lock a low rate is one day you are closer to locking a higher rate.

Rule #3:  The current rate is either going to get better, stay the same or get worse.  Count on it.

There was actually a quarter point improvement in the Secondary Market Program at KHC which I find odd.  This is a relatively new program and allows borrowers that are not first time home buyers.  Historically KHC has only provided financing to first time home buyers.  Last week both programs were priced the same.

The second interesting conversation on this subject was with a lady that is currently has an adjustable rate mortgage (ARM) and was inquiring about refinancing to a fixed rate.  Her reluctance is that her current ARM rate is about a quarter point lower than the current fixed rate.  Her answers to my questions pointed out that her rate cap is almost 8 points higher than where she is now!

It took her breath when I told her the highest rate on her existing loan could be in the mid 11’s.  See Rules # 1 & 2 above.

HARP 2.0

Harp is helping a lot of home owners refinance that are currently upside down or do not have enough equity.  If you have been told that you do not qualify due to either of these reasons, ask about Harp 2.0.

 

Visit my online application site or print and use this simple formto get started. If you prefer we can do it over the phone, call my direct line during normal office hours, (502) 753-4127.

 

Apr 16

Interest Rates Remain Steady

The mortgage bond market opened up this morning and has remained on the plus side all day, a good sign for long-term mortgage rates.  Interest rates do the opposite of the price of bonds, if bonds go up, rates go down. So the price on interest rates improved slightly this morning.  That sounds funny doesn’t it? The price of interest rates, most people don’t think of it as buying money. 

The driving force seems to be the mess in Europe.

How much lower can rates go?

Not very much, there are fixed costs just to bring the money to the table.  The stock broker that sells the bonds must be paid, the investor that buys the bonds wants some return, the company that originates the mortgage needs a little to keep the lights on, the servicer that collects the payments and pays the bills gets a little bit.  Seems like I am missing something, oh yeah, the loan officer! 
Choose your own numbers assigned to all of that stuff and it becomes clear, they can’t go much lower. 

Rates are here.

Online Loan Application is here.