Mortgage Rates Predictions
March 11, 2008
Can I make accurate Mortgage Rates Predictions? On a day to day basis, the answer is yes. Since I track movement in the FNMA Mortgage Backed Bond Market and every basis point the market moves correlates directly with the interest rate I am able to offer, I can confidently provide mortgage rates predictions. When deciding whether to float or lock a loan, tracking trends in the Mortgage Bond market and paying constant attention to daily movements has saved my clients thousands of dollars.
There is always a degree of speculation involved anytime someone does long term mortgage rates predictions. That being said, I will speculate that we will at least have one more rally on long term fixed mortgages. The last few months of economic reports and the real estate market disaster give me no confidence that the economy is healthy. Later this week when the Retail Sales, CPI, and Consumer Sentiment reports are released I would expect to see even more proof that the economy is hurting.
Unfortunately, there are a few more factors to be considered than just the Bond Market in today’s mortgage environment. As I always say, “It’s all about RISK.” Investors are not yet confident that Mortgage Backed Securities are as good of an investment as the previously were viewed. In an effort to clean up the industry and encourage investors, credit requirements and loan level price adjustments [penalties that increase the mortgage rates based on credit scores or other layers of risk] have become exorbitant. This is still stalling the real estate market because the number of people that used to be able to qualify for mortgages has been cut in half. If your mortgage has any layers of risk to it, I would lock in on at least a 3 year arm while you can. The mortgage products like 100% financing, stated income, jumbo mortgages, second mortgages, and high LTV investment properties have been disappearing daily. Lenders have also cracked down on seasoning on title, appraisal seasoning, and loans in declining markets. Until this flight to quality is completed and the real estate market has life breathed back to it, I think we are in for more volatile hard times.
On the brighter side, the FED did basically upgrade Mortgage Backed Securities today. This should encourage foreign investors to put their money in Mortgage Backed Securities as a safe haven. I would love it if this was the spark that drives long term fixed rates back down to the low 5’s again.
Mortgage Update | 2.10.2008 | 30 Fixed 6.375% 15 Fixed 5.750%
March 10, 2008
We are set for another wild week for Fannie Mae Mortgage Backed Securities. Today the mortgage bond market has moved 66bp again today. 30 Year Fixed interest rates lowered .125% at open, then rose about .25% by mid morning, and now sit almost equal to Friday. The economic reports due this week are Balance of Trade [3.11], Crude Inventories [3.12], Retail Sales [3.13], Initial Jobless Claims [3.13], Consumer Price Index [3.14], and Consumer Sentiment [3.14]. Read more
Grau Team Mortgage Wrap Up | 30F 6.375% 15F 5.750% 7/1A 5.375% [1%]
March 7, 2008
This has been quite a week for Mortgage Rates. Monday-Thursday Mortgage Backed Securities dropped -272bp. Each 40-50bp move is equivalent to .125% change in interest rates. Rates raised almost .75% in 4 days! Today we made up significant gains after the Employment Report showed Non-Farm Payrolls declined by -63,000. We have strong rates going in to this weekend and look forward to next weeks Economic Reports.
RATES for FRIDAY MAR07 Read more
grauteam update | 2.26.2008 | 30F 6.375% 15F 6% 7/1[1pt] 5.125%
February 26, 2008
Inflation is the hot button this week. The Producer Price Index came in at a whopping 1.0% putting the overall year over year at 7.4%; the fastest rate of wholesale inflation since Read more
grauteam update | 2.12.2008 | 30F 5.75 7/1A 5.125%
February 12, 2008
Mortgage Backed Securities are a little off today, -28bp. Putting pressure on the long term fixed mortgages. There is no market moving economic news Read more
grauteam mortgage update | 2.4.2008 | 30F 5.625% 15F 5.250%
February 4, 2008
Mortgage Bonds have been inversely reacting to the Stock Market volatility. Since the only upcoming economic reports are not High Impact Read more
grauteam mortgage strategy | 1.31.08 end of day
January 31, 2008
Tomorrow has the potential to be a huge day for mortgage rates. The volatility we have experienced since the FED lowered the Federal Funds Rate 1.25% in a matter of days will most likely make tomorrow exciting. The Hourly Earnings, Average Work Week, Non-farm Payrolls, Unemployment Rate, ISM Index, and Consumer Sentiment Index all are released tomorrow. Read more
grauteam mortgage update | 1.28.2008 | 30F 5.625% 15F 5.125%
January 28, 2008
Currently the bond market is -6bp and the Dow Jones Futures are pointing to a low opening as well. New Home Sales numbers will be released at 10:00am today. With the current volatility we expect the Bond Market’s movement to be
Rate Watch | 30F 5.75% 15F 5.25%
January 24, 2008
We are in an increasingly volatile market. Yesterday we had unbelievable rates in the morning dipping down to 5.25 on 30 Fixed but Read more
grauteam mortgage update | 1.22.2008 | 30F 5.375% 15F 4.875%
January 22, 2008
Monday’s sell off around the world due to a lack of confidence in the US Economy and fears of a recession has resulted in the Fed making a move it hasn’t since 1984! This morning the Fed cut the Federal Funds rate by an unprecedented -75bp to 3.50%. Read more
