Current Mortgage Interest Rates – Week of 10/9/12
Mortgage bonds reach their peak for a second straight week but fail to set new records. PIMCO bond fund manager and co-founder warns bonds could be “burned to a crisp”.
What happened with interest rates last week?
Mortgage bonds peaked at the best levels in history for the second straight week, signaling a new ceiling of resistance for bonds, with investors less willing to buy at historic levels. With mortgage interest rates still at or near historic lows, the Fed is accomplishing its goal of keeping rates low through the QE3 bond buying.
The economic news was light last week, leading up to Friday’s Jobs Report, where the Labor Department reported 114,000 new jobs in September and a falling Unemployment Rate of 7.8%. Both figures showed signs that the labor market is starting to see some level of improvement.
Positive headlines out of Europe led to investor selling pressures earlier in the week, but the Fed quickly stepped in to purchase the added supply. Further selling pressure came as Bill Gross, the manager of the world’s biggest bond fund with over $1.8 trillion in assets under management, warned that bonds could be “burned to a crisp” if the U.S. doesn’t tackle its debt problems. He further warns that if the U.S. does not change its fiscal direction, we jeopardize the U.S. Treasury and mortgage bonds’ status as the world’s go-to safe haven, in addition to the dollar’s role as the world’s premier reserve currency. This says a lot from a guy whose fund made $2.8 billion in cash last month from their Bond activity.
What’s coming up this week on the economic calendar and what’s the impact on interest rates?
The market was closed on Monday in observance of Columbus Day. Bond prices opened the week higher on Tuesday, following a report from the International Monetary Fund (IMF), stating that the world economy will grow by 3.3% this year, the slowest since 2009. News that’s bad for economic growth, but good for safe-haven bond buying and interest rates.
On the economic calendar, the activity will be light until Thursday at 9:30 CT when Initial Jobless Claims are released. Although the release shouldn’t have a big impact on mortgage interest rates, we will watch closely to gauge any growth in the employment sector. Also weighing on Bonds this week will be a $32 Billion 3-Year Note auction on Tuesday 10/9.
Having peaked at the same resistance levels and pulled back each of th
e last two weeks. From a technical standpoint, a “Double Top” has formed, signaling a short-term bearish signal. This technical signal appears when mortgage bonds have a rise, a drop, another rise of the same level, and another drop. Instead of breaking through the ceiling of resistance, the Bonds have been pushed lower at the resistance each time. After multiple attempts, odds are not good that the level will be broken in the near term.
Here’s our strategy for the days and weeks ahead…
Having attempted to break through and set new historic lows, mortgage backed securities have seen pretty steep sell-off since the end of last week. While we do expect interest rates to maintain their current trading range, I feel that the opportunity to buy a new home or refinance your current home at the lowest rates in history will not be around for long. That could be weeks, could be months, but the opportunity will not be around for years. If you’ve thought about selling and buying a home, it’s time to create a game plan.
The Fed will continue its Bond buying through QE3, maybe even a QE4, 5, 6…. But, we tend to agree with Mr. Gross and his PIMCO billions. The man understands the Bond market and has brought up a valid point that ties together our fiscal direction and the value of our U.S. Bonds and Dollars. As a “safe-haven” for the fearful global investor, we don’t realize how their safety-seeking investing has helped keep our markets afloat with their influx of capital. If the sentiment ever turns to our Dollar and Bonds not being a “safe-haven”, we could see bonds, rates, and our dollar suffer greatly.
Our clients that we have closing in the near term are advised to float their interest rate to see if Bonds can make another run at their historic levels. After a several week, upward trend, we will be switching our stance to a locking bias if selling pressures cause Bond prices to suffer. Longer term transactions occurring in the next few weeks to months, we recommend starting your approval process now to be in a position to lock in your rate when the opportunity arises.
We maintain an ongoing dialogue with our clients about the market and interest rates throughout their financing experience so we can take advantage of the lowest rates when they present themselves. We all want the lowest rate, and the best way to ensure that you get the lowest rate, is to build a relationship with your mortgage planner, so they can best advise you on when to lock in your rate. Call us today for a complimentary mortgage review or Apply Online.
Current Interest Rates – Week of 8/27/12
Continued volatility brings interest rates and stocks from recent highs. Fed hints at purchase of Mortgage Backed Securities to further stimulate the economy. Is QE3 coming?
What happened with interest rates last week?
After weeks of steep selling in the Bond markets, yields for mortgage interest rates and the U.S. 10 yr. Treasury have risen anywhere between .25%-.375%. That’s a huge swing if you’re a home buyer out shopping with your Real Estate agent. With mortgage backed securities flirting with support at the worst levels since March (100 day moving average) and stocks fighting resistance at multi-year highs, something had to give. Mortgage backed securities and interest rates bounced off their worst levels and managed to erase half of their losses in one trading day, establishing new support at the 50 day moving average. At the same time, the 10 yr. Treasury peaked at its 200 day moving average before starting to pull back. These resistance levels will now begin to establish a new trading pattern.
What happened? The economic news was light last week, but most of the volatility came after the Fed released its FOMC minutes and further hinted at the need further stimulus. The commentary at this point hints at the purchase of Mortgage Backed Securities to try and help keep rates low or possibly drive them lower. While much of QE3 has been priced into the market for the last few months, a final release and confirmation of the purchase plan will likely bring more volatility to the markets.
Last week we showed how mortgage backed securities had fallen through support at the 50 day moving average (dma) and were trying to hold support at the 100 dma. After testing the support, mortgage backed securities rebounded to break above resistance and establish new ground at the 50 dma. This level will be watched closely to see if pricing can improve and bring us lower interest rates. (Remember that as the price of mortgage backed securities increase, the interest rates/yield will decrease).
What’s coming up this week on the economic calendar and what’s the impact on interest rates?
Most of the week will surround commentary, editorials, guesses, and opinions surrounding Fed Policy and direction. Does it make sense to take on further Fed stimulus by purchasing mortgage backed securities to boost the economy? The debate has been going on for years and the effects may linger for decades, but there is a strong likelihood that QE3 is coming. Fed Chairman Ben Bernanke will be delivering a speech on the Economic Outlook and Monetary Policy on Friday, possibly announcing QE3. If/When it happens, be prepared for massive market volatility.
The Bond markets will also battle a new $99 Billion in Treasury auction supply. As another long term, secure outlet for investors, these auctions can take away from buying of mortgage bonds but also acts as a litmus test for the Bond markets as a whole. $99B is a massive supply to unleash on the markets.
The economic calendar is full of reports this week but most should not have much of an impact on the Bond markets until Thursday’s Core PCE release. A popular measure of inflation, Core PCE should remain tame, but bonds and interest rates will almost always suffer if inflation starts to increase. File that away for now, but keep in mind for the coming months/years. Closing out the week will be the release of Chicago PMI, a manufacturing index to judge economic growth.
Here’s our strategy for the days and weeks ahead…
Interest rates have managed to find their way back to amazing levels and within a close range of historic lows. This rebound is a great opportunity for home seekers and home owners to think about locking in their interest rate. We’ve been shown again how volatile interest rates can be and see this rebound as an opportunity to capture what was lost. Sure, rates could move lower, but they could very easily move lower. Start a dialogue and relationship with someone that understands the market so you can take advantage of interest rate opportunities when they present themselves.
We maintain an ongoing dialogue with our clients about the market and interest rates throughout their financing experience so we can take advantage of the lowest rates when they present themselves. We all want the lowest rate, and the best way to ensure that you get the lowest rate, is to build a relationship with your mortgage planner, so they can best advise you on when to lock in your rate. Call us today for a complimentary mortgage review or Apply Online.
Current Interest Rates – Week of 8/6/12
In another volatile week, interest rates see highs and lows based on a mixed bag of economic reports and commentary. After breaking through key support levels and rates still near historic lows, we urge potential prospects and clients to start creating a strategy to take advantage of the big swings in their potential interest rate for their home loan.
What happened with interest rates last week?
After seeing one of the worst trading days in months on Friday 7/27, mortgage backed securities and interest rates made up most of their ground by the time the market closed on Monday 7/30. Showing a clear example of how volatile interest rates can be. The choppy trading continued throughout the week.
The major catalysts leading to these swings came from commentary out of last week’s Federal Reserve monetary policy statement. While the Fed said that the economic activity had slowed over the first half of 2012, there were not yet any announcements of further stimulus or QE3.
On Friday, the market opened with an expected 100,000 new jobs created by employers in July. The actual figure came in far better than expected at 163,000, while the Unemployment rate for people still filing/receiving unemployment assistance increased to 8.3%. Investors saw this as a ray of hope and helped push stocks higher while our mortgage backed securities and interest rates suffered, falling below a key level of support for the first time since March. Another reminder to be proactive with your home financing, whether purchasing or refinancing.
What’s coming up this week on the economic calendar and what’s the impact on interest rates?
After the rough trading day on Friday, mortgage bonds are trying to shake off some of the losses and stage a rally to open the trading week. After falling below the key support at the 25 day moving average, we will be watching to see if mortgage backed securities can close above the resistance level and start to establish a new trend towards historic lows.
There is not much economic data scheduled for release this week but investors will be watching to see how the Bond market handles an auction of $72 billion in auctions. This is where the market gets tested. Are our bonds still the safest haven for global investors looking to minimize risk? We’ll know by the end of the week.
Here’s our strategy for the days and weeks ahead…
Mortgage backed securities and interest rates have been extremely volatile over the last few weeks, showing glimpses of market uncertainty that we’ve faced throughout this financial crisis. With so many outside influences affecting the direction of interest rates, it is important to identify a trading range so we can have a better opportunity to secure the lowest interest rates when the opportunity arises.
Mortgage backed securities closing below the 25 day moving average for the first time since March could change the market sentiment and lead interest rates higher. Until bonds stabilize above this level, we will be recommending that our clients lock in their interest rates in the near and short term to take advantage of near historic lows. Should the market move to new historic lows after a rate lock, our team has the ability to renegotiate your interest rate with our lenders, providing a win win situation in this volatile and uncertain market.
We maintain an ongoing dialogue with our clients about the market and interest rates throughout their financing experience so we can take advantage of the lowest rates when they present themselves. We all want the lowest rate, and the best way to ensure that you get the lowest rate, is to build a relationship with your mortgage planner, so they can best advise you on when to lock in your rate. Call us today for a complimentary mortgage review or Apply Online.
Current Interest Rates – Week of 7/30/12
Interest rates move fast as fears subside in Europe, helping boost stocks. Mortgage backed securities move from all time highs to their worst levels in 3 weeks as investors sell bonds to free up cash and take advantage of the positive global economic outlook.
What happened with interest rates last week?
We started off last week’s report with interest rates at all time lows and the yield on the 10-Year Treasury Note at its lowest levels since the early 1800s, 1.39%. By the time the market closed on Friday, mortgage backed securities had reached their worst level in 3 weeks and the 10 yr. Yield had climbed to 1.54%. That is a massive swing in the market, with the majority of it coming in a 3-4 hour period on Friday.
Why the big swing? Before the market opened on Friday, rumors surfaced that the European Central Bank (ECB) would start buying debt of countries within the European Union (such as Italy, Spain, France…) to reduce the recent pressures on their yields/rates. We mentioned last week that the Spanish yield had climbed to 7.62%, but after investors factored in the potential purchasing of the ECB, the yield dropped down to 6.58%. The ECB purchasing these other bonds lets investors know that they’re not the only ones with skin in the game for the national debt of a country, thus driving down the required yield or required rate of return for the bonds of those countries being purchased.
The end result of this shift in market sentiment is for money to flow out of the safe haven of our US bonds (MBS, 10 yr. Treasury…) and into something that is paying a higher yield. This causes our mortgage backed securities to sell off, driving rates higher. The chart below will show the swing on Friday after the rumors were released.
When it comes down to it, investors can purchase a fixed rate of return from the US at a rate of 1.39% through a 10 yr. Treasury Note or they can go buy a fixed rate of return from the Spanish Treasury and get a 6.58% rate of return. It all comes down to investors having confidence that their yield will get paid and that there will be a market available to sell when the time is right. The spreads on these returns will normalize at some point, but in the mean time, look for investors to keep rolling the dice to find the sweet spot between a risk/reward relationship in bonds and treasuries.
What’s coming up this week on the economic calendar and what’s the impact on interest rates?
Following up a volatile trading week, mortgage backed securities and interest rates won’t have a chance to rest. The FOMC and ECB will be meeting this week with investors listening closely for any rumors and announcements. Since the FOMC and ECB have the ability to flex their muscle and announce how much firepower they’re willing to invest to help stabilize the markets, investors recognize this and will in many cases follow their direction. Rumors alone caused the market shift on Friday, so any news could be an important factor to help our clients secure the lowest interest rate.
Here’s our strategy for the days and weeks ahead…
As the 10-Yr. Note and mortgage backed securities took one of their largest hits in months, we are recommended that our clients closing in the coming days/weeks to lock in their interest rate now. We were fortunate to have our clients prepared for the market movement on Friday and were able to secure their interest rates before the market moved, savings them thousands of dollars over the life of their loan.
The opportunity to secure a historic low interest rate will come and go, so if you or your clients are closing in the coming weeks/months, we continue to recommend starting your pre-qualification process so that you can have a strategy in place for when interest rates make another run at historic lows. By beginning the process with your mortgage planner, they can be prepared to help you take advantage of these historic low mortgage rates next time the opportunity arises.
We maintain an ongoing dialogue with our clients about the market and interest rates throughout their financing experience so we can take advantage of the lowest rates when they present themselves. We all want the lowest rate, and the best way to ensure that you get the lowest rate, is to build a relationship with your mortgage planner, so they can best advise you on when to lock in your rate. Call us today for a complimentary mortgage review or Apply Online.
Current Interest Rates – Week of 7/9/12
Poor jobs report and bleak painting of future job growth lead home loan interest rates to all time lows. Sets the stage for best home buying and home refinance opportunities ever.
What happened with interest rates last week?
Interest rates moved a leg lower to set new all time lows for potential home buyers and homeowners. The Jobs Report was released last Friday showing that only 80,000 jobs were created in June, well below the 100,000 that were expected.
These gloomy reports, in combination with a stalling global economy, create uncertainty for stock and equity markets. The end result, money flows from those stocks and equities into the safe haven of bonds and mortgage backed securities, causing interest rates/yields to drop to record lows.
What’s coming up this week on the economic calendar and what’s the impact on interest rates?
Following the poor Jobs report here on the mainland, China and Japan released worse than expected economic data to start our trading week. While mortgage backed securities and bonds are trading at unprecedented levels, these lows could be affected by $66 billion in notes and bonds that will be auctioned this week.
The lackluster reports have also started to revive the talks of QE3 with the markets placing a 75% chance that further stimulus will be unveiled. Let the banter between Fed members begin and expect it to continue until the next Fed meeting in August.
Here’s our strategy for the days and weeks ahead…
Home loan interest rates continue to ride the wave of the US and global markets and as these markets continue to plunge, our home financing rates are doing the same. The advice to our clients closing in the days/weeks ahead would be to lock in your rate today, literally sitting at the best levels ever. Rates could continue to move lower, but our signals point to rates going back up to more “normal level” before they push lower in a longer time frame.
The chart below shows mortgage backed securities breaking through all previous resistance levels into historic and untested territory. With no real trading/technical data available at these levels, new resistance and support is being created daily/hourly. Resistance and support will become stronger as the levels are tested over time.
We maintain an ongoing dialogue with our clients about the market and interest rates throughout their financing experience so we can take advantage of the lowest rates when they present themselves. We all want the lowest rate, and the best way to ensure that you get the lowest rate, is to build a relationship with your mortgage planner, so they can best advise you on when to lock in your rate. Call us today for a complimentary mortgage review or Apply Online.
Current Interest Rates – Week of 7/2/12
Home mortgage rates are opening this holiday week matching the best levels ever. There’s a strong chance rates could go even lower but have you thought about if they went up? Interest rates fluctuate on a daily basis so it’s important that you’re working with a trusted adviser that understands the market and can help you time the swings.
What happened with interest rates last week?
Mortgage backed securities and home loan interest rates traded in a tight range last week without much news hitting the wire. The inflation reports (Core PCE) were within the Fed’s target range for the time being and the Chicago PMI came in just shy of expectations.
Most market movement came as investors followed news out of the Euro Summit, seeking some sort of resolve. Yet again, no clear catalyst has presented itself to move the markets in either direction.
What’s coming up this week on the economic calendar and what’s the impact on interest rates?
The ISM Index was released Monday morning below expectations, helping mortgage backed securities and home interest rates open at record levels. With the markets closed on the 4th, trading should be light going into a Jobs Report that will be released on Friday. If the jobs market continues to show further decline, we could see interest rates break out to new historic lows.
Here’s our strategy for the days and weeks ahead…
With the the holiday shortened trading week, we look for interest rates to hold their current levels going into Friday’s Jobs report. We are advising our clients starting their process to float while mortgage backed securities attempt to set all time lows. While market volume may be slow going into the holiday, we will be monitoring closely as volume and potential volatility come back into play.
We maintain an ongoing dialogue with our clients about the market and interest rates throughout their financing experience so we can take advantage of the lowest rates when they present themselves. We all want the lowest rate, and the best way to ensure that you get the lowest rate, is to build a relationship with your mortgage planner, so they can best advise you on when to lock in your rate. Call us today for a complimentary mortgage review or Apply Online.