July 31st Mortgage Market Wrap-up - 07/31/09 05:13 PM
MBS prices are up +19/32 (FNMA 30-yr 4.5 at 100.62), above the initial price level at -4/32, and at the high for the day. The Fed purchased $20.2 billion in agency MBS during the weekly period ending July 29, from $21.1 billion the prior week. Freddie Mac reported that average mortgage rates rose in the week through July 30, with 30-yrs hitting 5.25%, from 5.20% the prior week.
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July 30th Mortgage Market Wrap-up - 07/31/09 05:10 PM
MBS prices are up +8/32 (FNMA 30-yr 4.5 at 100.00), above the initial price level at -4/32, and at the high for the day. MBS prices reached a low of -8/32. A rally in the stock market pushed MBS markets lower during the first half of the session. Strong demand for the 7-yr auction then turned MBS markets higher. Foreign investors purchased 63% of the total. The Dow rose 80 points. Tomorrow, Advance GDP will be released at 8:30 et and Chicago PMI will come out at 9:45 et.
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Rates Increase Slightly as Refinances Tail Off - 07/29/09 05:07 PM
The Mortgage Bankers Association weekly purchase activity index was unchanged, while the refinancing activity index decreased by 11%. Average reported rates for the prior week rose to 5.36% from 5.31% for 30-yr fixed mortgages.  Tomorrow, Jobless Claims will be released at 8:30 et, and there will be a 7-yr Treasury auction at 1:00 et.
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July 29th Mortgage Market Wrap-up - 07/29/09 05:05 PM
MBS prices are up +2/32 (FNMA 30-yr 4.5 at 99.75), below the initial price level at +7/32, but above the low for the day of -6/32. It was a quiet session before the 5-yr Treasury auction at 1:00 et. Demand was much weaker than expected for the auction, and foreign investors purchased 37% of the total. MBS prices dropped quickly after the auction, but they later recovered nearly all of their losses. The Fed's Beige Book indicated that the economy is showing signs of stabilization in many parts of the country. The Dow fell 25 points.
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Home Prices Up ... Dow Falls - 07/28/09 04:09 PM
The May Case-Shiller index of home prices in 20 metropolitan areas rose 0.5% from April, following 34 straight months of declines. While the results varied greatly in different parts of the country, the increase in average prices provided support for the analysts who believe that the housing market has bottomed. The Dow fell 10 points. Tomorrow, Durable Orders will be released at 8:30 et, there will be a 5-yr Treasury auction at 1:00 et, and the Fed's Beige Book will be released at 2:00 et.
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July 28th Mortgage Market Wrap-up - 07/28/09 04:07 PM
MBS prices are up +8/32 (FNMA 30-yr 4.5 at 99.69), above the initial price level at +3/32, but below the high for the day of +18/32.  Essentially, many investors bought MBS ahead of the 2-yr Treasury auction, anticipating very strong results. Although demand was about average for the auction, these investors were disappointed, and MBS prices returned to their pre-auction levels. Foreign demand accounted for 33% of the total auction. Separately, Consumer Confidence came in at 46.6, below the consensus of 49.0.
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Freddie Mac Economist Words Are Prophetic - 07/27/09 04:28 PM
Freddie Mac Chief Economist, Frank Nothaft, stated Wednesday, "recent housing data suggests... the worst may be behind us."  He was correct.  June New Home Sales jumped 11% to an annual rate of 384K units, well above the consensus forecast of 355K units, and the third straight month of increases. Inventories of unsold new homes fell to a 8.8-month supply from a 10.2-month supply in May.
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July 27th Mortgage Market Wrap-up - 07/27/09 04:15 PM
MBS prices are down -4/32 (FNMA 30-yr 4.5 at 99.44), above the initial price level at -8/32.  MBS prices spent the entire session in negative territory ahead of this week's large Treasury auctions. The Dow rose 15 points. Tomorrow, Consumer Confidence will be released at 10:00 et, and there will be a 2-yr Treasury auction at 1:00 et.
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The economic Week Ahead - 07/25/09 03:58 PM
The biggest economic report next week will be Friday's Gross Domestic Product (GDP) data for the second quarter of 2009. GDP is the broadest measure of economic activity. Prior to that, New Home Sales will come out on Monday. Durable Orders, another important indicator of economic activity, will be released on Wednesday. In addition, the Treasury will auction a total of $109 billion in 2, 5, and 7-year notes on Tuesday, Wednesday, and Thursday. Recent auctions have been well received, and investors will be closely watching the level of demand next week.
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Economic Facts - 07/24/09 05:41 PM
The Dow Jones Industrials stock index rose to the highest level since early January First-time homebuyers accounted for 29% of all transactions in June After falling below $60 per barrel recently, oil prices have risen  to $67 per barrel The Fed purchased $21 billion in agency MBS during the week ending 7/22 … (0 comments)

Low Inflation News Overshadowed by Stock Rally - 07/24/09 05:38 PM
Early in the week, a forecast from the Fed that inflation should remain low for the next couple of years moved mortgage rates lower. The economic news later in the week was less favorable for mortgage rates, however. Strong earnings reports produced a rally in the stock market, which pushed mortgage rates higher. In the end, mortgage rates finished the week essentially unchanged.
 In testimony before Congress on Tuesday, Fed Chairman Bernanke provided an update on the Fed's outlook for economic conditions. Of note, Bernanke predicted that inflation will not be a concern any time soon, which was good news for … (0 comments)

Jul 24th Mortgage Market Wrap-up - 07/24/09 05:36 PM
MBS prices are up +3/32 (FNMA 30-yr 4.5 at 99.56), above the initial price level at -3/32. It was a quiet session. Consumer Sentiment came in a little higher than expected. Bernanke spoke about financial regulation, but his comments had no influence on MBS markets. The Dow rose 25 points. For the week, MBS prices rose about 5/32.
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July 22nd Mortgage Market Wrap-up - 07/22/09 03:59 PM
MBS prices are down -4/32 (FNMA 30-yr 4.5 at 100.12), below the initial price level at -2/32. MBS prices held in a range for the entire session. No economic data came out today. Fed Chairman Bernanke's second day of testimony basically covered the same ground as yesterday. FHFA reported that May US home prices dropped 5.6% from one year ago, which was the smallest annual decline in ten months. Home prices rose 0.9% from April. The Dow fell 30 points. Tomorrow, Existing Home Sales and Jobless Claims will be released.
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July 21st Mortgage Market Wrap-up - 07/21/09 05:13 PM
MBS prices are up +22/32 (FNMA 30-yr 4.5 at 100.25), well above the initial price level at -5/32, and at the high for the day. Most investors issued favorable reprices at least once. No economic data came out today. MBS markets rallied following Fed Chairman Bernanke's testimony. In short, Bernanke predicted that inflation will remain low, which lifted MBS markets. While he expects economic growth to turn positive later this year, he suggested that the labor market may be weak for the next couple of years. As a result, the fed funds rate will likely remain near zero for "an extended period", according … (0 comments)

July 20th Mortgage Market Wrap-up - 07/20/09 03:49 PM
MBS prices are up +8/32 (FNMA 30-yr 4.5 at 99.56), above the initial price level at -8/32, and near the high for the day. Today's report on Leading Indicators had little impact. MBS markets rallied ahead of Fed Chairman Bernanke's testimony tomorrow. Investors want to be prepared in case Bernanke announces any new programs to push bond yields lower. The Dow rose 100 points. No economic data will be released tomorrow. Bernanke will be testifying before Congress at 10:00 et.
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The Coming Week - 07/17/09 03:34 PM
The economic calendar will be very light next week. Leading Indicators will come out on Monday, Existing Home Sales will be released on Thursday, and Consumer Sentiment will come out on Friday. In addition to the economic data, Fed Chief Bernanke will be testifying before Congress on Tuesday. Finally, Thursday's announcement about the size of upcoming Treasury auctions also may have an impact on mortgage rates.
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Fed Whiffs on Mortgage Rate Reductions - 07/17/09 03:33 PM
While the economic data released during the week generally matched expectations, the outlook for future economic growth improved due to strong earnings reports, tame inflation data, and a revised forecast from the Fed. Stronger economic growth was good news for the stock market, and the Dow rose over 500 points. It was unfavorable for the bond market, however, and mortgage rates ended the week moderately higher.
 On Wednesday, the Fed released its minutes from the June 24 FOMC meeting, and most of the news was negative for mortgage rates. The minutes revealed an upward revision to the Fed's forecast for economic … (0 comments)

July 17th Mortgage Market Wrap-up - 07/17/09 03:30 PM
MBS prices are down -8/32 (FNMA 30-yr 4.5 at 99.34), flat at the initial price level. Stronger than expected Housing Starts data caused MBS markets to finish a down week even lower. The Dow rose 30 points. For the week, MBS markets lost about -39/32.
Economic News
June Core CPI inflation rose at a low 1.7% annual rate Capacity Utilization fell to a record low reading in June After falling below $60 per barrel, oil prices rose back to $63 per barrel The Fed purchased $22 billion in agency MBS during the week ending 7/15 … (0 comments)

July 16th Mortgage Market Wrap-up - 07/16/09 03:45 PM
MBS prices are up +18/32 (FNMA 30-yr 4.5 at 99.62), above the initial price level at +10/32.  Reversing some of the losses from the first three sessions this week, MBS markets moved higher today. Jobless Claims came in a little stronger than expected, while the Philly Fed index fell short of the consensus forecast, and neither report had much impact on MBS markets. The Dow rose 100 points. Tomorrow, Housing Starts will be released at 8:30 et.The Fed purchased $22.2 billion in agency MBS during the weekly period ending July 15, from $17.1 billion the prior week. Freddie Mac reported that average … (0 comments)

July 14th Mortgage Market Wrap-up - 07/14/09 04:54 PM
MBS prices are down -12/32 (FNMA 30-yr 4.5 at 99.84), below the initial price level at -9/32, and at the low for the day. Today's economic data had little impact. Talk of a faster than expected economic recovery hurt MBS markets. The Dow rose 25 points. Tomorrow, CPI, Industrial Production, Empire State, and the FOMC minutes will be released.
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July 13th Mortgage Market Wrap-up - 07/13/09 05:07 PM
MBS prices are down -12/32 (FNMA 30-yr 4.5 at 100.22), below the initial price level at -3/32. Most lenders have already issued an unfavorable reprice. No economic data came out today. A rally in the stock market pushed MBS markets lower late in the session. The Dow rose 180 points. Tomorrow, PPI and Retail Sales will be released at 8:30 et.
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This Week's Economic Reports - 07/13/09 11:13 AM
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 Tuesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Wednesday. 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 activity, will be released on … (0 comments)

Strong Treasury Sales Help Lower Rates - 07/13/09 11:11 AM
With a light schedule for economic data, Treasury auctions had the greatest impact on mortgage rates during the week. Strong demand for the auctions and declines in the stock market helped mortgage rates end the week lower.
 In recent months, mortgage rates have been heavily influenced by concerns about the enormous amount of debt the government needs to issue to pay for all the stimulus programs. The risk is that investors will require significantly higher yields to continue purchasing an expanding supply of bonds. Strong demand from both domestic and foreign investors at this week's 3-yr, 10-yr, and 30-yr Treasury auctions … (0 comments)

July 8th Mortgage Market Wrap-up - 07/08/09 03:51 PM
MBS prices are up +13/32 (FNMA 30-yr 4.5 at 100.69), above the initial price level at +1/32, and near the high for the day.  No economic data came out today. Extremely strong demand for the 10-yr Treasury auction lifted MBS markets, and foreign investors purchased 44% of the total. Oil prices fell $3 per barrel to $60 per barrel. The Dow is up 15 points. Jobless Claims will be released tomorrow at 8:30 et. There will be a 30-yr Treasury auction at 1:00 et.
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July 7th Mortgage Market Wrap-up - 07/07/09 05:05 PM
MBS prices are up +6/32 (FNMA 30-yr 4.5 at 100.28), above the initial price level at +1/32, and at the high for the day.  No economic data came out today. Weakness in the stock market helped MBS markets. Demand for the 3-yr Treasury auction was relatively strong, but the yield was a little higher than expected. Foreign investors purchased 54% of the total. Also today, there was mounting speculation about the passage of a second round of fiscal stimulus before the end of the year. The Dow fell 160 points, to its lowest close since April 28. No economic data will be … (0 comments)

July 6th Mortgage Market Wrap-up - 07/06/09 04:54 PM
MBS prices are up +4/32 (FNMA 30-yr 4.5 at 100.09), above the initial price level at -5/32, and at the high for the day. It was a quiet session, and MBS prices drifted higher for most of the day. The ISM Services index came in at 47.0, above the consensus forecast of 46.0. Oil prices fell $3 per barrel to $64 per barrel. The Dow is up 50 points. No economic data will be released tomorrow; there will be a 3-yr Treasury auction at 1:00 et.
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The Weeks Past and Future - 07/02/09 04:50 PM
The Unemployment Rate climbed to the highest level since 1983 April Pending Home Sales rose for the fourth straight month The European Central Bank (ECB) held rates unchanged HUD announced that the LTV requirement for the Making Home Affordable plan will be raised to 125% from 105%   Future
Treasury auctions may have the greatest impact on mortgage rates next week, with auctions on Tuesday, Wednesday, and Thursday. It will be a light week for economic data. ISM Services will be released on Monday. The Trade Balance, Import Prices, and Consumer Sentiment will come out on Friday
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Employment Report Sinks Stock and Rates Moderate - 07/02/09 04:44 PM
There was very little daily movement in mortgage rates during the holiday-shortened week, and they ended the week nearly unchanged. The economic news during the week contained few surprises.
Following better than expected results for May, investors were closely watching the June Employment report for clues about the timing of any economic recovery. Thursday's data showed that the economy lost -467K jobs in June, and the Unemployment Rate rose to 9.5% from 9.4% in May. Average Hourly Earnings, a proxy for wage growth, rose at a slim 2.7% annual rate. High unemployment and slow wage growth have caused consumers to save … (0 comments)

July 2nd Mortgage MarketWrap-up - 07/02/09 04:42 PM
MBS prices are up +3/32 (FNMA 30-yr 4.5 at 100.07), above the initial price level at +2/32. Today's weaker than expected Employment data helped MBS markets and hurt the stock market. The Dow is down 180 points. For the week, MBS markets gained about +5/32. MBS markets closed early at 2:00 et today and will be closed tomorrow.
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July 1st Mortgage Market Wrap-up - 07/01/09 04:37 PM
MBS prices are up +6/32 (FNMA 30-yr 4.5 at 99.88), above the initial price level at -7/32.  Today's economic data all came in very close to the consensus forecasts. April Pending Home Sales rose for the fourth straight month, increasing slightly from March. Pending Home Sales are a leading indicator for the housing market. The ISM index rose to 44.8 from 42.8, the highest level since August 2008. Construction Spending fell -0.9%. The Dow rose 50 points. Tomorrow, the Employment report will come out at 8:30 et. Jobless Claims and Factory Orders will also be released. An ECB meeting will take place. MBS … (0 comments)