business: The Week in Review (October 15, 2007) : What to Watch For - 10/16/07 10:35 PM
The economy appears to have shrugged off August's credit market turmoil and is continuing to expand. This pushed mortgage rates higher last week as market players move money into stocks and hope to capitalize on the Dow Jones rally.
After the Fed's last meeting, the central bank lowered the Fed … (2 comments)
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business: Jumbo Mortgage Rates Shed Some of Their Risk, Rates Fall - 10/10/07 11:41 AM
As a sign that some normalcy is returning to mortgage markets, the premium attached to jumbo mortgage rates is getting smaller.
A "jumbo"-sized loan is one that exceeds $417,000 on a single-family residence, among other criteria.
Conforming 30-year fixed rate mortgages and jumbo 30-year fixed rate mortgages tend to … (11 comments)
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business: The Week In Review (October 9, 2007) : What to Watch For - 10/09/07 03:58 PM
As expected, the big news last week was the Non-Farms Payroll report. What wasn't expected, though, was the strength of the report. Mortgage rates ended the week on a large up-tick.
110,000 jobs were created in September, according to the Bureau of Labor Statistics. This exceeded Wall Street expectations by … (1 comments)
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business: How Today's Employment Data is Hurting Mortgage Rates - 10/05/07 09:32 AM
On the first Friday of each month, the Bureau of Labor Statistics releases its employment report for the United States.
Last month, the jobs report showed that the economy actually lost jobs for the first time since 2003. The total loss of jobs equaled 4,000 and contributed to the … (6 comments)
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business: The Week in Review (October 1, 2007) : What to Watch For - 10/01/07 11:30 AM
Even as home sales fall nationwide, the economy continues to move forward.
Year-over-year inflation as measured by Personal Consumption Expenditures registered 1.8%, well within the Fed's tolerance levels of 1-2% and suggesting that the economy is in "Goldilocks" mode -- not too hot and not too cold.
Many economists had … (2 comments)
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business: Americans Will Spend $179 Million More on Gasoline Today than One Year Ago - 09/27/07 03:37 PM
Economists worry about rising oil prices because it tends to generate higher pump prices for Americans. With more money spent on gasoline, there's (theoretically) less money available to spend on goods and services.
Today, GasBuddy.com says that the average price for a gallon of unleaded gasoline is $2.792, up … (16 comments)
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business: What Happens on the National Real Estate Scene Shouldn't Matter to You - 09/26/07 05:05 PM
The National Association of Realtors® released its monthly Existing Home Sales report for August 2006 and, as usual, you should be ignoring it.
The report discusses real estate on a national level and we all know that real estate is a local phenomenon.
It's not that the report isn't helpful … (10 comments)
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business: Do you read every article in the newspaper or in a magazine? - 09/24/07 11:41 PM
Probably not. So, how do you decide which ones to read? By the headline, of course. The headline first gets you interested, and then you read for more details.
And a good headline is exactly how you can increase readership of all your ads.
Have an interesting headline in every ad … (6 comments)
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business: The Week In Review (September 24, 2007) : What To Watch For - 09/24/07 04:18 PM
In a semi-surprise move last week, the Federal Reserve lowered the Fed Funds Rate by 0.500%.
The Fed wants to prevent a dramatic economic slowdown that started in the housing sector and appears to be spilling over into other sectors now, too.
According to some pundits, the half-point FFR drop was … (2 comments)
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business: Want More Proof that the Fed Doesn't Control Mortgage Rates? - 09/21/07 09:08 AM
For more proof that the Fed does not control mortgage rates, consider this:
In the immediate aftermath of the Fed's decision to lower the Fed Funds Rate by 0.50%, mortgage rates improved by about 0.25% on average.
But, in the two days since, mortgage rates have not only given back those … (8 comments)
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business: How Prime Rate Relates to the Fed Funds Rate - 09/20/07 09:07 AM
Prime Rate is currently 7.750%.
Prime Rate is the "shorthand" name for the Wall Street Journal Prime Rate, a variable interest rate that is used in pricing many types of consumer loans.
These loans include:
Home equity lines of creditCredit card loansAuto loans Prime Rate's variable nature is tied to the … (7 comments)
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business: Making English out of Fed-Speak (September) - 09/19/07 09:11 AM
The Fed lowered the Fed Funds Rate by 0.50% yesterday. A rate decrease was expected by most market participants, but the 50 basis points movement seemed to catch some players off-guard.
Mortgage rates dipped in the wake of the announcement, but the real winners are homeowners with balances on their home … (0 comments)
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business: How the Fed Will Disappoint No Matter WHAT it Does Today - 09/18/07 08:54 AM
It's all eyes on the Fed today; the market anxiously awaits the central bank's 2:15 P.M. ET press release.
Some of the market bias towards a 0.50% rate cut has decreased in favor of a 0.25% cut. This shift is largely psychological.
Markets are trying to "get inside … (3 comments)
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business: The Week in Review (September 17, 2007) : What to Watch For - 09/17/07 09:17 AM
The volatile path of mortgage rates last week followed the changing expectations for Tuesday's Federal Open Market Committee meeting.
The FOMC sets the Fed Funds Rate, a benchmark interest rate upon which Prime Rate is based.
According to Federal Funds Rate futures, there is a 94 percent chance that the … (4 comments)
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business: What Would it Take for YOU to Feel the Pinch of Higher Gas Prices? - 09/14/07 08:48 AM
As crude oil crossed $80 a barrel Thursday, the Wall Street Journal ran an interactive poll with its readers.
What sustained price for gasoline would cause you to cut back on other household spending?
The graph above shows the on-going results of the non-scientific study. You can chime in, too, at http://forums.wsj.com/viewtopic.php?t=805.
… (10 comments)
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business: What the Price of Gold Says about the Economy - 09/13/07 09:33 AM
Headlines today read that the value of gold is nearing its all-time high (adjusted for inflation). The lay people would ignore this story, but those in the know understand that the price of gold is usually reflective of the state of the global economy.
The spot price of gold tells a lot … (0 comments)
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business: Why Mortgage Rates Fell BEFORE the September 18 Fed Meeting - 09/12/07 06:02 PM
Mortgage rates "come from" one place only: the prices of mortgage bonds as determined by investors.
The higher the price, the lower the corresponding return, or rate.
Bonds -- like stocks -- are traded as securities. An investor may buy Microsoft stock if he thought the company's future looked bright, … (8 comments)
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business: The Week In Review (September 10, 2007) : What To Watch For - 09/10/07 09:30 AM
Weak employment data pushed mortgage rates lower last week. Against expectations of 110,000 new jobs created in August, last Friday's Non-Farm Payrolls report showed a loss of 4,000 jobs.
The story made headlines all over the country this weekend but its connection to mortgage rates is not always clear. Here's how … (2 comments)
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business: How Today's Jobs Report Impacts Mortgage Rates - 09/07/07 10:15 AM
This morning, the government reported that the U.S. economy lost 4,000 jobs in August. Led by losses in manufacturing and construction, this is the first time since 2003 that the economy has failed to add jobs in any given month. Markets had been expecting a job gain of roughly 110,000, but … (4 comments)
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business: Traders Predict The Fed Funds Rate Future Using Options - 09/06/07 11:10 AM
The Federal Open Market Committee meets September 18, and traders are aren't quite sure what to expect with respect to the Fed Funds Rate. Will the FFR stay unchanged? Will it FFR decrease? If it decreases, by how much? These are questions that are perplexing market participants. Luckily, we can measure … (2 comments)
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business: If Interest Rates Go Back Up to 18%, What Will You Do? - 09/05/07 11:12 PM
We all know that real estate is a seasonal business. When the economy is good, real estate is booming. When things slow down or when rates go up, real estate goes on life support.
Do you have a second stream of income to protect you not only from the economy, but … (18 comments)
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business: An Appetite For Jumbo Loans Returns - 09/05/07 09:20 AM
Yesterday was a rather drab day in mortgage circles -- not much happened and mortgage rates idled. The bigger story was how liquidity appears to be slowly returning to some areas of the beaten-down mortgage market.
Specifically, liquidity is returning to prime, fixed-rate, full documentation jumbo loans and pricing appears to … (2 comments)
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business: The Week In Review (September 4, 2007) : What To Watch For - 09/04/07 11:55 AM
Federal Reserve Chairman Ben Bernanke took to the pulpit Friday in Jackson Hole, but his remarks made little impact on mortgage bond trading.
The Fed is aware of economic issues related to housing and mortgage debt, Bernanke said.
He implied that the Fed wants more evidence that inflation has slowed … (5 comments)
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business: How The Stock Market Rally Changed Mortgage Pricing For The Worse - 08/30/07 09:12 AM
Mortgage rates unexpectedly increased yesterday afternoon as the U.S. stock market staged a late rally.
By the end of the day, the Dow Jones Industrial Average (DJIA) was up 1.9 percent, or 247.77 points.
This is a typical pattern.
When stocks are moving higher, investors want to ride the … (6 comments)
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business: What's The Existing Home Sales Report Got To Do With You? Nothing. - 08/28/07 12:41 PM
When the National Association of Realtors® releases its monthly Existing Home Sales report, people tend to watch every word, fact and figure in the statement in hopes of decoding the real estate market.
It's all wasted energy.
It's impossible to use the NAR report in everyday living because the NAR report … (4 comments)
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business: The Week In Review (August 27, 2007) : What To Watch For - 08/27/07 11:00 PM
This week is data-heavy so markets will finally get to focus on fundamentals instead of fear.
For the past two weeks, uncertainty about the economy has led to psychologically-driven mortgage interest rate movements.
Rising defaults devalue mortgage holdings and many investors are now expecting the defaults levels to rise … (0 comments)
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business: New Homes "Sold" Is Not The Same As New Homes "Closed" - 08/23/07 09:56 AM
With tomorrow morning's New Home Sales report, markets will get a look at the number of newly-constructed homes sold in July.
The figure is expected to be in the 825,000 range. This is lower than June's 834,000 figure.
But -- as always -- there is more to the story.
When the … (3 comments)
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business: Like The Fed Funds Rate, The Fed's Discount Rate Does Not Control Mortgage Rates - 08/21/07 02:03 PM
Friday, the Federal Reserve lowered its Discount Rate by 0.50% in an effort to preserve liquidity among our nation's banks.
This has nothing to do with mortgage rates that people like you and I get for our homes. Well, not directly at least.
The Discount Rate is the rate at which … (6 comments)
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business: Why The Mortgage "Crisis" Is Not A "Crisis" For Everyone - 08/17/07 12:26 PM
Another day, another batch of Gloom-and-Doom stories in the news. Remember to keep a level head -- the media's job, in part, is to sell newspapers and capture eyeballs. Using the word "crisis" repeatedly is one way to meet that goal.
A few facts to keep it all in perspective:
There … (5 comments)
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business: What Do You Think? - 08/16/07 10:18 AM
I recently learned of a loan officer who does business only with people who refer his business.
Long story short, he reminds the owner of busineses he frequents that 1) he is a mortgage lender and 2) since he gives them business by patronizing their establishment, he "expects" them to give … (6 comments)
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business: The Fed Funds Rate Does Not Directly Impact Mortgage Rates - 08/14/07 10:28 AM
It's been on the news a few times lately, so let's address a key misconception about the Fed and its relationship to mortgage rates.
The markets now anticipate that the Fed will lower the Fed Funds Rate within the next 45 days. As a mortgage rate shopper, there's not much reason … (9 comments)
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business: What's The True Risk In Mortgage Lending? It's Anyone's Guess Right Now. - 08/12/07 05:46 PM
Any security -- stock, bond, or otherwise -- has a specific risk associated with it. Based on that risk, an investor decides whether or not the price is worth paying. If the security is a "good value", an investor will buy it. If not, the investor will pass.
Until recently, mortgage … (2 comments)
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business: National City Mortgage Reiterates its Strong Position and Continuing Commitment to the Mortgage Industry - 08/10/07 09:59 AM
August 10, 2007 - Reflecting recent conditions in the mortgage markets, several media reports have questioned the strength of National City Mortgage and its future participation in the mortgage industry.
National City Mortgage derives strength from its status as a subsidiary of National City Corporation (NYSE: NCC), one of the … (2 comments)
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