| |
mortgage rates: Looking Back And Looking Ahead : March 24, 2008 - 03/24/08 10:32 AM
Conforming mortgage rates edged slightly lower for the second week in a row.
Mortgage rates fell for two main reasons:
The Federal Reserve offered fiscal support for troubled mortgage-backed securities A government group gave Fannie Mae and Freddie Mac permission to lend more of money to American homeownersThese two actions combined to make mortgage-backed securities safer for mortgage bond investors and when mortgage bonds are safer, their required rate of return (i.e. interest rate) comes down.
This is the financial concept of Risk vs. Reward in action.
Expect mortgage rates to be in flux and highly volatile again this week, however.
Aside from housing and consumer confidence … (0 comments)
|
mortgage rates: Expect A Fed Funds Rate Cut This Afternoon - 03/18/08 10:50 AM
The Federal Open Market Committee meets today and will issue a press release in addition to cutting the Fed Funds Rate at 2:15 P.M. ET.
The verbiage of the press release will be as widely watched as the rate cut itself because markets are curious about how far the Federal Reserve will go to lessen the impact of an economic recession.
With every Fed Funds Rate cut, recession becomes less likely, but the other side of the equation is that the probability of long-term inflation grows.
Like recession, inflation can be bad for the economy, too.
The Fed Funds Rate now stands at … (2 comments)
|
mortgage rates: Looking Back And Looking Ahead : March 17, 2008 - 03/17/08 08:30 AM
Mortgage rates fell last week on growing evidence of a recession, but far fewer Americans were eligible to take advantage.
Mortgage lenders continue to reduce product menus and that is leaving homeowners with fewer mortgage financing options than before.
As an added hurdle, Fannie Mae and Freddie Mac recently added "risk-based" fees on all conforming home loans, subjecting mortgage applicants to higher mortgage rates based upon:
Property Type Credit Score Loan-to-ValueSo, even though mortgage rates moved lower last week, for many homeowners, the cost of homeownership did not.
This week, the biggest scheduled news is the Federal Open Market Committee's Tuesday meeting.
It's widely … (0 comments)
|
mortgage rates: What High Oil Prices Mean To Mortgage Rates - 03/04/08 08:24 AM
After briefly exceeding its all-time high, oil closed Monday at $102.45.
Rising energy costs can lead to inflation because American Business eventually passes on its higher costs to American Consumers.
When consumers have to spend more money for the same amount of product, it's called "inflation".
Another way to look at inflation is like an erosion in the value of a dollar.
The presence of inflation causes mortgage rates to rise because mortgage debts are repaid in dollars. If those dollars are losing their value, the rates tied to those debts have to increase to "cancel out" the erosion.
This is why mortgage rates spiked … (2 comments)
|
mortgage rates: As The Fed Funds Rate Falls, 30-Year Fixed Mortgages Rise - 02/28/08 08:51 AM
Federal Reserve Chairman Ben Bernanke testified to Congress Wednesday, alluded to further rate cuts to support an ailing U.S. economy.
Already, the Federal Reserve has lowered the Fed Funds Rate by 2.250% since September 2007.
The graph at right comes from the Wall Street Journal and it highlights a very important correlation between the Fed Funds Rate and mortgage rates.
The correlation is that there is no correlation.
Since the Fed began cutting rates five months ago, mortgage rates on 30-year fixed mortgages are higher, as are jumbo mortgage rates. ARMs, however, are lower.
Especially noteworthy is how 30-year fixed rates started to spike as the Fed … (4 comments)
|
mortgage rates: Tuesday May Have Marked The Unofficial End Of Low Mortgage Rates - 02/20/08 10:07 AM
For homebuyers and homeowners expecting low mortgage rates this week, Tuesday marked the unofficial end to basement 30-year fixed mortgage rates.
According to the market analysts at BestInfo, Inc., the 30-year fixed rate measured its largest one-day movement in more than 10 years Tuesday.
Nationally, 30-year fixed mortgage rates increased 0.375%.
Here is the "real life" impact to mortgage applicants whose mortgage rates were not yet locked:
$150,000 mortgage: $37 increase to the monthly mortgage payment $250,000 mortgage: $61 increase to the monthly mortgage payment $300,000 mortgage: $73 increase to the monthly mortgage payment $400,000 mortgage: $99 increase to the monthly mortgage paymentARMs did not move as … (6 comments)
|
mortgage rates: Looking Back And Looking Ahead : February 19, 2008 - 02/19/08 08:48 AM
Early last week, mortgage rates rose on strong consumer spending and Warren Buffett's offer to assume $800 billion in debt from three major bond insurers.
Both reports were interpreted as signs of long-term strength in the economy, leading mortgage rates higher for long-term products such as the 20- and 30-year fixed rate mortgage.
Meanwhile, Fed Chairman Ben Bernanke painted a different picture about the economy's health.
In his testimony to Congress, Bernanke called attention to credit market weakness and alluding to a need for future Fed Funds Rate cuts.
The chairman's testimony, coupled with the worst consumer sentiment reading in 16 years, … (1 comments)
|
mortgage rates: Looking Back And Looking Ahead : February 11, 2008 - 02/11/08 08:45 AM
Mortgage markets are conflicted about the U.S. economy and the confusion is impacting home buyers.
If you've recently tried to lock a mortgage rate, you've probably experienced it personally.
On one hand, reports of plunging sales suggest that the economy is slowing more quickly than expected.
This is recessionary and tends to be good for mortgage rates. So, some days, rates have been down.
On the other hand, some pundits (including a Federal Reserve official) are saying that recent Fed cuts may stoke inflation in the second half of 2008.
This is inflationary and tends to be bad for mortgage rates. So, some days, rates have been … (2 comments)
|
mortgage rates: Rates Slide Lower after .75% Fed Rate Cut - 01/22/08 02:01 PM
As promised, last week was heavy on data and on drama. And mortgage rates continued their slide lower.
This week, by contrast, is devoid of data and markets are already digesting the Federal Reserve's surprise 0.750% rate cut this morning.
Mortgage rates are falling in response, but not because of what the Fed did as much as what the Fed implied by doing it.
The Federal Reserve does not control mortgage rates, per se, but it does exert an influence. This is because when the Federal Open Market Committee makes changes to the Fed Funds Rate, it is making … (5 comments)
|
mortgage rates: Which Leads Which Lower: Mortgage Rates Or The Fed Funds Rate? - 01/16/08 10:24 AM
It's a point that's always worth repeating:
Ben Bernanke and the Federal Reserve do not control mortgage rates
This is particularly relevant today as newspapers, television programs, and market pundits post that the U.S. is in the midst of a recession.
The latest evidence supporting that assertion is that Retail Sales grew at its slowest pace since 2002 -- the last time the U.S. was in a recession.
Many people fear recessions, but they are natural parts of a business cycle. As the nation's protector of the economy, though, the Federal Reserve can weaken a recession's impact on the economy by lowering … (0 comments)
|
mortgage rates: Americans Are $6.25 Billion More Wealthy Since September Because Of The Federal Reserve - 01/08/08 07:17 AM
Since September 2007, the Federal Reserve has lowered the Fed Funds Rate by 1.000%.
This has caused Prime Rate to fall by 1.000%, too. This is because the Fed Funds Rate and Prime Rate are directly related.
In mathematical terms, the relationship looks like this:
(Prime Rate) = (Fed Funds Rate) + (3.000%)
So, because Prime Rate is the interest rate upon which credit card rates are based, as the Fed Funds Rate falls, so does the cost of consumer debt.
This is how rate cuts spur the economy.
When the Federal Reserve lowers the Fed Funds Rate, … (1 comments)
|
mortgage rates: Why It's Not So Bad That Unemployment Reached Its Highest Rate Since November 2005 - 01/04/08 11:30 AM
On the first Friday of each month, the Bureau of Labor Statistics releases key data about the American workforce.
The report is officially called "Non-Farm Payrolls" but most people refer to it as the "jobs report".
The jobs report's influence on markets is palpable for two major reasons:
Consumer spending makes up two-thirds of the economyWhen more people are working, there is more consumer spending When consumer spending is strong, the economy expands. This tends to be bad for mortgage rates because a growing economy is at risk for inflation.
Inflation causes mortgage rates to rise, making home ownership more … (0 comments)
|
|
|
|
|
|
Deleted Person
Cruz Bay,
VI
More about me…
Make it easier to delete!
Email Me
Mortgage industry news and happenings that may affect you from a Twin Cities mortgage consultant.
 Links
Archives
|
;)
;)
