Last week ended up on the positive side with a gain of 12/32nds on 30 year Fannies which is a noticeable change on a rate sheet. That makes 3 positive weeks in a row. Over all we have been in a tight range all year with hic ups along the way. I expect more of the same in the near term as Uncle Sam will continue to buy mortgages as necessary to calm the market down. So far Uncle Sam has purchased over $800 Billion in Mortgage backed securities and that number is expected to rise to $1 Trillion by time they step out of the mortgage market in early 2010. This buying has been the Fed's way of keeping rates low since they have no way of dropping Fed funds any lower. It is not likely we will see the Fed even consider an upward move in rates until the end of the 2nd quarter of 2010, at least that's what the financial wizards are saying this week.
This is a busy week of financial calendar, here is what to look out for:
MondayNovember 16: October retail sales expected +0.9% ex auto +0.4%. This number pretty much came out in line with expectations and over all the market had a nice gain for the day
TuesdayNovember 17: October PPI expected +0.5% with a core of +0.1%. The UP piece of this number is clear to any of us filling up our gas tank. Energy and food prices are up ... but the core rate is staying subdued which the market should like if things come in as forecast.
Tuesday: October Industrial Production and Capacity Utilization expected +0.4% and 70.8. It appears that manufacturing is up a bit but the capacity is still low enough to keep prices from climbing. As capacity increases you can expect prices to climb which is the typical supply and demandequation. As this stands it is not likely to move the market.
Wednesday November 18: October CPI expected +0.2% with a core of +0.1%. if the core stays at or below 0.2% it is a good news scenario for mortgage rates
Wednesday: October Housing starts and Building permits Up 1.7% and up 0.9%. It continues to look like new construction has hit bottom.. it will take a few more positive months to prove this to the market before it exerts any pressure on the mortgage world.
ThursdayNovember 19: Initial jobless claims expected up 3,000. I don't think that I have ever seen Thursday's number move the market. But it is always on the calendar! UE remains high and it is a lagging indicator, it will take some time before companies are secure enough to hire.
Thursday: October LEI expected +0.4%. This is a step down from last month. LEI is a very forward looking number and the dip down is supportive of steady to lower rates.
Friday: No news to worry about.
The biggie of the week is a coin toss, it could have been retail sales, that ended up being a good number for the credit markets. There are a lot of inflation pieces in CPI PPI and LEI which have the potential to push rates one way or another if there is a shocker. It would take a significant deviation in the real number vs the forecast number to have any significant effect on rates. I think we will need to look mostly to the stock market for direction. If stocks have a strong week it can be bad news for mortgage rates. So far I think it would be safe to say we may see a slight improvement by weeks end... Time will tell if my crystal ball is clear or not!
Last week ended up being a pretty flat week with a few bounces along the way. The highlight of the week was Fridays Employment report that was quite a bit worse than expected. It did not cause a big improvement as one would have thought, it really only served to wipe out losses from earlier in the week and for the week we were only 3/32nds to the positive side on Fannies which is pretty much an unchanged week.
This week has its bumps and grinds to deal with as well, here is what we have in store:
Monday November 9: First Treasury Auction of the week with $40 Billion in 3 year notes. This Auction went off as expected at about 1pm with strong bidding. It ended up being a market neutral event and Fannies are trading slightly to the positive side.
TuesdayNovember 10: Auction #2 with $25 Billion in 10 year notes. Keep your fingers crossed and hope this one is well bid. It is expected to be well bid, and if so it will be more of a "non event" in the mortgage world. If it is not well bid we may see a ripple effect sell off in mortgages that will not be good news for mortgage rates.
Wednesday, November 11: Happy Veterans Day. The market is closed for Veterans day.
Thursday, November 12: Initial Jobless claims expected down 2,000. Not likely to be a market mover.
Thursday: Auction number 3 with $16 Billion of 30 year bonds. The bidding here will be a sign of how the investment community sees the economy. If they see things as "the worst is behind us" they will demand a higher yield. If they see things staying weak, it should be well bid. This one is entirely up in the air. If well bid it will be a neutral event, if poorly bid it is likely that mortgage rates will climb.
Friday: nothing exciting to report on.
Well this week is obviously being lead by the Treasury. I think the Mortgage market will also look toward the stock market for direction. Good days for stocks usually end up being bad ones for mortgages as the credit markets thrive on bad news. The concern with the auction is the Fed's $300billion check book is closed and it is not likely that the Fed will be buying Treasuries anymore. For most of the year the Fed has helped to keep rates low by being one of the "investors" buying up Treasuries and Mortgages... so lets hope for strong market participation, that would be the best news for the interest rate world. My gut feeling is we will see a bumpy but fairly flat week by time the dust settles.
Last week had its share of fairly large up and downs, but ultimately we ended up with a pretty decent gain for the week with Fannies trading up 19/32nds by the close on Friday... That translates to a noticeable improvement in Mortgage rates last week (but some bumps and bruises along the way) Most of the improvement in Mortgages was due to the sell off in the stock market.
Well this week has its share of challenges. Here is this weeks calendar:
MondayNovember 2: (can you believe it is November already??) October Institute of Supply Mgt was expected at 53.0. Well we lost about 7/32nds today. which is not a good way to start the week!
Tuesday November 3: DON'T FORGET TO VOTE!
Tuesday: September Factory Orders expected up 1%. Not likely to do much more than take up space on this page.
Tuesday: First day of the Fed Meeting.
WednesdayNovember 4: October Institute of Supply Mgt Supply index expected 51.8. If this comes in near expectations it is not likely to move rates. If it pops higher than 52, we most likely will see rates bump up a bit.
Wednesday: Fed meeting over at 2:15. No one expects the Fed to change rates... The analysts will certainly read every word of the post meeting statement for hints at what is coming. This is most likely a non event unless we are surprised by an exceptionally weak or strong view of the economy. Facts are the economy is slowly improving. The question is: "how fast?" and will the Fed move sooner than anticipated.
ThursdayNov 5: Initial Jobless claims expected down 6,000. Zzzzzz look at Friday. This is just a shadow in comparison to Friday's number.
Thursday: Third Quarter Productivity expected +5.5% and Unit Labor costs -4.5%. Productivity up and costs down... No fear of inflation in this report! But unfortunately not enough to move interest rates down.
Friday November 6. October Non farm Payroll expected -175,000 and Jobless rate 9.9% and an average 33.1 hour work week. The Jobless rate is up, but the non farm number has been improving based on the beginning of the year. It is not likely we will see a bump up in rates with out a 9.7% jobless rate and 150k job loss. As forecast this is not likely to do much more than be supportive of steady interest rates.
Friday: September Wholesale Inventories expected -1%. Even with this being an old number it will be looked at to see if there is any demand in wholesalers rebuilding inventory. This is most likely going to swept under the rug since it comes out right after the employment report.
The biggie of the week is hands down Friday's employment report. Leading into Friday's report we are most likely going to see stock market fluctuations be the driving force in the credit markets this week. If we have improvement in stocks we will lose some ground in the credit markets.
That's this weeks movers and shakers, Have a great week!
Facebook is the world's largest social network. Disregarding this, people share all kinds of information on Facebook without thinking about who's seeing it or what effect their comments and pictures might have on them in the future. One study revealed 30% of employers use Facebook to vet job applicants. Those goofy party pics could cost you more than your dignity! So what can you do to protect your privacy on Facebook? The site itself offers lots of privacy controls and security features. Here are five steps to take to activate them:
1. Create Friend Lists Make a Work list for business, an Acquaintances list, and a Family list for relatives and close friends. Click Friends on the Facebook homepage; click Friends under Lists, then Create New List, and type in your members.
2. Set Up Who Sees What on Your Profile Mouse over Settings on the Facebook homepage and click Privacy Settings. Click Profile Privacy. Beneath each section -- basic info, personal info, status, etc. -- specify who gets to see it. This is where Friend lists come in handy. Enter Only Friends to block out the rest of the world (like employers). Edit Custom Settings lets you block specific people or lists.
3. Restrict Access to Your Address and Phone Number As above, go from Settings to Privacy Settings to the Profile Privacy page. Click Contact Information tab at the top. Use the drop-down lists to determine who sees or doesn't see things like IM Screen Name, Mobile Phone, Other Phone, Current Address, Website, or Email.
4. Set Up Who Can Find You on a Facebook Search This stops all those friend requests from old buddies. Click on Settings, then Search, which takes you to Search Privacy, where you can specify who can find you. Under Search Visibility you can choose Everyone, My Networks and Friends, Friends of Friends, or My Networks and Friends of Friends. To keep strangers from finding you, choose Only Friends. You can also specify what info displays in your search result...profile picture, friend list, etc.
5. Block Personal Info from Unknown Applications Without knowing it, you could be sharing personal information with various Facebook applications and their developers. To block them, mouse over Settings, choose Privacy Settings, click Applications, then click the Settings tab next to the Overview tab. Check and uncheck boxes next to your personal info -- picture, education, religious views, etc. This determines what your friends' applications can see about you.
This is not a complete guide to privacy and security on Facebook. But these five steps will start to create a more private and secure environment for yourself and your family on this huge social network. Better to be safe than sorry!
The last 3 weeks have not been good ones for the Mortgage world. Last week was a crazy up and down week that ended up only slightly negative by the close on Friday, but bumpy enough along the way that it left many feeling queasy. almost every day last week had some VERRRRY negative moments but the market was able to come back to almost even each day.
The initial sell off a few weeks ago that has rates up now was mostly because of stocks jumping above the 10k mark. This piece of positive news was not taken well in the credit markets. and if you read any of my blogs on the subject, you will know that Good News is BAD news for interest rates.
This weeks calendar is a busy one:
MondayOctober 26: Treasury auction of $7Billion 5 year IIS. This is an inflation indexed security so it is typically well accepted. Ahead of the auction the market was not doing well, but it regained some of its ground since it started.
TuesdayOctober 27: October Consumer Confidence expected 53.5. It really doesn't matter what consumers think. What matters most is what they are actually doing. So this number is not expected to move things in the market. You can feel bad, but still spend money!
Tuesday: Second auction of the week with $44Billion in 2 year notes. The shorter term notes have been fairly well received, and this one is likely to draw decent bidding from foreign and domestic investors. Not likely to move things today.
WednesdayOctober 28: September Durable Goods Orders expected +1% ex auto +0.7%. There have been surveys that may point towards a surprise in factory activity. If we get surprised with a number stronger than the forecast here it will not be a good day for rates.
Wednesday: Auction #3 for the week with $41Billion in 5 year notes. This one is a nail-biter. We need this to be well bid. There is enough supply here that a poorly bid auction will send ripple effects through the entire credit market... (which is NOT good for mortgage rates). If it is well bid we will see steady rates.
ThursdayOctober 29: 1st estimate of third quarter GDP, expected +3.2%. As I have mentioned in previous blogs... Inventory has been bled dry over the first half of the year, that is why this number looks so strong, it is due to businesses replacing inventory. As forecast it is most likely supportive of steady to possibly a slightly higher rate, it would take a number weaker than 2.5% to help bring rates lower.
Thursday: Initial Jobless claims expected down 6,000. likely to be supportive of steady rates.
Thursday: Auction #4 with $31 Billion in 7 year notes. This one may be more important than the 5 year. We will see what the investment world thinks about prospects for the economy into the future based on how well bid this auction is. If poorly bid, that means they think the economy is improving and want a higher yield to commit to a rate for 7 years. So that "Good News" is a bad thing for interest rates. This one could fall on either side of the fence.
FridayOctober 30: September personal income expected to be flat, Spending to be -0.5% and PCE index +0.2%. The PCE piece of this is the exact number that Trumps Tuesday's confidence number. if consumption is up more than forecast it will not be good. But a weaker PCE will definitely be supportive of lower rates.
The biggie of the week has to be the record $123 Billion in the auctions. Supply is always an issue in any market. So far this year we have been lucky with enough activity and enough investment in the auctions to keep rates from being hurt along the way. Keep your fingers crossed for these. The numbers themselves are most likely priced into the market and not likely to be big movers unless there is a surprise. The Auction is an unknown and unpredictable event that we will have to wait and see.
The trend over the last 3 weeks has bee towards higher rates, could be be due for a positive week? It is hard to tell. I would play it safe and Lock in.
Finally, some good news in the form of relaxed guidelines.
This is some great news. PMI Companies have caused many of the guideline changes we have experienced over the past few years since they were not willing go offer PMI on anything that had risk at all.
Just a few weeks ago we got news that we can do 10% down second homes. Here are the requirements:
720 Minimum credit score
$417,000 Max Mortgage
Even if you don't dabble much in the Vacation Home market, this is a great sign. This news came from one of the more conservative PMI Companies. The fact that they are willing to insure vacation homes shows that they have a renewed confidence in the Real Estate Market. This confidence must mean that they see a stable improving market or they would not add any risk to their portfolios
I don't even want to talk about last week, but I guess I need to.Friday was a horrific day in the credit markets and fannies lost 29/32nds by the close of business. That was a total loss of 26/32nds for the week. that may not sound like much, but that is an ugly number! WHY? Well it had a lot to do with comments that came from the Fed Chair. Bernake said that the Fed is ready to raise short term rates when they see sustainable growth. Here is the fun part: This is nothing new, this is what he has said over and over this year.. Basically "if we need to we will". This time the market seems to have taken the words and read between the lines and now think we will see the Fed begin to raise rates in the first quarter of 2010. prior to Friday they seem to have thought things would stay the same until the 3rd quarter of 2010. If you have been reading any of my blogs you may remember me saying I thought we wouldn't see any sustainable growth until the end of the first quarter at that time we will probably see the Fed begin to move.
Well, if you were wondering why the world blew up on Friday, that is why. the good news is we gained back 11/32nds when the market opened and we have pretty much stayed there most of the day.
Here is what we have in store for this week:
Monday: the market was closed, that's why I am a day late on this!
Tuesday October 13, 2009: No significant news today, but a happy credit market and some improvement in rates
Wednesday: I will be speaking at the OCBR's fall round table in Toms River.
Wednesday October 14: September Retail sales expected -2.1% ex auto +0.2%. This is a pretty weak number, but it was the end of the cash for clunker program and is likely to be dismissed because of that.
Wednesday: August Business inventories expected -0.9%. August numbers are old and not likely to be market movers. But eventually the decrease in inventories will lead to increased production to re-stock the shelves, so the inventory number doesn't matter that much now, but it may effect a production number down the road.
Wednesday: September Fed Meeting Minutes released. Expect this report to be read, and re-read looking for clues. It is not likely that there will be anything new, but a hint at sustainable growth will be bad for rates (good news is bad news in the credit markets folks)
Thursday, October 15: September CPI expected +0.2% with a core of +0.1%. If the core stays below +0.2% it should be a non event. If we get surprised with a big increase in the core CPI we will see a sell off in the credit markets leading to higher rates.
Friday, October 16: September Industrial Production expected +0.2% and Capacity Utilization 69.7. This bump up is mostly inventory rebuilding, as forecast it is not a sign of a boom, so not a likely market mover.
Well, that's what we have in store for the week. The biggie is most likely the CPI number on Thursday. If this is as forecast it is likely to be a quiet week for rates and we may actually see a little improvement in the market after the big sell off last week. We do appear to be a bit over sold and it is not unusual to get a bit of a bounce back. I just doubt the bounce back will be to levels as "nice" as we had unless we are surprised by an exceptionally weak number or Fed comments that counteract the Friday Leak.
By the end of the week I bet we look pretty much unchanged, but wouldn't be surprised by a slight improvement.
Last week was an overwhelmingly "happy" week for mortgages after an unchanged day on Monday we ended up with a gain of 29/32nds in Fannies by time the closing bell rang on Friday. This is mostly because word leaked out that The Fed stimulus will not abruptly stop as we originally thought in October. It is more likely to taper off over the next few quarter... Great news since Uncle Sam will stay in the market as a buyer.
This week is a busy one with everything crunched into a few days at the end of the week.
Here is what we have on the schedule:
Monday and Tuesday September 28 & 29th: No News days. In the absence of any news we have continued on last weeks rally with the market up 7/32nds as we approach the close.
Wednesday, September 30: final estimate of the second quarter GDP, expected -1.1%. The economic decline is tailing off, but the inventory reduction this year will make things look better as industry tools up to replace inventory. This number would have to be significantly stronger to cause an upward move in rates.
Thursday, October 1: ( OCTOBER ALREADY???) September Personal income, Spending and PCE expected +0.1%, 1.0% and +0.1%. The consumption index is always the biggie here since it truly shows what the consumer is doing. As forecast it is supportive of steady to possible lower rates.
Thursday: Initial Jobless claims, expected up 5,000. Not a mover especially since Friday is the big number.
Thursday: Bernake (supreme ruler of the money world) testifies on financial reform in front of the House Finance Committee. Ben will probably be grilled by the panel like a pork chop! Investors will look for any new insight but it is not likely that there will be anything new released in this format.
Thursday: September institute of Supply mgt, Manufacturing index expected at 54.0. This should be factored into any trading already, so it is not a likely market mover.
Friday October 2nd: The jobless report with Non farm payroll expected at -188,000, Un Employment at 9.8% and average hourly earnings at +0.2%. While we continue to see businesses lay off workers it is not at the same pace as the rest of the year andthe non farm number is reflective of that. The average loss in the first quarter was 691,000 jobs/month, so you can see it is much better now. This report should be supportive of steady rates unless we see a loss of 150,000 jobs or less and the jobless rate come in at 9.7% or better. If it becomes a good news report, rates WILL go up, almost instantly.
Friday: August Factory Orders expected +1.1%, This is an old number at this while the forecast is quite a bit weaker than last months report, it is not likely to do much than use up toner if you print this.
Well the week has started off quite well, and we have a lot to chew on this week. I expect we will probably see fairly quiet trading for most of the week unless the stock market has significant swings up or down. Stocks up will be bad for rates, stocks down will be good for rates.... If we have a calm stock market it will be quiet in the credit markets (bonds and mortgages) as the markets await Friday's Employment report which is most likely the "biggie of the week" With no surprises in the data, we may actually see slight improvement in rates this week, but a surprise will likely cause a knee jerk reaction to the up side.
I hope you find these reports to be useful, as you can see there is a lot more than just an individuals whim that makes the Mortgage Rate world move.
I firmly believe that we will all look back on 2009 and say "I wish I got that house back in 2009!"
It is truly a buyers market.
More inventory than we have seen in years... So Many choices for buyers.
Interest rates are at very affordable levels
Sellers are becoming more willing to negotiate
Lower prices than we have seen in years
The median price of homes in Monmouth and Ocean counties are at a low point now and appear to be stable
What if you have a home to sell?
Worried about losing money on the sale of your home? You have to take into account the money you will save when you buy your new home.
Here are some completely contrived numbers to illustrate the example:
If your home was "worth" $225,000 in 2004 and you have to sell it for closer to $200,000. In your mind you feel like you are losing $25,000. That is NOT the case. First off, Hind site is 20/20, and you can kick yourself for not selling at the high forever.
You pick up much more when you move up to your next home. If the home you want to buy is $300,000 and the numbers work out in a similar fashion to the above number, you effectively buy your next house at a $37,500 discount. So in one scenario you see yourself as losing $25,000 but on the other you save $37,500... Thus realizing a $12,500 gain by buying the more expensive house at a discount...
So NOW is a great opportunity to buy if you plan to keep the house for the long run, I doubt you can go wrong.
More reasons NOW is the time to buy:
The average rate for a 30 year mortgage over the past 20 years is about 7.5%, over the past 40 years, 9.5%.. but NOW we have rates near historic low levels, in the low 5's depending on credit score etc.
First time buyers only have about 2 months left to buy and close on a home and Uncle Sam will give you $8,000 via a tax credit. (there are a few restrictions on the tax credit, but nothing crazy)
Rates may start to climb in October as the stimulus money runs out
Contrary to popular belief: It is not hard to get a mortgage today!
I could go on, but I am convinced that you cant go wrong buying a home now if you plan to keep it for a few years.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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