Weekly Wrap - Your Mortgage Market Update
July 21-25, 2014
Finally! I'm delivering on a Friday, as was originally intended & 
promised. If all goes well (aka, I'll try!) these reports will be a consistent place to check the direction and trends for interest rates and the mortgage market on a weekly basis.
The week of July 21 was not a quiet week, and although the market moved for different reasons than last week, we saw the same rollercoaster trend, which seems to be indicative of investors not knowing what to do. The way the market has shifted direction and moved wildly in opposite ways shows that investors are really struggling right now to make the right move.
The week began with bad news for rates. MBS climbed early in the day which looked to be a great start to the week for rates (and good news for originators, as we seek to get consistently below the 4% mark on 30 year fixed mortgages with no points), but the trend reversed throughout the day and the market finished nearly flat with where it started, giving up nearly all of the gains made. There was no economic data in play, so likely the market movements were due to uncertainty about the impact of global events (Middle East & Ukranian conflicts) on the market.
Tuesday brought us some mixed economic news but nothing that really shook up the markets. Housing had both good and bad reports - inventory is up month over month, but existing sales were down year over year. The markets did a little dance, but didn't move much in either direction.
Wednesday was a weird day. No economic news, a drop in the stock market, and a drop in the MBS market. Only modest losses and marginal gains to interest rates, it looked like traders were trying to bet on Thursday's economic news but weren't quite confident in a direction.
Thursday was a tough day for interest rates. Investors continued to sell MBS and before the day was done they lost 30 basis points (bps). Economic news came in slightly better than expected, and as a result rates suffered some.
TGIF. After a long week of volatility and rates rising some, Friday nearly erased all of Thursday's losses and allowed us to finish the week with mortgage rates similar to where we left off last week (aka VERY low). Trouble in the stock market, weak earnings reports, and trouble overseas gave investors reason to put funds into safe assets such as bonds. The DOW finished the week sub-17,000 which seems like a tough barrier to break through.
The marketplace is extremely volatile and unpredictable. My advice to clients is to lock in a rate if they are happy with their payment. There is much uncertainty in global politics and domestic markets that have investors unsure of where to move funds.
To see what's in store for the market next week, check out my Monday forecast blog which will lay out the possible market movers for the week of July 28-August 1. If you have questions on the mortgage market, products, rates, or anything else housing or finance related, get an immediate response by asking an expert.
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