Professional Home Staging and Photography Blog: May 2008

Mortgage Market Watch - May 26, 2008

Mortgage Commentary

Mortgage rates dipped last week to a two month low. But we'll likely see them bounce back up in response. Additionally, there is no indication they will go down any further. Inflation is the key driver here, despite the weak economy, and it's not letting up as the summer gets into full swing. I recommend getting a rate locked now, as they are still historically low.

When the stock markets lose triple digits and mortgage bonds don't blink, it's a pretty good sign we have greater odds for less bond demand - and higher rates. Still, there's no indication that rates are breaking out of the channel they've been trading in for weeks.

It is strange to say, but we should be cheering the lousy growth pattern. If the economy was moving upward, the additional demand would push inflation and interest rates higher. At present, all we can hope for is that the economy breaks inflation before inflation completely breaks the economy.

While overall mortgage interest rates managed a little improvement last week, surprisingly. However, rates have more or less been generally flat for weeks, and that stability is a welcome stance in a weary market. There's not much likelihood of a huge movement this week, but we may see rates rise a couple of basis points or so.

The Conference Board started this week's economic releases with their Consumer Confidence Index (CCI) May. It showed a weaker than expected level of confidence with a reading of 57.2 when it was forecasted to stand at 60.0. This was the lowest reading in 16 years, indicating that consumers are not very optimistic about their personal financial situations. This is considered good news for bonds and mortgage rates because it usually means consumers are less likely to make large purchases in the near future.

April's New Home Sales data was also released today, revealing a higher level of sales than was expected. However, today's report also revised March's sales downward. This means that sales were weaker than thought in March, but the month to month increase was fairly large. This is bad news for bonds because a weak housing sector usually translates into weaker economic conditions in general.

Tomorrow morning we will see April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show a decline in new orders of approximately 1.5%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth.

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.

Search today's mortgage rates anonymously. And, as always, you can call me at (508) 471-4144 with any questions about mortgage rates and to discuss your best loan options.

 

East Bridgewater, MA 02333
Phone: (508) 443-1332

Lew Corcoran, ASP®, IAHSP, IAHSP-CB
Accredited Home Staging Professional
Professional Real Estate Photographer

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Comment balloon 0 commentsLew Corcoran, ASP® • May 27 2008 11:18PM
Mortgage Market Watch - May 26, 2008
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Mortgage Commentary Mortgage rates dipped last week to a two month low. But we'll likely see them bounce back up in response. Additionally, there is no indication they will go down any further. Inflation is the key driver here, despite the… more
The Mortgage Interest Rate Lock Advisory - May 26, 2008
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Current Rates*: 30 Year Fixed - 6. 25% with Zero Points Jumbo 30 Year Fixed - 7. 75% with 5 Points 15 Year Fixed - 5. 875% with Zero Points FHA /VA 30 Year Fixed - 6. 25% with Zero Points *Rates and fees accurate as of 5… more
Does HUD Owe You a Refund?
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Anyone who has ever had an FHA insured mortgage may be due a refund on part of the mortgage's insurance premium or a share of the earnings. You may be eligible for a refund of a portion of the insurance premium from HUD/FHA if you: … more
Mortgage Market Watch - May 19, 2008
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Mortgage Commentary Mortgage interest rates ticked slightly higher last week, and we will likely see the same this week. Not much economic news is due out this week, and that which is will likely put inflationary pressures on the market,… more
The Mortgage Interest Rate Lock Advisory - May 19, 2008
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Current Rates*: 30 Year Fixed - 6. 125% with Zero Points Jumbo 30 Year Fixed - 7. 50% with 5 Points 15 Year Fixed - 5. 625% with Zero Points FHA /VA 30 Year Fixed - 6. 125% with Zero Points *Rates and fees accurate as of 5… more
The Mortgage Minute - May 19, 2008
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Looking Back Interest rates ended up moderately after what had looked like a good week. Stronger than expected Housing Starts (+8. 2% in April) erased all the gains from earlier in the week. In other news, the price of single-family… more
Mortgage Market Watch - May 12, 2008
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Mortgage Commentary We saw rates shed a few basis points last week. We don't expect that to continue, especially with oil prices rising along with inflation concerns. Inflation concerns - what with oil trading at $120 a barrel - appear to be… more
The Mortgage Interest Rate Lock Advisory - May 12, 2008
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Current Rates*: 30 Year Fixed - 6. 125% with Zero Points Jumbo 30 Year Fixed - 7. 50% with 5 Points 15 Year Fixed - 5. 625% with Zero Points FHA /VA 30 Year Fixed - 6. 125% with Zero Points *Rates and fees accurate as of… more
The Mortgage Minute - May 12, 2008
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Looking Back The swelling tides of higher mortgage interest rates started to recede last week as investors waded back into the waters. Fannie Mae reported a $2. 2 Billion loss for the first quarter, and issued a warning of a "severe… more
Mortgage Market Watch - May 5, 2008
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Mortgage Commentary Rates ticked down slightly last week. As a reaction, we expect rates to tick back up. Inflation concerns still permeate the economy, especially as summer approaches and energy and food prices skyrocket. To ensure… more