Mortgage Market
Mortgage Markets have gone up and down in this current range for over two weeks now. Tuesday afternoon we saw near all-time low Mortgage Rates again but back up Wednesday and today. Are you thinking of refinancing? Just submit your Application, LOCK in your rate for 60 days and begin the Mortgage Banking refinancing process which is not always fun.
The lowest 30 year fixed mortgage rates have fallen into the 4.375% to 4.5% range for well-qualified borrowers. Some Banks will even go as low as 4.125% if the borrower is willing to pay a point (1% of your loan amount).
Mortgage Bankers will only be able to offer these near all-time low rates to borrowers who have perfect FICO credit scores and equity in their home to qualify for a refinance. If you are not a ”perfect borrower”, mortgage pricing is a bit higher but should still be in the 4.875% rate range.
Inquire within for current Mortgage Rates or guidelines bc@SmarterBorrowing.com 617.771.5021
Economic Data
Thursday’s bond market opened in negative following early stock gains, but has since recovered a good part of those losses after the stock markets have fallen into negative ground. The Dow is now down after gaining approximately 100 points during earlier trading while the Nasdaq is down, giving up its 20+ point gain. The bond market is currently down, which should cause a downward revision to mortgage rates this afternoon.
This morning’s economic data didn’t cause much movement in the markets or mortgage rates as both reports showed little surprise from forecasts. The second revision to the 2nd Quarter Gross Domestic Product (GDP) was released early this morning, revealing an increase in the GDP of 1.7% This was slightly higher than previous estimates of 1.6%, but not enough of a change to influence mortgage pricing.
Last week’s unemployment figures were also posted this morning. The Labor Department announced that 453,000 new claims for unemployment benefits were filed last week. This was a little lower than the 457,000 that was expected, but was also not enough of a variance from forecasts to impact rates.
Yesterday’s 7-year Note sale drew a decent demand from investors. This didn’t come as a surprise since Tuesday’s 5-year Note sale also went well. It indicates that there is still a good appetite for mid to long-term securities, which is good news for mortgage rates. Investor interest in these type of securities is needed to keep mortgage rates low.
There are three reports scheduled to be posted tomorrow, one of which is the week’s most important. The first is August’s Personal Income and Outlays data early tomorrow morning. It gives us an indication of consumer ability to spend and current spending habits. This is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is negative news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. It is expected to show a 0.3% rise in income and a 0.3% increase in spending. If we see smaller than expected increases, the bond market should react positively, leading to lower rates Friday.
The second report is the University of Michigan’s revised Index of Consumer Sentiment for September. The preliminary reading that was released earlier this month showed a 66.6 reading. Analysts are expecting to see a small upward revision, meaning consumer confidence was slightly higher than previously thought. A lower than expected reading would be good news for bonds and should help improve mortgage rates because it would signal that consumers are less apt to make large purchases in the immediate future.
The biggest report of the week comes late tomorrow morning when the Institute for Supply Management (ISM), who will post their manufacturing index for September. This index measures manufacturer sentiment rather than consumer confidence. Analysts are expecting a decline from last month’s 56.3 reading. The 50.0 benchmark is extremely important because a reading above that level means more surveyed executives felt business improved than those who said it had worsened. This data is important not only because it measures manufacturer sentiment, but it is also very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If it reveals a reading below 54.8, meaning sentiment fell short of expectations, we should see the bond market rally and mortgage rates fall tomorrow.
FLOAT or LOCK
If I was closing on a Home Mortgage in the next 0 to 15 Days – LOCK
If I was closing on a Home Mortgage in the next 15 to 30 Days – LOCK
If I was closing on a Home Mortgage in the next 30 to 60 Days – FLOAT
If I was closing on a Home Mortgage in the next 60+ FLOAT
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
- Are you a possible Massachusetts First Time Homebuyer?
- Do you have a Real Estate client inquiring about current Mortgage Rates?
- Do you have any Refinancing questions?
- Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
- Have your Real Estate clients been Pre Approved?
bc@SmarterBorrowing.com 617.771.5021
Credit: Bloomberg, Yahoo Finance, Mortgage News, MBS Quoteline, WSJ, NY Times
bc@smarterborrowing.com
617.771.5021
