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Unusually Uncertain

Friday, July 23, 2010
by Troy Anderson

 

30yr fixed 4.25%
15yr fixed 3.75%
5/1 ARM   3.25%
FHA 30yr fixed 4.25%
FHA 15yr fixed 3.875%
FHA 5/1 ARM  3. 375%
"Unusually Uncertain"
Mortgage rates moved even lower during the week, as uncertainty about the pace of the economic recovery has increased investor demand for relatively safer assets such as government guaranteed mortgage-backed securities (MBS). The Fed Chairman acknowledged during the week that the economic outlook is even more difficult than usual to predict right now. Uncertain economic growth with low inflation is a favorable environment for mortgage rates.
In his semi-annual testimony to Congress, Fed Chief Bernanke described the economic outlook as "unusually uncertain". According to Bernanke, this is the worst labor market since the Great Depression, and it is recovering more slowly than expected. Still, the Fed forecasts modest economic growth in 2010 with low inflation. Important for mortgage rates, Bernanke expressed reluctance to provide further monetary stimulus, unless the economy falters badly. He suggested that the upside of additional Fed actions may be limited, while the downside is that it would raise future inflation expectations.
In the housing sector, June Existing Home Sales declined 5% from strong May levels to an annual rate of 5.37M units, which was well above the consensus forecast of 5.10M. Existing sales were 10% higher than one year ago. First-time buyers accounted for 43% of existing home sales in June. Existing home sales have been helped in recent months by the homebuyer tax credit. Even with the end of the tax credit, though, the National Association of Realtors (NAR) expects annual existing home sales to increase in 2010 and to rise further in 2011.
Brandon Roy
NMLS #119434
Residential Lending
Fairway Independent Mortgage Corporation
Cell: 206-229-3944
Fax: 425-943-7725
Email: broy@remedygroupmortgage.com
http://www.fairwayindependentmc.com/

 

30yr fixed 4.25%

15yr fixed 3.75%

5/1 ARM   3.25%

FHA 30yr fixed 4.25%

FHA 15yr fixed 3.875%

FHA 5/1 ARM  3. 375%



"Unusually Uncertain"

Mortgage rates moved even lower during the week, as uncertainty about the pace of the economic recovery has increased investor demand for relatively safer assets such as government guaranteed mortgage-backed securities (MBS). The Fed Chairman acknowledged during the week that the economic outlook is even more difficult than usual to predict right now. Uncertain economic growth with low inflation is a favorable environment for mortgage rates.In his semi-annual testimony to Congress, Fed Chief Bernanke described the economic outlook as "unusually uncertain". According to Bernanke, this is the worst labor market since the Great Depression, and it is recovering more slowly than expected. Still, the Fed forecasts modest economic growth in 2010 with low inflation. Important for mortgage rates, Bernanke expressed reluctance to provide further monetary stimulus, unless the economy falters badly. He suggested that the upside of additional Fed actions may be limited, while the downside is that it would raise future inflation expectations.In the housing sector, June Existing Home Sales declined 5% from strong May levels to an annual rate of 5.37M units, which was well above the consensus forecast of 5.10M. Existing sales were 10% higher than one year ago. First-time buyers accounted for 43% of existing home sales in June. Existing home sales have been helped in recent months by the homebuyer tax credit. Even with the end of the tax credit, though, the National Association of Realtors (NAR) expects annual existing home sales to increase in 2010 and to rise further in 2011.
Brandon RoyNMLS #119434Residential LendingFairway Independent Mortgage CorporationCell: 206-229-3944Fax: 425-943-7725Email: broy@remedygroupmortgage.comhttp://www.fairwayindependentmc.com/

Mortgage Rates Rise In Weekly Surveys

Thursday, May 17, 2007
by Troy Anderson & Associates LLC

 

Inflation risk still troubles Fed

Thursday, May 17, 2007


Inman News

Mortgage rates gained this week on the Federal Reserve's belief that inflation could still pose a problem, Freddie Mac and Bankrate.com reported today.

In Freddie Mac's survey, the 30-year fixed-rate mortgage climbed to an average 6.21 percent from last week's 6.15 percent, while the 15-year fixed-rate mortgage rose from 5.87 percent to 5.92 percent. Points, which are fees lenders charge for loan processing expressed as a percent of the loan, averaged 0.4 on the 30- and 15-year loans.

Borrowing costs on adjustable-rate mortgages (ARMs) were mixed, as the five-year Treasury-indexed ARM grew from 5.89 percent to 5.92 percent while the one-year ARM held at 5.48 percent. Points on these loans averaged 0.6 and 0.7, respectively.

"Mortgage rates inched up this week following the Federal Open Market Committee statement reiterating that the predominant concern remains the risk that inflation will fail to moderate as expected," Frank Nothaft, Freddie Mac vice president and chief economist, said in a statement. "However, as long as core inflation continues to trend downward and economic growth remains subpar it is unlikely that we will see any big movement in mortgage rates."

"Recent indicators point to continued weakness in the housing market, with the bottom of the cycle still months away. There are signs that house sales are stabilizing and excess inventories beginning to come under control, but building permits continue to be weak and condo sales are soft in a number of markets."

Nothaft said the only good news from the housing market came from the National Association of Realtors, which reported first-quarter existing-home sales were up 2.4 percent from the final quarter of 2006, and the Mortgage Bankers Association, which reported the "average pace of mortgage applications for home purchase over the first two weeks in May was the strongest since January 2006."

In Bankrate.com's survey, mortgage rates increased slightly this week, with the average 30-year fixed mortgage rate rising to 6.32 percent -- the same point where it rested on Valentine's Day. Discount and origination points on the 30-year loans averaged 0.26.

The average 15-year fixed-rate mortgage, popular for refinancing, rose to 6.05 percent, according to Bankrate.com. With larger loans, the average jumbo 30-year fixed rate nudged higher to 6.56 percent. On adjustable-rate mortgages, the average 5/1 ARM jumped up to 6.24 percent, while the average one-year ARM held at 6.05 percent.

Bankrate.com reported that over the last three months mortgage rates have remained in a very narrow range, owing to a static interest-rate environment. Even the release of several inflation indicators, plus the latest data on retail sales, the housing market and a Federal Open Market Committee meeting in the past seven days, barely fazed mortgage rates and Treasury yields.

Fixed mortgage rates are notably lower than last summer when the Fed last raised interest rates, Bankrate.com reported. At the time, the average 30-year fixed mortgage rate peaked at 6.93 percent, and a $165,000 loan carried a monthly payment of $1,090. With the average 30-year fixed rate now 6.32 percent, the same loan originated today would carry a monthly payment of $1,023.

The following is a sampling of Bankrate.com's average 30-year-mortgage interest rates this week in some U.S. metropolitan areas:

New York - 6.3 percent with 0.08 point

Los Angeles - 6.35 percent with 0.43 point

Chicago - 6.41 percent with 0.04 point

San Francisco - 6.25 percent with 0.51 point

Philadelphia - 6.36 percent with 0.15 point

Detroit - 6.37 percent with 0.03 point

Boston - 6.4 percent with 0.03 point

Houston - 6.28 percent with 0.44 point

Dallas - 6.22 percent with 0.47 point

Washington, D.C. - 6.26 percent with 0.43 point

***