Market Forecast 11/5-11/9

Here is this week’s market update.  Rates are steady, but next week could bring a lot of interesting changes with the economic data AND that little election thing.

 

I am available all weekend, so be sure to call me if there is anything I can do to help!

Market Comment

Mortgage bond prices finished the week near unchanged keeping rates in check. Rates started moving slightly lower early in the week in shortened trading tied to Hurricane Sandy. The data throughout the week generally was stronger than expected which did not help rates improve. ADP employment and factory orders data were stronger than expected while weekly jobless claims were lower than expected. The heavyweight employment report Friday showed stronger than expected payroll increases. The initial reaction was negative causing rates to spike but it appeared the Fed stepped in with their $40b monthly MBS purchasing to keep rates from spiking substantially higher. Mortgage interest rates bounced back a little lower Friday afternoon.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
3-year Treasury Note Auction	Tuesday, Nov. 6, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Consumer Credit	Wednesday, Nov. 7, 3:00 pm, et	$12.5b	Low importance. A significantly large increase may lead to lower mortgage interest rates.
10-year Treasury Note Auction	Wednesday, Nov. 7, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims	Thursday, Nov. 8, 8:30 am, et	369k	Important. An indication of employment. Higher claims may result in lower rates.
Trade Data	Thursday, Nov. 8, 8:30 am, et	$44.5b deficit	Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
30-year Treasury Bond Auction	Thursday, Nov. 8, 1:15 pm, et	None	Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates.
U of Michigan Consumer Sentiment	Friday, Nov. 9, 10:00 am, et	79.8	Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

GSEs

Government sponsored enterprises (GSEs) are financial services created by Congress. Two of the most important GSEs in the mortgage industry are Fannie Mae and Freddie Mac. These corporations are designed to make credit available to targeted borrowers in an efficient manner. Fannie and Freddie were privately owned until September 2008 when the lines were blurred. The credit crisis resulted in Fannie and Freddie facing huge liquidity concerns. Their insolvency under fair value accounting sparked worries about their failure. The Treasury and Congress worked to avert a catastrophe but faced many challenges. The Treasury ultimately placed the entities in “conservatorship.” This enabled the Treasury to increase lines of credit to the GSEs and bought equity in the companies. This US Government “ownership” of these companies left many unknowns and clouded the future. The stocks of these entities were delisted in June of 2010 but still trade “over the counter.” 

The supply and demand characteristics of Treasury bonds and mortgage-backed securities (MBSs) issued by Fannie and Freddie differ significantly. Treasury securities represent money needed to fund the operations of the US government. MBSs, on the other hand, represent borrowing by homeowners. Because homeowners can sell or refinance their homes, investors in 30-year mortgage-backed securities usually see principal repayment in significantly shorter periods of time. In terms of demand, Treasury securities are regarded as “risk free” investments, and often benefit from a “flight to quality” in times of financial crisis. MBSs are part of many retirement accounts which citizens depend on for income. The Federal Housing Finance Agency is trying to preserve those investments while shrinking Fannie and Freddie. Some want to see them completely dissolved and a new system put in place. The ramifications of that could be widespread and the debate rages on

 

 

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         971.244.LEND

http://www.markruhl.com

 

*This electronic mail could contain confidential or privileged information and unauthorized use, copying or distribution other than by the intended recipient is prohibited. In the event you received this communication in error, please notify the sender.  Equal Housing Lender

 

Portland Market Update October

Here is October’s Market Summary.  It summarizes what we know—Strong upward trends on pricing and it is a buyer’s market.  This could be a great tool for you to pass on to anyone you know who is on the fence about buying a new home, and have them call me anytime to get pre-approved

 

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         971.244.LEND

http://www.markruhl.com

 

*This electronic mail could contain confidential or privileged information and unauthorized use, copying or distribution other than by the intended recipient is prohibited. In the event you received this communication in error, please notify the sender.  Equal Housing Lender

 

Market Forecast 10/8-10/12

Here is next week’s market forecast!  This week was a great week for rates so long as you locked in before Thursday.  I managed to get quite a few locked in or re-negotiated down to 3.25%! 

 

As always, I am available all weekend on my cell to answer any questions regarding rates or pre-approvals. 

Also, if you have any transactions that might be turning “sideways” or are at a rate higher than 3.5%, I am still able to start, lock, underwrite and fund loans and still close this month!

 

Market Comment

Mortgage bond prices finished the week lower which pushed rates higher. Rates were quiet throughout the first portion of the week as euro zone weakness dominated the headlines. Stronger than expected data the latter portion of the week caused a spike in rates. Higher than expected ISM Index data started the negative trend. The biggest rate increases came Friday morning following the employment report. Unemployment came in at 7.8%, considerably lower than the expected 8.2% mark. This shocked the financial markets. Stocks extended their gains and mortgage bond prices fell which pushed rates higher. Mortgage interest rates finished the week worse by about 5/8 of a discount point as a result.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
3-year Treasury Note Auction	Tuesday, Oct. 9, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction	Wednesday, Oct. 10, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Fed “Beige Book”	Wednesday, Oct. 10, 2:00 pm, et	None	Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Weekly Jobless Claims	Thursday, Oct. 11, 8:30 am, et	362k	Important. An indication of employment. Higher claims may result in lower rates.
Trade Data	Thursday, Oct. 11, 8:30 am, et	$43.5b deficit	Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
30-year Treasury Bond Auction	Thursday, Oct. 11, 1:15 pm, et	None	Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Producer Price Index	Friday, Oct. 12, 8:30 am, et	Up 0.9%, Core up 0.2%	Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
U of Michigan Consumer Sentiment	Friday, Oct. 12, 10:00 am, et	76.8	Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Stocks and Bonds Remain Volatile

Last week, mortgage interest rates rose sharply following the lower than expected unemployment figure. As the US economy moves along and world economies struggle, the demand for the lower yielding government-backed debt securities has whipsawed considerably. One day we see a flight to quality influx of investor funds, which drive prices up and rates down. The next day the inverse occurs.

The US stock market was on a roar the latter portion of the week at the expense of demand for mortgage-backed securities. As the stock market gained strength, investors sought higher returns by moving their money out of the bond market and into the higher yielding stock market. The whipsaw trading environment is likely to continue. 

A cautious approach is necessary to protect against extreme short-term market volatility resulting in increased interest rates considering the improbability of accurately determining how the market will react on a short-term day-to-day trading basis. Taking advantage of the historically favorable interest rates at their current levels makes sense in this environment. We have seen in the last few weeks that lower rates are not always a given, even with the Fed spending $40b per month to buy mortgage-backed securities.

 

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         971.244.LEND

http://www.markruhl.com

 

*This electronic mail could contain confidential or privileged information and unauthorized use, copying or distribution other than by the intended recipient is prohibited. In the event you received this communication in error, please notify the sender.  Equal Housing Lender

 

National Mortgage Settlement and how it affects you

 

We are seeing some pretty interesting news today on the National Mortgage Settlement which is being touted as “Landmark Settlement & Landmark Relief” to home owners in need of assistance.

 

On the surface it sounds huge.  Ally/GMAC, B of A, Citi, JP Morgan Chase & Wells Fargo are in the process of providing eligible borrowers with $25Billion dollars in loan modification, principal reduction & monetary compensation.  On paper that looks significant.  However, consider that the max payout to those who lost their homes (who are eligible) is going to be $2,000.  Principal reductions may be less per borrower, and loan modifications could stack up for some time. 

 

Consider some of the finer aspects of the timeline:

·         Over the next 30 to 60 days, settlement negotiators will be selecting an administrator to handle the logistics of the settlement and monitor compliance.

 

·         Over the next six to nine months, the settlement administrator, attorneys general and the mortgage servicers will work to identify homeowners eligible for the immediate cash payments, principal reductions and refinancing. Those eligible will receive letters.

 

·         This settlement will be executed over the next three years.

 

This settlement, while enticing to many – only scratches the surface of cash flow problems for many Home Owners seeking assistance.  We are still seeing interest rates at historic lows, and while many areas have seen widespread home value reduction, the Northwest has been less affected than much of the country.  Many Home Owners feel as though refinancing in order to lower their current rate & monthly payment is not an option, but we continue to refinance our neighbors into more manageable loan options while freeing up cash-flow immediately. 

 

Don’t wait 6 to 9 months to find out if you may receive assistance in the next three years.  Contact me today for a FREE, NO OBLIGATION MORTGAGE ANALYSIS and find out if relief is right around the corner.

 

 

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         503.961.8694

http://www.markruhl.com

 

*This electronic mail could contain confidential or privileged information and unauthorized use, copying or distribution other than by the intended recipient is prohibited. In the event you received this communication in error, please notify the sender.  Equal Housing Lender

 

Market Forecast 01/30-2/03

Here is this the market forecast for the week of 1/30-2/3.  Rates dropped this week thanks to the Fed announcing LOW RATES THROUGH 2014!  So if you know anyone looking to buy or refi, have them give me call!

 

 

Market Comment Mortgage bond prices were higher last week which pushed mortgage interest rates lower. Rates were helped considerably by the Fed announcement which indicated they would try to keep rates low through 2014. This was a significant revision to prior remarks which set 2013 as the timeframe. The Fed went on to note that global markets pose significant downside risk to the US economic outlook and inflation remains subdued. Much of the data released was bond friendly. Higher than expected weekly jobless claims and weaker than expected GDP data helped rates hold the improvements towards the end of the week. Mortgage bonds ended the week better by almost a discount point. LOOKING AHEAD Economic Indicator Release Date & Time Consensus Estimate Analysis Personal Income and Outlays Monday, Jan. 30, 8:30 am, et Up 0.2%, Up 0.1% Important.  A measure of consumers’ ability to spend.  Weakness may lead to lower mortgage rates. PCE Core  Inflation Monday, Jan. 30,  8:30 am, et Up 0.1% Important.  A measure of price increases for all domestic personal consumption.  Weaker figure may help rates improve. Q4 Employment Cost Index Tuesday, Jan. 31, 8:30 am, et Up 0.2% Very important. A measure of wage inflation.  Weakness may lead to lower rates. Consumer Confidence Tuesday, Jan. 31, 10:00 am, et 63.5 Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates. ADP Employment Wednesday, Feb. 1, 8:30 am, et 280k Important.  An indication of employment.  Weakness may bring lower rates. ISM Index Wednesday, Feb. 1, 10:00 am, et 54 Important.  A measure of manufacturer sentiment.  Weakness may lead to lower mortgage rates. Weekly Jobless Claims Thursday, Feb. 2,  8:30 am, et 375k Important.  An indication of employment.   Higher claims may result in lower rates. Preliminary Q4 Productivity Thursday, Feb. 2,  8:30 am, et Up 2.0% Important.  A measure of output per hour.  Improvement may lead to lower mortgage rates. Employment Friday, Feb. 3,  8:30 am, et 8.5%, Payrolls +200k Very important.  An increase in unemployment or weakness in payrolls may bring lower rates. Factory Orders Friday, Feb. 3,  10:00 am, et Up 1.7% Important.  A measure of manufacturing sector strength.  Weakness may lead to lower rates. ISM The Institute for Supply Management (ISM), formerly the National Association of Purchasing Management (NAPM), releases the “Report on Business” on the first working day of each month. Part of this report is the “diffusion index,” which tracks the economy’s ups and downs fairly well. In conducting this survey, the ISM questions purchasing executives from over 250 industrial companies compiling data on production, orders, commodity prices, inventories, vendor performance, and employment. Each of the respondents is asked to rank the categories as “up” or “down.” Various weights are applied to the individual components to form the composite index. A composite index reading of 50 can be thought of as a “swing point.” A reading above 50 implies an increase in economic activity, while a reading below 50 indicates a decline. The ISM report is difficult for economists to forecast because there is little data upon which to base an educated guess. The report has a large “surprise factor” and can cause market swings.

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         503.961.8694

http://www.markruhl.com

 

*This electronic mail could contain confidential or privileged information and unauthorized use, copying or distribution other than by the intended recipient is prohibited. In the event you received this communication in error, please notify the sender.  Equal Housing Lender

 

Market Forecast 01/09-01/13

In addition to next week’s market forecast, I thought I would send this chart over.  Please forward this bit of info along to anyone you know that is on the fence about buying, and warn them about the potential for rates increasing.  If they have any questions, feel free to have them call me anytime!

 

 

Here is next week’s market forecast:

 

Market Comment

Mortgage bond prices were slightly higher last week, which kept mortgage interest rates relatively in check.  We started the week with worse rates as stocks surged higher following the extended holiday weekend and the DOW was up 225 points at pricing Tuesday morning.  Fortunately, weaker than expected factory orders data Wednesday helped reverse the upward trend in rates and got us back near unchanged on the week.  The European debt crisis continued which generally helped US debt instruments.  Mortgage bonds ended the week unchanged to better by approximately 1/8 of a discount point.

The Treasury auctions this week will provide an indication of foreign appetite for US debt.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
3-year Treasury Note Auction	Tuesday, Jan. 10, 1:15 pm, et	None	Important.  Notes will be auctioned.  Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction	Wednesday, Jan. 11, 1:15 pm, et	None	Important.  Notes will be auctioned.  Strong demand may lead to lower mortgage rates.
Fed “Beige Book”	Wednesday, Jan. 11, 2:00 pm, et	None	Important.  This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Weekly Jobless Claims	Thursday, Jan. 12, 8:30 am, et	365k	Important.  An indication of employment.   Higher claims may result in lower rates.
Retail Sales	Thursday, Jan. 12, 8:30 am, et	Up 0.2%	Important.  A measure of consumer demand.  Weakness may lead to lower mortgage rates.
30-year Treasury Bond Auction	Thursday, Jan. 12, 1:15 pm, et	None	Important.  Bonds will be auctioned.  Strong demand may lead to lower mortgage rates.
Trade Data	Friday, Jan. 13, 8:30 am, et	$43b deficit	Important.  Affects the value of the dollar.  A falling deficit may strengthen the dollar and lead to lower rates.
U of Michigan Consumer Sentiment	Friday, Jan. 13, 10:00 am, et	65.5	Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.

Employment Results

The December employment report came in stronger than expected with the headline rate surprisingly lower and the jobs figure better than expected.  Fortunately stocks took a dive later Friday morning and rates were able to rebound a little later in the morning recovering the initial weakness.    Unemployment came in at 8.5%, considerably better than the 8.7% rate that was expected and not bond friendly.  The payrolls component showed jobs increased 200,000 compared to the 150,000 increase expected by analysts.  The mortgage bond market had an initial negative reaction to the report.

The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor compiles data from two different surveys, the household survey and the establishment survey, in order to complete the employment report.  This explains why sometimes there is a divergence between the unemployment rate and payrolls figures each month.  The payrolls figure usually receives the greater weight from analysts but the headline figure covers the news headlines.

Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         503.961.8694

http://www.markruhl.com

 

*This electronic mail could contain confidential or privileged information and unauthorized use, copying or distribution other than by the intended recipient is prohibited. In the event you received this communication in error, please notify the sender.  Equal Housing Lender

 

Market Update for 12/12-12/16

 

Here is this week’s market update.  Rates improved somewhat last week, so if you know anyone holding out on a refinance now is a good time to take action!  As always, feel free to call me anytime with questions or if there is anything I can do to help!

 

Market Comment

Mortgage bond prices ended slightly higher last week, which pushed mortgage interest rates lower.  The Euro debt crisis continued to take center stage.  The European Central Bank cut rates in a move to help avoid another recession in the region.  Economic activity in Europe slipped in recent months as the debt crisis expanded and solutions were fleeting.  This global economic uncertainty sent flight to quality buying of US mortgage-backed securities.  MBSs traded in a choppy but tight pattern throughout the week.  Stocks were volatile but held most of the recent gains as the limited data was generally stock friendly.  Mortgage bonds ended the week better by approximately 3/8 to 1/2 of a discount point

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
Treasury Auctions Begin	Monday, Dec. 12, 1:15 pm, et	None	Important.  There will be auctions Monday 3Y, Tuesday 10Y, Wednesday 30Y, and Thursday 5Y TIPS.
Retail Sales	Tuesday, Dec. 13, 8:30 am, et	Up 0.6%	Important.  A measure of consumer demand.  A smaller than expected increase may lead to lower rates.
Fed Meeting Adjourns	Tuesday, Dec. 13, 2:15 pm, et	No rate changes	Important.  Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
Weekly Jobless Claims	Thursday, Dec. 15, 8:30 am, et	379k	Important.  An indication of employment.   Higher claims may result in lower rates.
Producer Price Index	Thursday, Dec. 15, 8:30 am, et	Unchanged, Core up 0.1%	Important.  An indication of inflationary pressures at the producer level.  Lower figures may lead to lower rates.
Industrial Production	Thursday, Dec. 15, 9:15 am, et	Up 0.6%	Important.  A measure of manufacturing sector strength.  Weakness may lead to lower rates.
Capacity Utilization	Thursday, Dec. 15, 9:15 am, et	77.4%	Important.  A figure above 85% is viewed as inflationary.  Weakness may lead to lower rates.
Philadelphia Fed Survey	Thursday, Dec. 15, 10:00 am, et	2.4	Moderately important.  A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Consumer Price Index	Friday, Dec.16, 8:30 am, et	Unchanged, Core up 0.1%	Important.  A measure of inflation at the consumer level.  Lower figures may lead to lower rates.

Retail Sales

Retail sales data is the first indication of weakness or strength in consumer spending released each month.  The Bureau of the Census of the US Department of Commerce provides information on how much the consumer spends on the purchase of goods.  This data provides the consumption part of the gross domestic product.  Retail sales data represents merchandise sold for cash or credit by retailers.  Durable goods, such as autos, make up 35% of the figure.  The balance consists of non-durables such as gasoline, restaurants, and general merchandise.  There are several drawbacks to the report.  The data covers purchases of goods only, not services.  It is also not adjusted for inflation and is extremely volatile. Economists are concerned that the current economic uncertainty will continue to curtail consumer-spending habits especially heading into the holiday season.

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         503.961.8694

http://www.markruhl.com