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

 

 

FHA Loan Limits Increased

FHA Loan limits have been increased back to the previous levels and per the latest HUD Announcement will remain at the higher level through 2012.  That means we have a max FHA loan amount of $418,750 for the Portland-Metro Area

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         503.961.8694

http://www.markruhl.com

 

Market Update for week of 12/5-12/09

Here is this upcoming week’s market forecast.  The past two weeks have had very similar trading charts week over week, and for the most part have ended flat to slightly ahead.  As for next week, there doesn’t look to be a whole lot until Thursday and Friday, in addition to everyone keeping a close eye on the Euro Debt Crisis.

Be sure to read the section titled “Disparity” under the graph for an interest breakdown on the difference between Treasuries and Mortgage Backed Securities (I am sure you can’t wait!).  If nothing else, it will help you explain the difference if you get the question from those engineer-types

 

I am available all weekend, so please feel free to call me anytime on my cell with questions and quick pre-approvals!

 

Market Comment

Mortgage bond prices ended slightly higher last week, which pushed mortgage interest rates lower. Stocks were stronger as the DOW surged higher by 291 points Monday and 490 points Wednesday. The Fed stepped in to help the EU deal with their debt crisis through some liquidity moves along with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank. The moves generally helped equities across the globe. Mortgage bonds traded in a choppy but tight pattern throughout the week despite the strength in equities. MBS were buoyed by remarks from German Chancellor Merkel which indicated there is no quick fix and the solution to the Euro debt crisis will take years. Mortgage bonds ended the week better by approximately 1/8 to 1/4 of a discount point.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
Factory Orders	Monday, Dec. 5, 10:00 am, et	Down 0.5%	Important.  A measure of manufacturing sector strength.  Weakness may lead to lower rates.
Consumer Credit	Wednesday, Dec. 7,  3:00 pm, et	$7b	Low importance.  A significantly large increase may lead to lower mortgage interest rates.
Weekly Jobless Claims	Thursday, Dec. 8,  8:30 am, et	397k	Important.  An indication of employment.   Higher claims may result in lower rates.
Trade Data	Friday, Dec. 9,  8:30 am, et	$44.3b 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, Dec. 9, 10:00 am, et	64	Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.

Disparity

The 10 and 30-year Treasury bond yields are often viewed as “benchmarks”, reflecting the overall state of interest rates in the US economy. Many people concerned about mortgage interest rates track these bonds as a barometer for mortgage interest rates. However, in reality the Treasury and mortgage markets trade independently.

The supply and demand characteristics of Treasury bonds and mortgage-backed securities (MBS) differ significantly. Treasury securities represent money needed to fund the operations of the US government. MBSs, on the other hand, represent borrowing by homeowners.

Information related to Treasury bonds is relatively easy to come by. Almost every major news medium reports changes. On the other hand, accurate mortgage interest rate information is difficult and costly to obtain.

In the absence of information directly related to the mortgage interest rate markets, Treasury information can be useful in that the bond market generally trends in the same direction. However, mortgage interest rates can vary significantly. In fact, many times the Treasuries will trade wildly while MBS only see minor price changes and vice versa. Thus, differences between Treasuries and MBS sometimes lead to misleading price change differentials. Last Wednesday mortgage-backed securities closed down 2/32nds on the day while the 10-year Treasury fell 25/32nds and the 30-year Treasury fell 64/32nds. This is a prime example where anyone that looked solely at Treasuries thought the mortgage market was worsening when in reality mortgage interest rates were near unchanged on the day. The data provides a valuable lesson into the differences between treasury bonds and mortgage-backed securities. This is just another example of why looking solely at treasuries can lead people to the wrong conclusions.

Keying in on the correct information can mean the difference between making and losing a tremendous amount of money when making float and lock decisions in the short term.

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         503.961.8694

http://www.markruhl.com

 

Market Update 11/14-11/18

DID YOU KNOW:

                -I am available 24/7 for you and your clients

                -Our in-house bank offers fast and hassle-free underwriting

                -I can float down borrowers after locking in if rates improve 

                -I focus on all aspects of home financing- purchase, refinance, construction, or cash out!

                -Call me today!

 

 

Without further ado- here is this week’s market update:

Market Comment

Mortgage bond prices ended lower last week, which pushed mortgage interest rates slightly higher. The early portion of the week was relatively tame compared to recent trading conditions. Most of the weakness came Thursday following stronger than expected weekly employment figures. Weekly jobless claims came in at 390k, better than the expected 400k mark and generally not bond friendly. Continuing claims came in at 3,615k, which also beat estimates. The reaction was negative and sent rates slightly higher ahead of the extended holiday weekend. Positive stocks also pressured rates at times throughout the week. Mortgage interest rates rose by approximately 1/4 of a discount point for the week.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
Producer Price Index	Tuesday, Nov. 15, 8:30 am, et	Up 0.4%, Core up 0.2%	Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Retail Sales	Tuesday, Nov. 15, 8:30 am, et	Up 1.4%	Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Business Inventories	Tuesday, Nov. 15, 10:00 am, et	Up 0.2%	Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates.
Consumer Price Index	Wednesday, Nov. 16, 8:30 am, et	Up 0.3%, Core up 0.1%	Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Industrial Production	Wednesday, Nov. 16, 9:15 am, et	Up 0.2%	Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization	Wednesday, Nov. 16, 9:15 am, et	77.2%	Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates.
Weekly Jobless Claims	Thursday, Nov. 17, 8:30 am, et	387k	Important. An indication of employment. Higher claims may result in lower rates.
Housing Starts	Thursday, Nov. 17, 8:30 am, et	610k	Important. A measure of housing sector strength. Weakness may lead to lower rates.
Philadelphia Fed Survey	Thursday, Nov. 17, 10:00 am, et	6.8	Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Leading Economic Indicators	Friday, Nov. 18, 10:00 am, et	Up 0.2%	Important. An indication of future economic activity. A smaller increase may lead to lower rates.

Business Inventories

The report on business inventories basically gives a broader look at the durable goods, factory orders, and retail sales reports. Not only is this report an important part of the investment component of the GDP, but it also provides additional evidence about the economy in the upcoming months. Changes in business inventories slow as the economy approaches a peak, and rise as the economy approaches the trough of a recession. Therefore the change in business inventories is a leading indicator of GDP. The data for this report, which are published by the Department of Commerce’s Census Bureau, comes from a monthly survey of inventories, orders, and manufacturers’ shipments, in addition to the merchant wholesalers and retail trade surveys.

In this environment every piece of data has the potential to cause some volatility.

 

 

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 11/7-11/11

Below is the market forecast for the week starting November 7^th.  For the most part, we have seen rates improve this past week due to the uncertainty in the EU, but the name of the game is still “volatility” 

If you or your borrowers have any questions over the weekend, please feel free to call me anytime on my cell below.  Many lenders are backed up with refinances, but I am still able to accommodate the fabled “quick close”.  I can help you!

Market Comment

Mortgage bond prices ended higher last week, which pushed mortgage interest rates lower. The financial markets remained extremely volatile. Most of the rate improvements came early in the week following Japan’s intervention to weaken the yen and Greek Prime Minister Papandreou’s indication that budget cuts would be put to a public vote. Unfortunately some of those rate improvements were erased when Papandreou retreated on the vote and the European Central Bank made a surprise rate cut. The employment report was mixed with the headline figure of 9% coming in lower than estimates while non-farm payrolls were weaker than expected. Despite the wild swings, mortgage interest rates fell by almost a full discount point for the week.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
Consumer Credit	Monday, Nov. 7, 3:00 pm, et	$9.56b	Low importance. A significantly large increase may lead to lower mortgage interest rates.
3-year Treasury Note Auction	Tuesday, Nov. 8, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction	Wednesday, Nov. 9, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims	Thursday, Nov. 10, 8:30 am, et	395k	Important. An indication of employment. Higher claims may result in lower rates.
Trade Data	Thursday, Nov. 10, 8:30 am, et	$45b 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. 10, 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. 11, 10:00 am, et	60.5	Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Trade Data

In the distant past the US economy tended to be viewed as relatively unaffected by economic activity in other countries. However, increased trades with other countries and an increased reliance on foreign purchases of US debt have generated a market awareness of trade-related issues. The exchange rate of the dollar and foreign trade flows are interrelated. One must buy dollars to purchase US exports, and sell dollars to buy imports. Likewise, foreign investment in US debt requires the purchase of US dollars, and is thus affected by exchange rates.

Each month the Commerce Department gathers an enormous amount of detailed data on exports and imports. The data is broken between goods and services trade. The overall trade balance is the dollar difference between US exports and imports on a seasonally adjusted basis. The report also highlights trade flows between the US and various partners. Since the mid-1970’s, US imports of consumer and capital goods have exceeded exports, so a merchandise trade deficit has existed. The US has always maintained a service trade surplus, and because this surplus is not enough to offset the merchandise trade deficit, a net export deficit has resulted.

Due to the overwhelming amount of data considered, trade is difficult to forecast, and can present surprises. For a variety of reasons, the financial markets will often be unaffected by surprises in trade data. However, the data still has the ability to cause mortgage interest rate volatility.

Market Update 10/24-10/28

Below is this week’s market update.  Rates ended level with how they started last week, despite some ups and downs.  Looks like this week we will be watching stocks and Europe for guidance on where rates will go until Friday’s flurry of reports.

Feel free to call me anytime with questions or if there is anything I can do to help!

Market Comment

Mortgage bond prices ended last week near unchanged, which kept mortgage interest rates relatively in check. Trading was choppy with some rate improvements Tuesday, which unfortunately were erased Wednesday and Thursday. Stock strength made it difficult for mortgage bonds to gain any traction. Higher than expected producer price, housing starts, and Philadelphia Fed data also made it difficult for rates to improve.

The employment cost index and PCE core inflation data will be the most important releases this week. The Treasury auctions will be followed closely. If foreign demand falters it could carry over to mortgage backed securities.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
Consumer Confidence	Tuesday, Oct. 25, 10:00 am, et	46	Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Treasury Auctions Begin	Tuesday, Oct. 25, 1:15 pm, et	None	Important. 2Y Notes on Tuesday, 5Y Notes on Wednesday, and 7Y Notes on Thursday.
Durable Goods Orders	Wednesday, Oct. 26,  8:30 am, et	Down 0.2%	Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates.
New Home Sales	Wednesday, Oct. 26,  10:00 am, et	287k	Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
Weekly Jobless Claims	Thursday, Oct. 27, 8:30 am, et	401k	Important. An indication of employment. Higher claims may result in lower rates.
Q3 Advance GDP	Thursday, Oct. 27, 8:30 am, et	Up 1.2%	Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Personal Income and Outlays	Friday, Oct. 28, 8:30 am, et	Unchanged, Up 0.1%	Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
PCE Core Inflation	Friday, Oct. 28, 8:30 am, et	Up 0.1%	Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
Q3 Employment Cost Index	Friday, Oct. 28, 8:30 am, et	Up 0.4%	Very important. A measure of wage inflation. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment	Friday, Oct. 28, 10:00 am, et	57	Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Employment Cost Index

The employment cost index is a quarterly report issued by the Department of Labor. The report measures the growth of wages, salaries, and benefits costs over a certain period of time. Though ECI figures are usually weeks old, the data remains the best indicator of employment price pressures considering it factors employees’ total compensation.

If wage pressures become evident, higher expectations of inflation also tend to arise. However, increasing compensation does not necessarily lead to increased inflationary pressures. Oftentimes, increased productivity enables employers to increase compensation without increasing the costs of their goods or services. Be cautious heading into this release.

Market Update 09/12-09/16

Here is this week's market update.  Rates are still VERY low, so it could be a great time to consider a refinance.  Some hot points first:

• Many lenders are capping the adjustments that can be made on any given rate.  That means the spread between owner occupied and investment properties is MUCH smaller.  This gives a great opportunity to fix a low rate for your rental
• Low or no equity in your home?  Might not be a problem!  We can still potentially lend up to 125% of your home's value if your loan is backed by Fannie Mae or Freddie Mac
• I can still close quickly, so if you or someone you know is buying a home and the lender hasn't offered a free float down in the past 2 weeks, give me a call!

Without further ado:

Market Comment
Mortgage bond prices were near unchanged last week, which kept mortgage interest rates relatively steady overall. Rates started off on a bad note the first portion of the week as equities rallied on news of a White House proposal to spend $300 to $400 billion for job creation. Fortunately the weekly jobless claims data Thursday came in higher than expected which reversed the earlier rate spikes. Stocks struggled Friday with some 100 points swings. Despite the volatility, mortgage bonds ended the week near unchanged.
The Treasury auctions this week will be watched carefully. If foreign demand falters rates could come under pressure. The inflation data Wednesday and Thursday may result in mortgage interest rate volatility.
LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
2-year Treasury Note Auction	Monday, Sept. 12, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction	Tuesday, Sept. 13, 1:15 pm, et	None	Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.
Producer Price Index	Wednesday, Sept. 14, 8:30 am, et	Up 0.4%, Core up 0.2%	Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Retail Sales	Wednesday, Sept. 14, 8:30 am, et	Up 0.3%	Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
30-year Treasury Bond Auction	Wednesday, Sept. 14, 1:15 pm, et	None	Important. Bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims	Thursday, Sept. 15, 8:30 am, et	410k	Important. An indication of employment. Higher claims may result in lower rates.
Consumer Price Index	Thursday, Sept. 15, 8:30 am, et	Up 0.5%, Core up 0.2%	Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Industrial Production	Thursday, Sept. 15, 9:15 am, et	Up 0.5%	Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization	Thursday, Sept. 15, 9:15 am, et	77.5%	Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.
Philadelphia Fed Survey	Thursday, Sept. 15, 10:00 am, et	4.0	Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment	Friday, Sept. 16, 10:00 am, et	52	Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Data

The abundance of fundamental data this week provides a good opportunity for mortgages to improve.  If the data shows weakness in the economy with little or no inflationary pressures then it is possible for mortgage bonds to rally.  However, if the data shows that the economy is rebounding any significant signs of inflation, mortgage bonds may fall pushing mortgage interest rates higher.


Feel free to call me with any questions!