What the Fed Says and How It Impacts Mortgage Rates [LIVE POST]

I am going to attempt to write a “live post” today to illustrate how mortgage rates may change based on data that is released throughout the day and market reactions. Please keep in mind that despite my best efforts, sometimes a “live post” can be a bit challenging…we’ll give it a try!

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What May Impact Mortgage Rates this Week: July 7, 2014

mortgageporter-economyI hope you and your family had a fabulous holiday weekend. We began our holiday on our boat at Liberty Bay in Poulsbo with a beautiful display of fireworks on July 3rd – it was a lot of fun.

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What May Impact Mortgage Rates this Week: April 28, 2014 – Mortgage Rates are Lower!

mortgageporter-economyThis week is jam packed with data that may impact the direction of mortgage interest rates. Mortgage rates are based on bonds (mortgage backed securities) and are traded similar to stocks. Often times, mortgage rates will improve when we see the stock market taking a hit or rise when the stock market is rallying. This is because investors will trade the safety of bonds for the greater returns potentially found with stocks. The reverse is also true.

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What May Impact Mortgage Rates this Week: April 7, 2014

mortgageporter-economyThis week’s calendar may seem on the lighter side with regards to economic indicators scheduled to be released. There are no economic indicator scheduled to be released this week. On Wednesday, the FOMC Minutes are scheduled to be released and this probably has the potential to influence the direction of mortgage interest rates. Remember, mortgage rates are based on bonds (mortgage backed securities) and often move in the opposite direction of stocks.

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The Fed says Easy Squeezy $10B

2012-08-20-0845Yesterday wrapped up the Fed’s two day meeting and, as expected, there was no change to Fed Funds rate. They did announce in their statement they will ease off another cool $10 Billion per month starting in February of their mortgage backed security purchase program.

From the press release:

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What may impact mortgage rates this week: November 18, 2013

mortgageporter-economyLast week mortgage interest rates improved thanks to Janet Yellen indicating at her confirmation hearing that as our next Fed head, she will continue on with QE and support the Fed’s actions of buying mortgage backed  securities to keep mortgage interest rates artificially low. This was sweet news to the markets and we’re still seeing lower mortgage rates this morning.

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What May Impact Mortgage Interest Rates this Week: October 28, 2013

mortgageporter-economyThis week is packed with data that may drive mortgage rates higher or lower, including the Fed meeting which wraps up on Wednesday. It’s highly unlikely the Fed will make any changes to the Fed Funds Rate. Traders will be waiting for clues on when tapering may begin (it’s estimated will be pushed out to March 2014).  Remember, mortgage interest rates are based on bonds (mortgage backed securities – MBS) and change throughout the day, just like stocks do. It’s not unusual to have bonds react opposite of the stock market as investors will often trade the safety of bonds for the potential return found with stocks (and the reverse is true).

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Fed to Keep Mortgage Rates Sweet and Low

iStock-000020911287XSmallThe Fed made no changes to the Fed Funds rate… no surprise there. However, the Fed did surprise the markets today announcing they are not tapering their purchasing of mortgage backed securities. From today’s press release:

…Taking into account the extent of federal fiscal retrenchment, the Committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.  [Read more...]