Mortgage rates are slightly improved this morning as the stock market is taking a bit of a hit. As I write this (8:45 am) the DOW is down about 200 points. It’s not unusual to see mortgage rates improve when the stock markets are selling off as investors will seek the safety of bonds. Mortgage rates are based on bonds (mortgage backed securities) and will often react opposite to the stock market.
This week we’ ll be watching for the minutes from the last FOMC meeting and the Jobs Report as they may impact the direction of mortgage interest rates. It’s anticipated that employers added 197k jobs in December. Here are the economic indicators scheduled to be released this week:
This week is packed with economic data that may impact mortgage the direction of mortgage interest rates including the Jobs Report on Friday. Here are some of the economic indicators scheduled to be released:
Mortgage rates continue to be at very low levels. Although they’re not at the lows from May, Freddie Mac’s Mortgage Market Survey reports that mortgage rates have been trending lower for the last four months. If you missed the refi-boat a few months ago, this may be your second chance. You may want to contact a local licensed mortgage professional for an updated mortgage rate quote (if your home is located anywhere in Washington state, I’m happy to help you).
It’s not only economic indicators that may impact the direction of mortgage rates, world events, such as what’s going on in Syria, may also cause rates to go down or up. This is because mortgage interest rates are based on mortgage backed securities (bonds) and when their is uncertainty in the world, investors may seek the safety of bonds, which tends to cause mortgage rates to improve. Remember, as the stock market improves, investors will trade the safety of bonds (like mortgage backed securities) for the potentially quicker returns found in stocks.
This week is packed full of economic data that may dramatically impact mortgage rates. Not only do we have the results of the Fed meeting on Wednesday, we wind up the week with the Jobs Report on Friday. I anticipate this will be another volatile week for mortgage interest rates.
This morning’s Jobs Report came in stronger than expected with 195,000 non-farm payroll jobs added in June vs the 166,ooo with positive revisions to May and April. The Jobs Report also revealed that average earnings are edging higher. This data helped mortgage rates continue on their upward trend and although rates are still historically low, we seem to be getting closer and closer to the 5% range for a 30 year fixed.
As of the writing of this post (2:00 pm on Friday, July 5, 2013) I’m quoting 4.750% (apr 4.876%) priced with 0.608 points for a purchase in Seattle. Here’s my rate tweet that I just posted:
This is 0.375% higher in rate than what I quoted on Monday or 2.34% higher in fees (discount points) as shown below.
Today, if you really want “Monday’s rate” of 4.375%, you can still have it…if you’re willing to pay 3.234 points which based on a loan amount of $400,000, this would cost $12,936 (apr 4.730%).
If you have been considering refinancing, you may want to do so soon! Rates have been moving higher ever since the Fed indicated they may pull back on their bond buying program which has kept rates at artificial saccharin sweet low levels for the past couple years.
Borrowers who have lower credit scores or higher loan to values are probably already seeing rates in the 5% range do to pricing adjustments (LLPAs) for conventional mortgages.
If you would like me to provide you with a rate quote for your purchase or refinance for your home located anywhere in Washington, I’m happy to help you!
This is a short week packed full of economic data that may impact already turbulent mortgage rates. It may look like a light week – watch for Friday’s Jobs Report. The bond and stock markets will close early Wednesday and reopen on Friday following the 4th of July holiday.
Monday, July 1: ISM Index
Wednesday, July 3: Initial Jobless Class and ISM Services Index
Thursday, July 4th: HAPPY INDEPENDENCE DAY
Friday, July 5: The Jobs Report
As I write this post, 9:00 am on July 1, 2013, I’m quoting 4.375% for a 30 year fixed rate (apr 4.523%) priced with 0.894 points based on a $500,000 sales price with 20% down payment and credit scores of 740 or higher. The DOW is up 161 at 15,017.
Remember, mortgage rates change constantly – often several times a day in a volatile market. In fact, by the time I publish this post, it’s possible rates or pricing for the rate, may have already changed.
If you would like me to provide you with a rate quote for your purchase or refinance of a home located anywhere in Washington state, where I’m licensed, please click here.