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…]

What May Impact Mortgage Rates this Week: August 19, 2013

mortgageporter-economyI hope you are having a wonderful summer. Our Seattle summer has been just beautiful – I don’t even mind the few days of rain we’ve had sprinkled in. Anyhow, you’re not reading this post for a weather report, are you? Let’s get back to what may impact mortgage interest rates this week! Today and Tuesday, we don’t have any economic indicators scheduled to be released. Wednesday is the big day with the minutes from the last Fed meeting being released.

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What may impact mortgage rates this week: July 29, 2013

Tmortgageporter-economyhis 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.

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What May Impact Mortgage Rates this Week: July 8, 2013

mortgageporter-economyThis morning, mortgage backed securities are recovering from Friday’s fiasco following the better than expected Jobs Report. On Wednesday, the minutes from the last Fed meeting will be released which may set mortgage rates off on another roller coaster ride.

Here are some of the economic indicators scheduled to be released this week:

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What may impact mortgage interest rates this week: June 17, 2013

On Wednesday, we’ll have the results of the Fed Meeting which is sure to influence mortgage rates as traders wait for clues as to what the Fed plans to do with quantitative easing. It is not anticipated that the Fed will make any changes to the Fed Funds rate at this meeting. Ben Bernanke will be holding a press conference on Wednesday following the Fed Meeting.

Here are some of the economic indicators scheduled to be released this week:

  • Monday, June 17:  Empire State Index
  • Tuesday, June 18: Building Permits; Consumer Price Index (CPI); Housing Starts
  • Wednesday, June 19: the FOMC Meeting
  • Thursday, June 20: Initial Jobless Claims; Existing Home Sales; Philadelphia Fed Index

Remember, mortgage rates are based on mortgage backed securities (bonds) and when the stock market is rallying, mortgage rates tend to deteriorate as investors will trade the safety of bonds for the potentially stronger return found with stocks. The reverse is also true.

Want more details? Check out this week’s issue of Mortgage Market Guide Weekly.

If you would like me to provide you with a mortgage rates quote for your refinance or purchase for a home located anywhere in Washington state, where I’m licensed, click here.

What the Fed Said

This morning, mortgage rates continue to take a hit from yesterday’s comments by Mr. Ben Bernanke before and after the Fed minutes were released.

Prior to the minutes being released, it seemed as though Ben was letting the cat out of the bag by eeking information regarding the economy, QE3 and the continuation of keeping mortgage rates at their artificial lows. Bernanke had stated that bond buying would continue until labor markets improved, which the bond market favored.

The minutes were released revealing mixed views on when the Fed should pull back on buying bonds, like mortgage backed securities:

“Participants also touched on the conditions under which it might be appropriate to change the pace of asset purchases. Most observed that the outlook for the labor market had shown progress since the program was started in September, but many of these participants indicated that continued progress, more confidence in the outlook, or diminished downside risks would be required before slowing the pace of purchases would become appropriate. A number of participants expressed willingness to adjust the flow of purchases downward as early as the June meeting if the economic information received by that time showed evidence of sufficiently strong and sustained growth; however, views differed about what evidence would be necessary and the likelihood of that outcome. One participant preferred to begin decreasing the rate of purchases immediately, while another participant preferred to add more monetary accommodation at the current meeting and mentioned that the Committee had several other tools it could potentially use to do so. Most participants emphasized that it was important for the Committee to be prepared to adjust the pace of its purchases up or down as needed to align the degree of policy accommodation with changes in the outlook for the labor market and inflation as well as the extent of progress toward the Committee’s economic objectives. Regarding the composition of purchases, one participant expressed the view that, in light of the substantial improvement in the housing market and to avoid further credit allocation across sectors of the economy, the Committee should start to shift any asset purchases away from MBS and toward Treasury securities….

….In their discussion of monetary policy for the period ahead, all but one member judged that a highly accommodative stance of monetary policy was warranted in order to foster a stronger economic recovery in a context of price stability. The Committee agreed to continue purchases of MBS at a pace of $40 billion per month and purchases of longer-term Treasury securities at a pace of $45 billion per month, as well as to maintain the Committee’s reinvestment policies….”

In the Q&A following the release of the FOMC minutes, Ben Bernanke commented that if economic conditions continue to improve, that bond purchases could be tapered by the next Fed meeting in June or July. This caused mortgage rates to trend higher… and today, that trend is continuing.

If you’ve been considering refinancing at a historic low rate, you may want to take action soon! Once the Fed stops manipulating mortgage rates, they’ll be closer to current jumbo/non-conforming rates.

I’m happy to help you with your refinance or purchase on your home located anywhere in Washington state.

What may impact mortgage rates the week of April 29, 2013

This week is jam packed with economic data that may move mortgage rates, including the Fed meeting wrapping up on Wednesday and Friday’s Jobs Report.

This morning’s PCE came in with inflation continuing to be tame (good news for bonds, like mortgage backed securities). And more good news for housing, Pending Home Sales for March came in much stronger than expected.

Here are some of the economic indicators scheduled to be released this week:

Monday, April 29: Personal Consumption Expenditures and Core PCE; Pending Home Sales

Tuesday, April 30: Employment Cost Index (ECI); S&P/Case-Shiller Home Price Index; Chicago PMI; Consumer Confidence

Wednesday, May 1: ADP National Employment Report; ISM Index; FOMC Meeting

Thursday, May 2: Productivity and Initial Jobless Claims

Friday: The Jobs Report; ISM Services Index

As I get ready to publish this post (9:30 am) the DOW is up 94 points at 14,806 and mortgage backed securities are up 12 bps (FNMA 30 year 3.0%).

If you want to keep current with the results from the economic indicators for the rest of this week, you can follow me on Twitter @mortgageporter or Facebook.

Of course if you are considering buying or refinancing a home located in Everett, Edmonds, Enumclaw or anywhere in Washington state, where I’m licensed, I’m happy to help you – click here for a mortgage rate quote.