Mortgage rate update for the week of February 25, 2013

February 25, 2013 by Leave a Comment

This week is packed with economic indicators that may impact the direction of mortgage interest rates. Mortgage rates have been slowly inching higher since the end of last year. Rates are still very low and you can still get a 30 year in the 3’s – the rate just cost more than it did a month ago.

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

Tuesday, February 26: S&P/Case-Shiller Home Price Index, New Home Sales and Consumer Confidence

Wednesday, February 27: Durable Goods Orders and Pending Home Sales

Thursday, February 28: Initial Jobless Claims, GDP – Gross Domestic Product and Chicago PMI

Friday, March 1: Personal Consumption Expenditures and Core PCE, ISM Index and Consumer Sentiment Index (UoM)

Tomorrow, Fed Chairman Ben Bernanke will be in front of Congress to begin his two day testimony on monetary policy. In addition, $85 billion in automatic budget cuts are set to go into effect on Friday unless Congress takes action.

Remember, mortgage rates are based on mortgage backed securities (bonds) and when stocks are performing, mortgage rates tend to rise. This is because investors will trade the safety of bonds for the possible higher return available from stocks.

The only way to secure today’s mortgage rate is by locking it! You can see examples of “live” mortgage rates I’m quoting by following me on Twitter @mortgageporter or Facebook/WashingtonMortgagePro.

If I can help you with your refinance or home purchase on property located anywhere in Washington state, please contact me.

Filed Under: Economy Tagged With: , , ,

The Fed Says…Let’s Twist

September 13, 2012 by Leave a Comment

No surprise that the FOMC is not making any changes to the Fed Funds rate. What may have surprised some is the Fed’s focus on trying to keep mortgage rates low with it’s purchase of mortgage backed securities.  From today’s press release:

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee agreed today to increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month. The Committee also will continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

….If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities….

The efforts to keep mortgage rates low will be in contrast to the increase in the “g-fees” by Fannie Mae and Freddie Mac. It will be interesting to see how much of an impact the Feds efforts will make.

Stay tuned for Ben Bernanke’s press conference happening in a few hours. Meanwhile… let’s twist!

Filed Under: The Fed - FOMC Tagged With: , , , ,

Mortgage rate update for the week of August 20, 2012

August 20, 2012 by Leave a Comment

Mortgage rates have been trending higher over the past few weeks (they are still very low).  Here are some of the scheduled economic indicators that may impact mortgage rates this week:

  • Wednesday, August 22: Existing Home Sales and FOMC Minutes
  • Thursday, August 23: Initial Jobless Claims and New Home Sales
  • Friday, August 24: Durable Good Orders

As I write this post (9:00 am PST) the DOW is at a 4.5 year high (13,260). Remember that as the stock markets improve, you will see investors trade the safety of bonds (like mortgage backed securities) for the possibility of higher returns of stocks. This will cause mortgage rates to trend higher as will signs of inflation or that the economy is improving.

Clients often ask me if the government controls mortgage rates and are surprised to learn they do not. The government has been involved with buying mortgage backed securities which is manipulating mortgage rates to lower levels however, they do not directly set mortgage rates. The Fed does set the Fed Funds Rate, which impacts the rates for HELOCs but not mortgage rates. 

Mortgage rates often change throughout the day. Last week, there were days where one of the lenders I work with issued three to five changes in just one day.  

Filed Under: Economy Tagged With: , ,

Poll Results: How Would You Like Your Mortgage Originator Compensated?

April 30, 2010 by Leave a Comment

Surveysays

Our poll is over and I’m actually a little surprised by the results: a majority prefers the current most common form of mortgage originator compensation.

Points, based on a percentage of the loan amount received 48.9% of the vote.   Followed by hourly, based on work performed, at 31.1%.  Paying your mortgage originator a flat fee, the same fee for everyone, came in last at 20%.

I hope the FED and Washington State’s DFI reads this… right now they’re both trying to change how mortgage originators are paid. 

Shouldn’t it be up to the consumer?  They have the right to vote with their feet.  If they don’t like how a mortgage originator feels they should be compensated, they can walk.

Our government getting involved with how an industry is paid is very troubling to me.  

Your thoughts?

Filed Under: Polls Tagged With: , ,
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