News for Today:
Bonds and Mortgage Backed Securities (MBS) opened in positive territory again today following weaker than expected economic news. Stock markets are down this morning.
Remember, on MBS, as the price goes up, the yield goes down - and so do mortgage interest rates. Conversely, as the price goes down, the yield goes up - and so do mortgage interest rates. I'm expecting mortgage rates to improve by as much as ½ of a discount point.
The Institute for Supply Management (ISM) released the manufacturing index for November today. It showed a reading of 36.2. That was below a forecasted reading of 38.4, and is the lowest reading since May 1982. That indicates that manufacturer sentiment is weaker than many had thought. Because that hints at slower manufacturing activity, it's considered good news for bonds and mortgage rates.
Also released this morning was the Construction Spending report. This report shows the dollar value of new construction activity on residential, non-residential, and public projects. Analysts expected a decline of 0.9%. The report indicated a decline of 1.2% in construction spending last month.
The recent rally in bonds has put it in uncharted territory in terms of yields. The benchmark 10-Year Treasury Note is currently yielding 2.82%, which is the lowest on record. It fell below 3.00% last week for the first time since the Notes were issued in 1962. While mortgage rates have not plummeted as quickly as treasury bond yields have, they have fallen quite a bit and show signs that they may continue to fall. The downside to that is bond yields and mortgage rates might spike higher later this week. Bond yields and mortgage rates can worsen much quicker than they usually improve.
There is relevant economic news scheduled for four of the five days this week, and we can expect to see another active week for mortgage rates. Overall, the most important day of the week is Friday with the employment figures being released, but today will also likely be one of the more important. Look for more details on this week's economic data releases and events in my Weekly Mortgage Market Watch.
Rate Volatility Index for Today:
Continued Volatility. I think this could be another fairly active day for mortgage rates. So please maintain regular contact with your mortgage professional.
My Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.
Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.
As always, you can call me toll-free at (866) 684-1233 ext. 3913 to answer any questions you have about mortgage programs and interest rates, and to discuss your best loan options.
My Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.
Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.
My Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.
Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.
My Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.
Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.
Bonds and Mortgage Backed Securities (MBS) opened well in positive territory this morning after the Feds announced a program to purchase up to $100 Billion in direct obligations of the Government Sponsored Enterprises (GSEs) (Fannie Mae, Freddie Mac, and the Federal Home Loan Banks), and up to $500 Billion in mortgage backed securities.
Remember, on MBS, as the price goes up, the yield goes down - and so do mortgage interest rates.
This news alone has caused rates to drop by almost .50% - that's right! - a half of 1 percent - overnight! If you have been waiting to buy a home or refinance a mortgage, now's the time. Lenders will be swamped with business, so get your loan in!
Always there for my customers and the communities I serve! As a Senior Mortgage Consultant, I'm committed to providing excellent service while assisting you in your home financing needs.
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