What causes mortgage rates to go up or down? How come one day 30-year fixed rates are 6.00% and the next they’re 6.125%? For many people the vision of a boardroom full of cigar smoking bankers comes to mind when contemplating this question. Or, many believe that the Federal Reserve Bank holds ultimate control with […]
Mortgage rates rose Friday afternoon in response to inflation concerns surrounding oil prices. The economic calendar looks relatively light this week so we’ll be watching technical trading patterns as well as the stock market to forecast mortgage rates. In case you missed it last week I posted this blog about how the stock market can […]
Mortgage rates are lower again this morning thanks to the rally in the bond market yesterday afternoon. However, the party may be short lived. Mortgage rates have benefitted from a weak stock market over the past couple days (on a side note, I recently blogged about the relationship between the stock market and mortgage rates […]
Although inflation expectations are the primary factor that influence the direction of mortgage rates on a day-to-day basis the stock market can also have an impact. To understand how this relationship works it’s first important to understand how mortgage rates are determined. Mortgage rates are entirely determined by the price of mortgage-backed bonds (MBS’s). MBS’s […]
Technical trading patterns are what helped mortgage rates move lower yesterday afternoon. In yesterday’s ‘rate update’ we stated: “Mortgage-backed bond prices continue to trade just above important technical support. We are watching this level and hope that prices hold. If prices should slip we will shift our outlook to a locking stance.” Not only did […]
A report from the Labor Department showed worker productivity was better than expected in the first quarter. Furthermore, the report showed that labor costs increased less than economists had expected. Watch today’s you tube video to learn how productivity & labor costs can impact mortgage rates. Despite the positive economic news mortgage rates have reacted […]
A disappointing earnings report out of Fannie Mae is pressuring stocks lower this morning. This weakness is helping to support mortgage-backed bonds prices right at an important technical layer of support. If bonds can rally off this support level it would be a welcome sign for mortgage rates. Working against interest rates is the ever-increasing […]
Mortgage-backed bonds are coming under selling pressure this morning threatening the rate gains we made earlier on. Rates began the day .125% better than Friday morning’s rates thanks to weakness in the stock market stemming from the Yahoo/ Microsoft withdrawal. However, mortgage-backed bonds are now beginning to sell-off as well likely in response to some […]
Every once in a while we get it right and yesterday we certainly called the right play on the monthly jobs report strategy. Although the report showed a 25,000 job contraction in April it was still enough to beat analysts’ expectations which were calling for 75,000. As a result mortgage rates have moved higher. The […]
As you’ve likely heard the Fed did cut short-term interest rates by .25% yesterday. If you read yesterday’s ‘rate update’ you knew this would happen. We also explained that there were two scenarios that might play out in their post-meeting statement. It turns out that one of the two scenarios did take place. Here is […]