Tag: 2016

Mortgage Rate Update September 29, 2016

Posted on by Evan in Rate Update, Swanson Home Loans Blog - Mortgage Rate Updates and More

Mortgage rates are unchanged today.

Earlier this morning the Commerce Department released figures for 2nd quarter Gross Domestic Product (GDP).  The report showed the US economy grew at a 1.4% annual clip which was higher than the .8% growth during the first quarter but slower than the ~2% average we’ve experienced during this economic expansion.

The Wall Street Journal reported yesterday that members of OPEC have agreed in principle to a future cut in oil production.  If a significant agreement is reached and oil prices rise that would promote inflationary pressure which would not be good for mortgage rates.  That said, OPEC’s record on reaching agreement amongst all its members is questionable.

The National Association of Realtors reported that pending home sales declined by 2.4% in August.  Low inventory continues to impact the housing market.

09-29-portland-mortgage-pending-home-sales9-29-2016

The technical outlook for interest rates is neutral.  I am going to recommend a locking bias as it feels like momentum may be shifting.

Current Outlook: locking bias

Mortgage Rate Update June 27, 2016

Posted on by Evan in Rate Update, Swanson Home Loans Blog - Mortgage Rate Updates and More

Unless you live under a rock you are aware of the outcome of Britain’s vote on Thursday last week.  The ripple effect of “Brexit” continues to reverberate through the markets this morning and US interest rates are benefiting.

The S&P 500 is off 5.4% from Thursday and the yield on the US 10-year treasury has fallen from ~1.8% on Thursday down to ~1.45% today.  Mortgage rates tend to track changes to the US 10-year treasury yield.

Portland OR Mortgage Rates SP500

Although Britain is only the 7th largest trading partner for the US a “Brexit” is causing the US dollar to strengthen which will likely drag down economic growth.

Looking ahead the economic calendar for the week gets busy starting tomorrow with GDP and the Case Shiller Home Price Index report.  On Wednesday we’ll get the most recent inflation figures.  For now we’ll continue to float and see if rates improve further.

Current Outlook: floating

Mortgage Rate Update February 18, 2016

Posted on by Evan in Rate Update, Swanson Home Loans Blog - Mortgage Rate Updates and More

Mortgage rates are unchanged from Monday.  Mortgage rates remain slightly worse as compared to last Wednesday-Thursday.

US stocks started the day higher but have since stalled, which bodes well for interest rates.  Worries over slowing global growth have re-emerged which drives capital into perceived “safe-havens” including the US debt markets and drives our yields lower.

Is the US economy on the brink of an economic slowdown?  The Philadelphia Fed released its monthly barometer for manufacturing and it remained in negative territory which signals continued contraction for manufacturing.  Bad news for the economy tends to be good news for mortgage rates.

Continuous weakness in the manufacturing sector has some investors worried.
Continuous weakness in the manufacturing sector has some investors worried.

Tomorrow we’ll get the latest reading on the Consumer Price Index (CPI).  Inflationary pressure remains weak in our economy (exception: housing costs in Portland, OR) and we’ll see if that trend continues. If so, that fact coupled with fears over an economic slowdown will put the Fed on hold in hiking short-term interest rates.  The next Fed monetary policy meeting is scheduled for March 15th-16th and the markets think there is a 94% chance the Fed will not hike.

From a technical perspective there is reason to believe that mortgage rates can regain the .125% they lost late last week so I am going to recommend cautiously floating.

Current Outlook: floating

Mortgage Rate Update February 4, 2016

Posted on by Evan in Rate Update, Swanson Home Loans Blog - Mortgage Rate Updates and More

Rates are mainly unchanged from Monday.  Mortgage rates have improved by .25%-.375% over the past 3 months. The chart below demonstrates the correlation between changes in the US-10 year and mortgage rates.

02-04-10yr

Tomorrow we get the latest all-important monthly jobs report from the Bureau of Labor Statistics.  In case you’ve forgotten last month’s report showed that 292,000 new jobs were created but a deeper look into the report showed that many of those were seasonal.  As a result, despite the stronger than expected headline number mortgage rates did not increase you we would have expected.

The markets are currently expecting only 188,000 new jobs created during the month of January.  Given the lower bar it would seem more likely that the report could surprise to the upside which would hurt mortgage rates.  However, looking at the aforementioned chart we do have momentum on our side.

The next Fed meeting is scheduled for March 15th-16th so this jobs report will not have as much significance because there will be one more released on Friday, March 4th.

The monthly jobs report is always difficult to handicap.  The momentum in the marketplace is playing to our favor so I am inclined to float.  That said, we’ve had a great run in the past 90 days so the safe play is to lock in while we’re ahead.

Current Outlook: locking bias