Mortgage Rate Update July 21, 2014

Mortgage note rates are mostly unchanged to start the week but the accompanying closing costs are modestly lower.

Geopolitical tension is helping to keep mortgage rates low here in the US.  Fighting in Gaza City escalated over the weekend between Israel and Hamas.


Moreover the political unrest between Ukraine and Russia also escalated over the weekend as each side blamed the other for the downing of an aircraft last Thursday.

Global political uncertainty benefits US interest rates because investors seek “safe” alternatives for capital.  As a result, demand for US dollar-denominated securities goes up which helps keep yields low.

The economic calendar is relatively dense this week.  There are not a lot of reports due out but those that are scheduled for release are significant.  Tomorrow we’ll get the latest reading for the Consumer Price Index.  Ordinarily inflation is the primary driver of interest rates and we have seen price pressure pick up in the past couple months.

From a technical perspective mortgage rates look attractive right now so its tough not to lock.  However, momentum is on our side so I will recommend a floating position for now.  But, be prepared to lock.

Current Outlook: floating

November 2009 newsletter

Our November 2009 newsletter is out and available.  They will be hitting mail slots this weekend.  You can click this link to view a copy.

The cover story covers details about the extension and expansion of the home-buying credit.

The article on the reverse side is about my academic pursuits at the University of Portland.


Rate Update July 24, 2009

Mortgage rates are unchanged from yesterday (mortgage rates moved modestly higher yesterday. See this morning’s you tube video to learn more about the cause of mortgage rates increasing and what we can laern from it.

The chart below shows mortgage rates ticking higher after hitting a low:

Rate Update July 21, 2009

Mortgage rates appear poised to move lower this morning.  Despite positive earnings reports that have helped stocks to move higher, mortgage-backed bonds have rallied this morning thanks to comments made by Fed Chairman Ben Bernanke.

Watch today’s you tube video for details on what he said.

Click this link to view Fed Chairman Bernanke’s Op-ed piece in this morning’s WSJ.

Current Outlook: floating

Rate Update July 16, 2009

Mortgage rates did move higher yesterday afternoon but have dropped back to yesterday’s levels this morning.

For the last week we’ve been stressing the importance of the financial sector during this 2nd-quarter earnings season.  On Tuesday Goldman Sachs reported better than expected earnings which pushed rates higher.  This morning JP Morgan reported better than expected earnings but also warned against larger loan losses in the second half of the year.  These comments are hurting financial stocks which is part of the reason mortgage rates recovered from yesterday afternoon’s increase.  Tomorrow Citigroup and Bank of America report earnings.

In other financial news lender CIT has announced that unless it can raise $2 billion in additional capital it will be forced to file for bankruptcy in the next 24 hours.  If this were to happen it would be another blow to the economy as CIT is a major lender to thousands of small businesses across the nation.  It is unclear whether the market fully understands the impact of this announcement.

With the poor outlook given by JP Morgan and the CIT news we are going to shift into a floating position.  I believe Citi & B of A will also warn against upcoming loan losses which will dampen the outlook for stocks; helping to push mortgage rates lower.

Current Outlook: floating

Rate Update July 10, 2009

Overall mortgage rates are essentially unchanged this morning.

Although mortgage-backed bond prices declined yesterday afternoon threatening to push mortgage rates higher; they have rallied this morning on weaker than expected consumer confidence figures.

Early on in 2nd-quarter earnings season there hasn’t been too many surprises.  The bulk of reports will begin to roll out next week and we still believe this is the most important story to follow.  We’ll keep you posted.

Current Outlook: bias towards locking

Rate Update July 6, 2009

Mortgage rates are essentially unchanged this morning despite an economic storyline that would typically help rates move lower.

Equity markets around the world traded lower today as investors pull back on stocks ahead of earnings season which kicks off on Wednesday.  The US Dollar is trading higher against foreign currencies and oil prices are lower.  This inflation-easing news has yet to help mortgage rates because of technical trading patterns.

We’ll keep a close eye on the market over the next couple days to see if bond prices can break through the 50-day moving average.  If they can, expect lower mortgage rates later in the week.  However, we’re taking a risk because it’s also very possible for bond prices to bounce lower here which would push rates higher.

Current Outlook: Cautiously floating