Tag: portland mortgage broker

Mortgage Rate Update April 24, 2017

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

In case you have not set plans in motion I want to let you know that tomorrow is National Hug a Plumber Day.  You may want to contact one today and set up an appointment.  Don’t be surprised if they are a couple hours late.

Last week mortgage rates lost a little bit of ground but overall the current level of interest rates is better than they’ve been since the election last November.

Speaking of elections, over the weekend France conducted the first round of their presidential vote.  Centrist Emmanuel Macron and far right candidate Marine Le Pen appear to be headed for a run-off which will take place on May 7th.  It is expected that Macron will defeat Le Pen but let us not forget it was also expected that Secretary Clinton would defeat President Trump.  Global stock markets are reacting favorably to France’s election results which is putting pressure on US interest rates.

The yield on the US 10-year treasury note, which mortgage rates tend to follow, hit a multi-month low at 2.20% last week.  However, this morning the yield is back up to 2.27% and trending higher.  Not surprising, mortgage rates are also priced slightly worse to start this week.  From a technical perspective it appears that yields will likely move higher this week (I am guessing to ~2.40%).

The economic calendar is rich with housing data this week.  On Tuesday we’ll get the S&P Case Shiller home price index report and the FHFA house price index.  With housing supply tight across the country it is expected that these releases will show continued appreciation rates that exceed historical averages.  On Thursday we’ll get Pending Home Sales from the National Association of Realtors.

Since momentum is working against us I am going to recommend a locking bias for the first part of this week.

Current Outlook: locking bias

Mortgage Rate Update April 17, 2017

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

On this day in 1961 the Bay of Pigs invasion began.  As we know the attempt to overthrow Fidel Castro was a complete failure as it ultimately solidified the relationship between Russia and Cuba and enhanced Cold War tensions.

Speaking of tensions US interest rates have benefited from growing geopolitical uncertainty.  Global investors do not like being exposed to “risky” assets during potentially turbulent times and therefore we are experiencing a “flight-to-safety” which drives US interest rates down.

Also helping to drive rates lower has been a shift in expectations regarding the Trump Administration’s fiscal stimulus plans.  No details have been released but the markets think a much more watered down version will have to be presented in order to win congressional approval.  A more aggressive stimulus plan would add inflationary pressure to the economy and hurt interest rates and vice versa.

A less aggressive stimulus plan could also hurt US stocks.  As measured by the Shiller Price-to-Earnings ratio, which is the ratio of the S&P 500’s price divided by its average inflation-adjusted earnings from the previous 10 years, the stock market appears ripe for reversal.  If US stocks do move lower it should help interest rates remain at current levels or maybe even better.

The economic calendar for the week is heavy with fresh housing data.  This morning the home builder index, which measures optimism for US home builders, came in slightly below expectations.  Tomorrow we get housing starts and building permits.  Finally, on Friday the National Association of Realtors will release the latest existing home sales figures.

Momentum is still on our side so I will float.

Current Outlook: floating

Mortgage Rate Update April 10, 2017

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

In case you weren’t aware today is National Siblings Day.  Now is a great time to call your sibling and let them know how “okay” they are (just kidding Ceri!  You are awesome).

Friday’s all-important jobs report showed that only 98,000 new jobs were created last month.  This was well below expectations and the lowest output since May of 2016.  Bad news for the economy tends to be good news for mortgage rates.

Also helping mortgage rates is the uncertainty regarding Syria and the US military action which took place last week.  Geopolitical tension tends to drive global investors into “safe havens” which benefits interest rates here in the US.

This week’s economic calendar is fairly light.  The highlights come Thursday and Friday when the Producer Price Index & Consumer Price Index are released.  Fed Chairwoman Janet Yellen is scheduled to speak later today and take questions via Twitter.  Might she hint when the Fed will begin to unwind their balance sheet (which would likely put upward pressure on rates)?

From a technical perspective mortgage rates are presently at the low end of their trading range dating back to December.  In other words, rates are currently as good as they have been for the past four months.  Could they get better?  Sure but the last four times they got hear they reversed and moved higher so I am going to maintain a locking bias.

Current Outlook: locking bias

Mortgage Rate Update April 3, 2017

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

Are looking forward to tonight’s NCAA men’s basketball championship game between Gonzaga and North Carolina?  Did you know the greatest upset of  all-time came on this day in 1978 when the Movie ‘Annie Hall’ beat out ‘Star Wars’ for best picture?  Absurd.

We start the week with mortgage rates at the best levels since late February.  This is partially because of the unfortunate subway blast which took place in St. Petersburg, Russia earlier today.  Geopolitical uncertainty tends to drive investors into safe-havens which helps US interest rates.

This mornings subway blast in Russia is causing investors to seek safety which is driving US home loan rates lower.

The financial markets are seeing some follow through on President Trump’s failed attempt to repeal the Affordable Care Act.  The Trump administration had planned to spend some of the Federal Government’s savings on a fiscal stimulus package which will have to be scaled back now.  Rates had been pressured higher on the expectation of a large fiscal stimulus package and are moving back down now.

The economic calendar heats up on Wednesday this week with the release of the minutes from the Fed’s latest monetary policy meeting.  Analysts are eager to learn more about the committee’s plan to unwind the Fed’s balance sheet which grew during the housing downturn via quantitative easing.  The Fed is a major holder of mortgage-backed securities which ultimately determine mortgage rates.  Should they aggressively sell off these assets it would put upward pressure on mortgage rates.

Finally, the all-important monthly jobs report is due out this Friday.  The market is currently expecting ~175,000 new jobs.  A number north of that would hurt mortgage rates and vice versa.

From a technical perspective momentum is on our side but given that we’re at multi-week lows I like a locking bias.

Current Outlook: locking bias

Mortgage Rate Update March 13, 2017

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

Mortgage rates had a rough time last week.  They now stand at their worst levels in over two years.

Friday’s all-important jobs report was better than expected.  It showed that 235,000 jobs were created during the month of February and that wages increased by 2.8% year-over-year.  With these results the Fed is almost certain to hike short-term rates by .25% again on Wednesday.

Should we be concerned that mortgage rates will also increase?  After all the Fed does not directly set mortgage rates.  Mortgage rates drifted higher last week in anticipation of a Fed rate hike so in some respects the damage is done.  Furthermore, when the Fed hiked in December mortgage rates declined shortly thereafter.  Maybe we will experience the same reaction this go around.

From a technical perspective interest rates appear ripe for reversal after trending higher last week.  The yield on the US 10-year treasury note touched ~2.63% on Friday and is starting the week moderately lower.

However, we have to be careful because if yields move above the 2.63% threshold mortgage rates will continue higher as well.

This week’s economic calendar is busy.  The highlights include the Producer Price Index (Tuesday), Consumer Price Index (Wednesday), Retail Sales (Wednesday), Housing Starts (Thursday), and of course national Guinness Consumption Day (Friday).

Current Outlook: floating

Mortgage Rate Update March 6, 2017

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

Mortgage rates are unchanged from Thursday.  Also unchanged?  My antipathy for wintry weather.  As far as I am concerned Punxsutawney Phil can shove it.

This week’s economic calendar is busy.  Financial markets will be primarily focused on a trifecta of employment data which will conclude on Friday with the all-important jobs report.  The markets are expecting +188,000 new jobs.  If the jobs numbers comes in at or above that level then most analysts think a Fed rate hike next week is imminent.

As I have written time and time again mortgage rates ultimately react to inflation expectations.  If a lender believes that the purchasing power of the dollars used to repay the loan in the future will be lower then they will ask to be compensated in a higher interest rate.

Might this be the best predictor of mortgage rates?

What causes inflation?  As the ‘Wall Street Journal’ reported in THIS ARTICLE our paradigm might be all wrong.  Might mortgage rates be correlated to oil prices?  If so then we’ll be able to get mortgage rate forecasts every time we drive by a gas station.

The technical outlook looks favorable for mortgage rates.  I will maintain a floating position.

Current Outlook: floating

Mortgage Rate Update March 2, 2017

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

Hopefully you took the advice on Monday to lock because mortgage rates have worsened this week.

Do you want to see a naked picture on snapchat?  If so, you can see one HERE.  Punny, right?

Speaking of snapchat it’s shares start trading on Wall Street today.  Get yours before they disappear.  Stocks continue to rally unabated.  The Dow Jones Industrial Average and S&P 500 created new highs yesterday.  When stocks rally it tends to hurt mortgage rates.

Headed into this week the markets had assigned a 22% probability that the Fed would hike rates at their next meeting scheduled for March 14-15.  However on Tuesday San Francisco Federal Reserve President John Williams said that a rate hike was “very much on the table for serious consideration.”  Despite this being as affirmative as Abe Lincoln’s famous line “I’m almost certain that is probably true” the markets are now assigning a 75% chance the Fed will hike.  Reminder, the Fed DOES NOT directly control mortgage rates.  Even so shameless mortgage companies will use this as bait to try and get borrowers to rush into decisions.

Do you remember this chart from a couple weeks ago?  The good news is that the yield on the US 10-year treasury note, which mortgage rates tend to track, remains range bound.


The last four times times that yield has reached 2.50% they have reversed and moved lower.  Assuming history repeats itself then lower mortgage rates should be available in the days to come.  I recommend floating.

Current Outlook: floating

Mortgage Rate Update February 27, 2017

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

Shifting to a ‘floating bias’ on Thursday of last week has proved timely as yields have improved.  Speaking of floating today is National Polar Bear Day.  Apparently you can bake “cubcakes” if you really want celebrate.

As far as mortgage rates are concerned we are no longer floating.

Mortgage rates had a great ride last week but momentum appears to be shifting.  As the French presidential election draws nearer (scheduled to complete May 7, 2017) I expect that polling will be more and more significant for US interest rates.  Why?

Anti-European Union candidate Marine Le Pen is considered to be an anti-status quo candidate.  The financial markets like certainty.  Therefore, when Le Pen’s polling appears stronger US mortgage rates will improve on perceived uncertainty and vice versa.  Polling released over the weekend showed her down which is bad news for mortgage rates.

President Trump is scheduled to speak in front of a joint session of congress tomorrow afternoon.  Analysts are expecting that he will roll out a major policy initiative.  Depending on what that policy is it could impact mortgage rates.  Specifically, if he announces a major infrastructure package I would expect mortgage rates to worsen in reaction.

This week’s economic calendar is fairly busy with highlights on Tuesday (GPD) and Wednesday (Personal income & inflation).  Given that the technical trading picture has shifted I am going to recommend locking in now.

Current Outlook: locking

Mortgage Rate Update February 13, 2017

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

Mortgage rates worsened during the latter half of last week.

Mortgage rates will be looking for love tomorrow from Fed Chairwoman Janet Yellen.  She is scheduled to provide testimony to congressional lawmakers tomorrow and Wednesday.  Much like the origins of St. Valentine’s Day are not well understood neither is the relationship between the Fed and mortgage rates.

Mortgage rates are looking for some love from the Fed this week.

I am particularly interested to hear if Yellen will comment on when they might discontinue the practice of reinvesting principal repayments back into the mortgage-backed bond (MBS) market.

You might remember the term “quantitative easing” (“QE”) which was thrown around exhaustively from 2009-2012.  During this time the Federal Reserve essentially printed money and purchased, amongst other things, mortgage-backed bonds with the intent of driving interest rates lower.  Although the Fed is no longer actively engaging in “QE” they are using the principal repayments from refinances and home sales to repurchase/ replace MBS holdings which in effect helps to keep rates down.  If and when they discontinue this practice we could expect mortgage rates to worsen.

Looking at the rest of the economic calendar for the week we’ll get some fresh inflation data Tuesday and Wednesday, retail sales on Wednesday, and new housing starts on Thursday.

Unfortunately momentum is working against us so I will maintain a locking bias.

Current Outlook: locking

Mortgage Rate Update February 9, 2017

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

Mortgage rates continued to improve modestly this week and are currently at multi-week lows.  That said pricing is modestly worse this morning so momentum may be shifting.

With heavy snow covering much of the northeastern seaboard we have to be prepared for some volatility in the financial markets.  Its likely that fewer traders are able to make it into their offices and therefore we can assume there are fewer buyers and sellers which can lead to wider swings.

As I stated on Monday the economic calendar has been light this week.  In the absence of significant data mortgage rates tend to react to technical trading patterns and the stock market.

The technical outlook is not favorable.  The yield on the US 10-year treasury, which mortgage rates tend to track, has traded between 2.30%-2.60% since the end of November.  It got down to 2.34% yesterday and has bounced to 2.38% this morning.  Unless the yield can dip below 2.30% it looks as if rates may reverse trend higher.

Stocks are also rallying this morning on news that the Trump administration intends on accelerating tax cuts.  When stocks rally it tends to hurt mortgage rates.

I will maintain a locking recommendation.

Current Outlook: locking