Tag: Portland mortgage rates

Home price gains moderate while mortgage rates improve

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

Every Tuesday I try to explain what is happening in the financial markets that will impact mortgage rates.  The truth is sometimes I highlight factors that do influence interest rates and sometimes I don’t.  Sometimes mortgage rates fluctuate……just because.

Today is National Just Because Day so if there is something you’ve been wanting to do but never done it.  Well…. today is your day.

Mortgage Rates

Two weeks ago I highlighted the divide between fixed mortgage rates and the yield on the US 10-year treasury.  At that time the 10-year treasury yield had fallen by .40% while mortgage rates had only improved by .25%.

As I had expected and hoped, that spread tightened this week as mortgage rates have improved by ~.25% and the 10-year treasury yield has only improved by ~.125%.

Home Prices

The S&P Case Shiller Home Price Index report was released earlier today and showed that home price appreciation slowed in June to +3.1% nationwide (down from +3.4% the prior month).  In Portland home price gains remained at +2.4% year-over-year which is unchanged from the previous month.

Home Prices during recessions

As the US yield curve continues to invert the media is growing more focused on the possibility of a recession in 2020.  Some prospective home buyers are assuming that if a recession does take place that home prices will fall.

However, it’s important to note that prior to the most recent economic recession, which was primarily caused by speculation in housing, home prices in the Portland-metro region actually increased during economic slowdowns.

Therefore, if a consumer is planning to wait for home prices to drop they may be disappointed.

Outlook

The remainder of the economic calendar this week is light and we expect trading volumes to be low as we head into Labor Day weekend.  Momentum remains on our side so I will maintain a floating bias.

Current Outlook: floating bias

Mortgage rates slightly improved

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

Feeling busy and anxious about all the things you have to get done?

Just remember, “stressed” spelled backwards is “dessert” and today is National Vanilla Ice Cream Day!

Interest Rates

Home loan rates have improved modestly from last week.

Existing Home Sales

The National Association of Realtors released figures earlier today which showed that the number of existing home sales slid 2.2% in May compared to a year earlier.  Despite low mortgage rates and a strong labor market a lack of housing supply is causing the number of units sales to decline.

Home Prices

According to the aforementioned report the median home price in the US increased for the 88th consecutive month.  A median priced home increased by 4.3% compared to a year earlier and is at historic highs.

The Fed

The Fed is scheduled to meet next week and is widely expected to cut short-term interest rates.  The markets are currently predicting a .25% cut but some think the Fed may come up and slash rates by .50%.

This rate cut is already baked into the rates consumers see today.  As a reminder, the Fed does not directly set mortgage rates.

Outlook

From a technical perspective mortgage-backed bonds have some room to rally which would help interest rates improve.

The remainder of this week’s economic calendar is relatively quiet.

Current Outlook: floating bias

Mortgage rates back off of historical lows as economic outlook is mixed

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

You can file this one in the “wish I had reason to celebrate” folder.  Today is #NationalPersonalChefDay!  Don’t forget to pat your chef on the back and thank them for all their hard work.

Interest Rates

Mortgage rates are unchanged this week after increasing by ~.125% last week.

Recession looming?

The US economy is currently in the longest economic expansion in modern history.  It started back in 2009 and has been in tact for 121 months.  Naturally, all good things must come to an end and as this growth pattern grows long in the tooth more and more economists will begin to predict a near-term recession.

Earlier today an index that tracks global freight movement was released and showed seven straight months of contraction.  According to the report the US economy is, “signaling economic contraction.”

I am not sure how reliable this indicator is but if the US economy does move towards economic contraction one would think that US mortgage rates would improve.

Or not…..

Earlier today the monthly retail sales report showed stronger than expected consumer activity.  Furthermore, an index which gauges homebuilders’ confidence also came in higher than anticipated.

The rest of the week

The remainder of the week features Fed Chairman Jerome Powell speaking (later today), housing starts/ building permits (Wednesday), and leading economic indicators (Thursday).

Outlook

In the near term mortgage rates are testing important technical layers.  I expect mortgage rates to be at these levels or possibly even higher in the next 3-7 days.  Beyond that I think mortgage rates will come back down.

Current Outlook: floating bias

Rates modestly worse but long-term trend in tact

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

Congratulations to the US Women’s soccer team who capped a dominating performance on Sunday by winning the World Cup.  The US recorded 26 goals during their seven games in the World Cup and only gave up 3!

Interest Rates

Mortgage rates are modestly worse to start the week after the Bureau of Labor Statistics released a stronger than expected employment report on Friday.

Jobs Report

The all-important jobs report showed that 224,000 new jobs were created during the month of June and eased recession concerns.  Yields increased modestly following the release.

Home Loan Performance

A strong labor market and healthy home price appreciation is creating conditions for low delinquency.  CoreLogic’s monthly Home Loan Performance Insights Report was released earlier today and shows delinquency is currently at a 20-year low across the US!  It’s hard to imagine a housing crash is on the horizon given that statistic.

The Fed Speaks

Fed Chairman Jerome Powell is scheduled to speak Wednesday and Thursday this week.  The Fed’s Open Market Committee is scheduled to meet July 31st and there is currently only a 5% probability that the Fed will cut rates at that time (the markets assign a 60% chance of a cut at the Sept. 18th meeting).

The minutes from the last Fed meeting are also scheduled to be released on Wednesday.  Should his comments or the minutes alter the outlook for a rate cut it could cause some volatility in the financial markets.

The rest of the week

Aside from Fed speak we’ll be watching the Consumer Price Index scheduled for release on Thursday and the Producer Price Index on Friday.  Hotter than expected inflation could put upward pressure on rates.

The long-term trend remains in our favor so will remain in a floating stance.

Current Outlook: floating

US 10-year treasury note dips below 2.00%, mortgage rates improve

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

The fourth of July is right around the corner which means it’s time to start looking for the best place to buy fireworks.  Some people look for the lowest prices but as my friend Rob Chrisman advises the best fireworks can be found where the salesperson has three fingers and an eye patch.

Interest Rates

Interest rates around the globe continue to trend lower.  The yield on the US 10-year treasury note, which mortgage rates tend to track, has pierced below 2.00% for the first time since 2016.

What’s this mean for mortgage rates?

Home loan rates are currently at the lowest levels since 2017 based on the US 10-year treasury note hovering around 2.00%.  If the US 10-year treasury dips down to the lows of 2016 (~1.4%) then we could see mortgage rates improve by another .50%.

There is no guarantee that this will take place but momentum appears to be on our side.

Home Prices

The S&P CoreLogic Case-Shiller home price index for April was released earlier today and showed that home price appreciation nationwide was +2.5% year-over-year.  Here in Portland home prices grew by +2.6% which was unchanged from the month before.

I suspect home price appreciation may pick up a little in May and June given that interest rates have improved significantly since April.

The Week Ahead

Later today Fed Chairman Jerome Powell is scheduled to speak.

At the beginning of the year the financial markets were predicting the Fed would hike short-term interest rates twice during 2019.  Now expectations are that the Fed may cut rates twice.  Chairman Powell’s comments will be closely watched in the coming weeks.

On Thursday we’ll get the latest reading on pending home sales and ono Friday we’ll get the Fed’s favorite gauge of inflation (PCE).

Given that momentum is still on our side I will maintain a floating position.

Current Outlook: floating bias

Mortgage rates continue to move lower

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

“Give a man a fish and he eats for a day.  Teach a man to fish and he will neglect his job and family thereafter.”- anonymous

Today is National Go Fishing Day!  As anglers take to the waterways mortgage rates are sinking!

Mortgage Rates

Mortgage rates continue to trend lower prompting many homeowners to evaluate their refinance options.  The Mortgage Bankers Association reported that refinance applications jumped 47% last week compared to the prior week.

European Interest Rates

Yields in the US are following European interest rates lower.  Concerned with declining economic growth European Central Bank President Mario Draghi stated earlier today that he is prepared to cut short-term interest rates and accelerate bond-buying programs with the hopes of driving interest rates down.

The yield on a German 10-year bund is currently negative .30%.  Comparatively the yield on a US 10-year treasury note is trading at ~+2.06%.

The Fed

The US central bank begins their regularly scheduled two-day monetary policy meeting today.  Tomorrow they will announce any changes to US short-term interest rates.  I don’t expect they will cut rates tomorrow but their comments could help mortgage rates improve further.

The Week Ahead

The weekly economic calendar is relatively light.  The highlights include the aforementioned Fed announcement (Wednesday) and Existing Home Sales (Friday).

Momentum is on our side which is why I shifted to a floating bias last week.  I will maintain that position.

Current Outlook: floating bias

Mortgage Rates hit 18 month lows! Is a Fed rate cut next?

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

Today is National Cheese Day which is causing me to face my cheddar cheese addiction.  Luckily it’s only mild….

Cheese connoisseur’s in China will have to pay a little extra for US cheese thanks to recently imposed tariffs.  Will Mexico be next?  Trade tensions are the primary reason why mortgage rates are at the best levels since January of 2018.

Mortgage Rates

Home loan rates have improved substantially over the past couple weeks thanks to weakness in the stock market.  Investors have been selling stocks in favor of “safer” assets as trade tensions rise between the US and China and now Mexico.

President Trump has stated that if Mexico does not take measures to reduce the flow of migrants crossing the US border then he will impose trade tariffs which will gradually increase starting on June 10th.

The Fed

Investors are not the only people tracking trade tensions.  Fed Chairman Jerome Powell announced earlier today that Fed policymakers are monitoring trade tensions closely and might be willing to cut short-term interest rates later this year if the economy demonstrates weakness.

Home Prices

CoreLogic’s Home Price Index report showed that homes across the country increased by 3.6% over the past year.  They forecast that home prices will increase by 4.7% over the next 12 months.

The Week Ahead

This week’s economic calendar is headlined by Friday’s all-important jobs report.  Analysts are expecting +185,000 new jobs created in May.  A number north of that figure could pressure mortgage rates higher and vice versa.

Current Outlook: locking bias

Existing Home Sales a mixed bag, mortgage rates slightly worse to start the week

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

Owning your home is still one of the best ways to achieve wealth and as Plato once said “Wealth is known to be a great comforter.”  Happy Birthday to Plato who would have turned 1,592 years old today and he lived forever.

Mortgage Rates

We shifted to a locking bias last week and that proved to be the correct call.  Although mortgage note rates are mostly unchanged the pricing has worsened meaning the accompanying closing costs are modestly worse.

Home Sales

Earlier today the National Association of Realtors released the monthly existing home sales report.  It showed that the number of homes sold during April actually contracted by nationwide.  However, on the west coast the number of existing home sales actually accelerated by 1.8% from March.

Coincidentally, the average number of days on market contracted from 36 days down to 24.  There is no question that the housing market is less frantic than it was a couple years ago but demand remains strong.

The Week Ahead

This week’s economic calendar is relatively light.  On Wednesday we’ll get the minutes from the most recent Federal Reserve monetary policy meeting but no fireworks are expected.  On Thursday we’ll see numbers for new home sales.

Stock Market

In the absence of significant economic data I expect mortgage rates to take direction from the stock market.  If stocks rally then I expect home loan rates to worsen and vice versa.

Investors remain concerned over US-China trade talks and the ongoing Brexit saga.  Any signals that either of these story lines will resolve themselves sooner rather than later would be bad for mortgage rates.

Current Outlook: neutral

 

Mortgage rates trend lower, how long will this last?

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

If you feel the urge today is National Dance Like a Chicken Day.  Not sure where they come up with these but if the Blazers can win tonight in game one of the Western Conference Finals I will be dancing like a mother clucker!

Mortgage Rates

Mortgage rates continue to benefit from the trade dispute that is ongoing between the US and China.

Last week US stock indexes lost 2%-3% as investors braced for the economic fallout.  When stocks do poorly it tends to help mortgage rates improve.

Stocks are rebounding today which is placing upward pressure on home loan rates.

Loan Performance

CoreLogic released its monthly Loan Performance Insights report for February.  It showed that the number of mortgages in delinquency fell in every category relative to last year and are at 20-year lows.

This may influence lenders to accept more risk in their loan portfolios which means it may become easier for borrowers to borrow money and buy houses.

Technical Guidance

Financial markets tend to work in cycles and home loan rates are no different.

From late March to mid-April interest rates worsened.  Since then home loan rates have been on a winning streak for roughly the same duration.  I am concerned we may see rates reverse and cycle higher.

The Week Ahead

Looking ahead this week we’ll get retail sales on Wednesday, housing starts/ permits on Thursday, and consumer sentiment on Friday.  There are also a series of Fed speakers on the docket.

Current Outlook: locking bias

Mortgage rates improve on heightened trade tensions

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

A HUGE THANK YOU to all the teachers and educators who work hard to support our children in their growth and development.  Today is National Teacher Appreciation Day.

I’d like to thank Professor Randy Grant of Linfield College who helped me find a passion for economics and finance.  Thank you Randy!  You are an excellent person and educator.

Mortgage Rates

Mortgage rates have improved modestly in the last couple days thanks to uncertainty around a new trade deal with China.

Over the weekend US trade officials threatened China with additional trade tariffs if an agreement was not reached soon.  In reaction to heightened trade tensions US stocks have declined yesterday and today which has helped home loan rates improve.

Home Price Appreciation

Earlier today CoreLogic released its Home Price Index report for March.  It showed that national home prices increased by 3.7% from last year.  It also forecasted that home price appreciation would accelerate to +4.8% in the next year.

Demand for housing

Zillow released THIS POST yesterday which highlights the demographics of the US and how it is supportive of demand for housing.  According to the article an additional 3.11 million people which reach “prime first-time home-buying age” (34 years old) over the next eight years.  Portland’s age demographics mirror this forecast.

The Week Ahead

The economic calendar is light this week.  There are a handful of Fed officials with scheduled speeches including Chairman Powell who will speak on Thursday.  On Friday the Labor Department will release the latest reading of the Consumer Price Index.

Current Outlook: locking bias