Tag: portland or mortgage rates

Mortgage Rate Update July 21, 2016

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

Mortgage rates are priced modestly worse today as compared to the beginning of the week.

Let’s start off with some housing news this morning.  Earlier today, the National Association of Realtors released its monthly existing home sales report for June.  It showed that the pace of existing home sales increased by 3% nationwide compared to June of 2015.  The median home price for homes in the western region increased by 7.2% from June of 2015.  Overall, the housing market continues to show strength.

Speaking of strength the US stock market is on a nice run trading at or very near all-time highs.  The S&P 500 is up 8.6% since June 27th and the Dow Jones Industrial Average has traded higher for 9 straight sessions.  Normally when stocks do well mortgage rates suffer and vice versa.

PDX mortgage broker SP 500

Nothing lasts forever so should stocks reverse and move lower it could help mortgage rates hit all-time lows again.

From a technical perspective we have to be careful.  Mortgage-backed securities are trading below important support and if they fail to recover ground later today it would be a negative sign for mortgage rates headed into the weekend.  We can very carefully float to see if stocks reverse course but need to be ready to lock if that doesn’t happen.

Current Outlook: carefully floating

Mortgage Rate Update July 14, 2016

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

On Monday I switched my outlook to a ‘locking bias’ and that adjustment appears to be timely.  Mortgage rates are priced modestly worse today compared to where we started the week albeit still very near all-time lows.

Like last week the US stock market continues to cruise.  The S&P 500 is trading at all-time highs as global investors pile into the US markets because many believe there is no where else around the world that looks attractive.

Unlike last week demand for US treasuries, which more directly impact mortgage rates, has waned.  Demand for “safe haven” investments has softened and as a result the yield on the US 10-year treasury has risen and mortgage rates have worsened slightly.

Overnight the Bank of England left short-term interest rates unchanged but signaled that they would likely employ additional monetary stimulus at their August meeting.  Assuming they do one would expect the US Dollar to further strengthen against the British pound which is great for traveling but not great for US exporting companies (like Nike and Intel).

Should the Bank of England act in August it could cause the British Pound to weaken further.
Should the Bank of England act in August it could cause the British Pound to weaken further.

Here in the US we saw the Producer Price Index increase at a faster pace than was anticipated last month.  It remains to be seen if this is a trend or a margin event but if it is the beginning of a trend then we would expect interest rates to be pressured higher.  We’ll need to keep a close eye moving forward.

The technical trading patterns suggest there is more to lose than to gain at this point.  I recommend locking in.

Current Outlook: locking

Mortgage Rate Update June 30, 2016

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

Mortgage rates remain at historically low levels following Britain’s historic “Brexit” vote which took place one week ago.

The financial markets are still trying to digest the news and forecast how the next few years will play out.  With the British pound suffering against the US Dollar investors are growing increasingly concerned about the health of the British banking system.  US mortgage rates benefit whenever there is widespread fear in the global marketplace.

The British Pound has depreciated against other currencies creating concern over the British banking system.
The British Pound has depreciated against other currencies creating concern over the British banking system.

The question many people want to know if will rates remain at these levels?  Will they reverse higher?  Will they continue to trend lower?  As always this is a very difficult question to answer but momentum is definitely on our side.

Furthermore, professional investors think rates in the US will continue to improve.  Hedge funds and money managers currently hold the highest level of derivative securities which pay-out when rates improve since 2013.  JP Morgan Chase released results of a survey of investors Tuesday which showed the highest number of respondents who think rates will improve since 2010.  Not that a majority of professional investors can’t be wrong (have you seen “The Big Short”?) but this is fairly compelling evidence that rates should at least remain at these levels for the time being.

In case you missed it Portland led the nation for the seventh straight month in terms of annual home price appreciation.  According to the Case-Shiller Home Price Index home prices rose by 12.3% from April 2015-April 2016.

I am going to maintain a floating bias.

Current Outlook: floating

Mortgage Rate Update June 23, 2016

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

After hitting 3-year low levels a week and a half ago mortgage rates have risen by ~.125%.  Essentially mortgage rates have correlated perfectly with sentiment surrounding the British vote on whether to remain or separate from the European Union.

The polls are currently open as British citizens cast their votes.  Odds makers are currently saying there is a 70% chance Britain will remain in the EU and 30% chance a “Brexit” takes place.  Election laws in Britain prohibit publicizing early results so we will not know until all the polls have closed later today.

Britain's referendum on whether or not to remain in the EU is taking place today and will likely shape the direction of mortgage rates.
Britain’s referendum on whether or not to remain in the EU is taking place today and will likely shape the direction of mortgage rates.

Given the uncertainty surrounding a potential “Brexit” US mortgage rates have benefited recently when sentiment has shifted towards that outcome.  Therefore, intuition would tell us that if Britain stays in the EU mortgage rates may rise.  However, over the past week US mortgage rates have worsened by ~.125% so it is my belief that the status quo is priced in.

The British vote is overshadowing all other economic news at this point.  Although I think the outcome of the referendum will be that Britain remains in the EU I think we can float our interest rates.

Current Outlook: floating

Mortgage Rate Update June 20, 2016

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

Mortgage rates are essentially unchanged at multi-year low levels.

In-out-in-out-in-out…..A week ago I wrote (HERE) about how a poll released over the weekend had indicated a majority of British citizens favoring a “Brexit” from the European Union (EU) and how that helped mortgages rates in the US because of general uncertainty and a “flight-to-safety”.

Brexit. In or Out

This week a new poll shows that a majority of voters now favor remaining in the EU.  As a result, pricing on mortgage rates worsened very modestly this morning.  The bottom line is that Thursday’s vote is up in the air.  Here in the US we will learn the results after the markets closes on Thursday so to play it safe borrowers may want to lock ahead of that.  If Britain does depart the EU I expect mortgage rates to remain low and maybe even improve further.

The vote in Britain will overshadow other economic news stories this week.  The economic calendar is light in terms of the number of events but heavy in housing related reports.  On Wednesday we’ll see existing home sales, the FHFA housing price index report, and on Thursday we’ll get new home sales.  Recent housing reports have been “Goldilocks” meaning not too hot and not too cold.

Its very difficult to handicap the vote in Britain so I will favor a locking bias.

Current Outlook: locking

Mortgage Rate Update June 13, 2016

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

Mortgage rates remain at multi-year lows.

 

Britain’s referendum to exit the Eurozone or remain is scheduled for June 23rd.  This vote has been scheduled for many months but has flown under the radar here in the US because most of the polling has suggested a likelihood for the status quo.

However, this past Friday a fresh poll was released that showed a majority of Brit’s opting to “Brexit” the Eurozone (EU).  How might this impact US mortgage rates?

Britain's vote on June 23rd is likely to influence mortgage rates here in the US.
Britain’s vote on June 23rd is likely to influence mortgage rates here in the US.

Should Britain depart the EU it makes the possibility of other members exiting more likely.  For example, apparently Netherlands has already formed a coalition of citizens who would like to push for a “Nexit”.  The bottom line is that a “Brexit” will cause uncertainty and likely pressure mortgage rates lower in the near terms due to a “flight-to-safety” on the part of investors.

The economic calendar is fairly full this week.  The Fed is scheduled to meet tomorrow and Wednesday.  Following May’s weak employment report there is virtually no chance the Fed will raise short-term interest rates.  However, their comments can always move the markets.

We’ll also get more current readings on retail sales, inflation, manufacturing, and housing construction.

I recommend floating for now.

Current Outlook: floating

Mortgage Rate Update May 9, 2016

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

Mortgage rates are modestly better to start the week.

In case you missed it Friday’s all-important jobs report was a miss.  The markets had been expecting 205,000 new jobs for the month of April and instead the report showed only 160,000.  This follows last month’s report which showed that only 156,000 new jobs were created during March.

Despite the smaller than expected gains the US unemployment rate remained low at 5.0%.  With unemployment at such a low level it’s hard to imagine that an economic slowdown is on the horizon.  However, take a peek at the chart below:

Unemployment Rate Before Resssion5-9-2016-Portland-or-mortgage-rates

This demonstrates that going back to 1950 every recession starts with the unemployment rate reaching a multi-year low just before the economy begins to contract (recessions marked by pink highlights).  We don’t know if/ when a recession will come about nor how severe it will be.  It is interesting to note that US mortgage rates tend to dip during recessionary periods.

The economic calendar is relatively light this week.  I will shift to a floating position.

Current Outlook: floating

Mortgage Rate Update May 5, 2016

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

Mortgage rates are essentially unchanged from the beginning of the week.

The economic highlight of the week arrives tomorrow when the Bureau of Labor Statistics releases the monthly employment report (click HERE to learn how the report impacts mortgage rates) for April.  Current expectations are that 205,000 new jobs will be announced.

On Wednesday, private payroll company ADP released its version of the report which showed that only 156,000 new jobs were created last month.  This would suggest that tomorrow’s report may come in lower than expectations which would bode well for mortgage rates.

Portland mortgage rates ADP Employment Report5-4-2016

 

However, if you’ll remember back two weeks ago (see HERE) the weekly jobless claims numbers have been coming in at multi-decade lows.  This would leave us to believe that tomorrow’s report may be better than expectations.

As is the case every month this report is very hard to predict.  Given the current technical trading signals and the fact that mortgage rates are better this week than they were last week I am going to recommend locking in today.

Current Outlook: locking

Mortgage Rate Update March 17, 2016

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

Good news!  Mortgage rates have improved this week.  I switched my outlook to ‘floating’ on Monday and for those who followed that guidance they are being rewarded with rates that are .125% better.

The catalyst for the shift in direction for interest rates was yesterday’s Federal Reserve monetary policy statement.  The markets were anticipating the Fed to sound upbeat on the labor market and more cautious regarding inflation.  However, in their statement the Fed did not acknowledge either of those factors and instead focused on the economic risks posed by international weakness.

The markets are now pricing the highest probability for the Fed to hike short-term rates only one more time in 2016.  If you’ll remember back the Fed had implied they may hike four times this year.  The Fed does not directly control mortgage rates but their view on the US economy carries a lot of weight and bad news for the economy tends to be good news for mortgage rates.

Hoping a little St. Paddy's Day luck will bring lower rates next week.
Hoping a little St. Paddy’s Day luck will bring lower rates next week.

The economic calendar has basically run its course so today and tomorrow I expect mortgage rates to react to technical trading patterns.  I rarely recommend getting greedy but given today is St. Patrick’s day I’m going to maintain a floating bias.  If rates can push below current technical support levels we could see them improve by another .125%.

Current Outlook: cautiously floating

Mortgage Rate Update March 14, 2016

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

Mortgage rates continued to creep higher last week.  Since late February interest rates have been moving higher but still remain below where we started the year.

3-14-10yr-portland-or-mortgage-source

Although there is no significant economic news out today the remainder of the week features a busy schedule.  On Tuesday we’ll receive the monthly report on retail sales and the Producer Price Index.  On Wednesday we’ll see the Consumer Price Index, industrial production, and the Fed’s monetary policy statement.

The Fed is not expected to raise short-term interest rates at this meeting (reminder: the Fed does not directly set mortgage rates).  However, we won’t be surprised if they sound a little more upbeat regarding the US economy.  Furthermore, recent inflationary measures have revealed that price pressure may be building and that could encourage them to lay the groundwork for another rate hike in June.  Inflation is the enemy of mortgage rates.

From a technical perspective momentum over the past couple weeks has carried mortgage rates higher.  Is this move higher running out of steam?  Trading signals suggest this may be the case.  I will recommend a floating position for now but we need to be cautious as the Fed’s comments can overshadow technical trading patterns.

Current Outlook: cautiously floating