Tag: portland rate update

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 January 17, 2017

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

Mortgage rates remain at the best levels following the election and about .25% improved from recent highs.

Inflation expectations is the primary driver of mortgage rates.  This is because inflation erodes the purchasing power of future interest payments.  Therefore, when lenders think inflation will rise in the future they charge higher rates of interest to compensate and vice versa.

Inflation is the primary driver of mortgage rates.

Following Donald Trump’s election investors expected higher inflation because of his campaign promises to increase government spending (infrastructure) while cutting taxes.  However, the financial markets are now tapering inflation expectations.

Inflation adjusted treasury yields (nominal yield minus current inflation) have declined to the lowest levels since the election and mortgage rates have also improved off recent highs.

Speaking of inflation the release of the latest Consumer Price Index is scheduled for tomorrow.  It has been trending higher as of late and if this trend continues then of course we’d expect upward pressure on mortgage rates.  Aside from the CPI the remainder of the week looks to be fairly quiet.

From a technical perspective the gradual improvement of interest rates over the past month may be running out of steam but for now we’ll try to remain on track.  I will continue to float but with a more cautious outlook.

Current Outlook: floating

Mortgage Rate Update December 1, 2016

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

Mortgage rates have worsened modestly this week.

On Monday I had recommended a ‘floating’ position with the hopes that the yield on the US 10-year treasury would respond to technical trading patterns and reverse below 2.38%.  Pricing on mortgage rates did improve Monday-Tuesday but starting yesterday rates have worsened.

The yield on the US 10-year treasury is now up to 2.46% and mortgage rates have worsened by .125% in response.

Wrfel mit Aufschrift JOBS auf einer Tageszeitung

Tomorrow we get the last all-important jobs report for 2016 (and the last one prior to the next Fed meeting).  The markets are currently expecting +180,000 new jobs added during the month of November.  Not coincidentally the average monthly job growth from January-October 2016 has been +181,000.

Aside from watching the number of new jobs added analysts will be keeping a close eye on average hourly earnings.  In last month’s report average wages increased by 2.8% compared to the year prior which represented the largest increase since 2009.  Should wages continue to press higher it would raise concerns about wage-based inflation.  Inflation is the primary driver of mortgage rates.

From a technical perspective the damage of not locking Monday-Tuesday has been done.  I am going to maintain a floating bias.

Current Outlook: floating