Bonds +150bp 30 Year Fixed 5.875%
September 8, 2008
RATES ARE COMING DOWN!!
The Government takeover of Fannie Mae and Freddie Mac is making its mark on the bond market. Mortgage Backed Securities are up +150bp! Fannie Mae mortgage bonds now are guaranteed by the US Government and investors are buying them up. This should help drive down mortgage rates and hopefully get the housing marketing moving again. With Mortgage Bonds being such a hot commodity the US Government now will need some low risk mortgages to secure them against. I do not personally believe the mortgage crisis is over, but low mortgage rates can’t hurt our industry!
Mortgage Rates Predictions
July 22, 2008
July 22, 2008 | Mortgage Rates are at their worst level in 2008…
Inflation, Inflation, Inflation! Today the Philly Fed President Charlie Plosser said that inflation is too high and the Fed would have to “back up their words with action”. The Fed will need to begin hiking the Federal Funds rate as soon as possible to fight inflation. It seams that we are at the rock bottom with mortgage rates assuming the Fed starts to take action and raise their Feds Cut Rate. Mortgage backed securities are -44bp on the day at 99.12.
Mortgage Rates Predictions
June 17, 2008
June 13, 2008 | Mortgage Rates are headed down…
PPI comes in red hot with Food and Fuel prices pushing inflation. The Core PPI hit expectations and held onto the 3% year over year gains. Inflation with no hope of the Fed bailing out investors should help push bond prices higher as investors move to a flight to quality in Mortgage Backed Securities. Mortgage Bonds have hit a floor of support and bounced Monday and Friday off. This usually signals a reversal.
Mortgage Rates Predictions
June 13, 2008
June 13, 2008 | Mortgage Rates are trying to come down…
CPI reported worse than expectations signaling even more inflation. Consumer Sentiment in June was a horrible 56.7! Mortgage Bonds are were all over the place this morning and currently set +31bp @ 100.03. Hopefully we have seen the floor for Mortgage Backed Securities and we begin the “leash effect” Read more
Mortgage Rates Predictions
June 12, 2008
June 12, 2008 | Mortgage Rates continue to climb on Retail Sales numbers…
After yesterdays Mortgage Bond rally to push rates lower, today’s very strong Retail Sales numbers for May quickly reversed the momentum. Retail Sales in May reported a 1% increase and without Auto Sales the increase was 1.2%. Read more
Mortgage Rates Predictions
June 11, 2008
June 11, 2008 | St. Louis Mortgage Rates are coming DOWN!
We have a good bond rally helping drive mortgage rates lower this morning. Currently, FNMA 5.5% Mortgage Bonds are selling up +84bp for 98.25. As we mentioned earlier in the week Mortgage Bonds seamed oversold. Today the Fed Beige Book Survey Read more
Mortgage Rates Predictions
June 10, 2008
June 10, 2008 | Mortgage Rates are increasing!
The Balance of Trade was slightly higher than analyst expected today. Mortgage Bonds are still getting slaughtered -68bp! The Fed Chairman Ben Bernanke’s speech last night has pushed mortgage bonds to their lowest level since March. Mr. Bernanke is concerned about inflation, but he believes the market will work itself out. The Fed’s lack of action will cause a weaker dollar, higher oil prices, and more inflation. Read more
Mortgage Rates Predictions
June 9, 2008
June 9, 2008 | Mortgage Rates continue to head higher.
This morning Pending Homes Sales actually reported a 6.3% improvement for April. Now that the good news for mortgages is out of the way, inflation seams to be on everyone’s mind. Mortgage Bonds are currently -75bp. $4.00 a gallon was the US average price for gas being broken on Sunday. Today we have a string of FOMC member speaking. The New York Fed President Timothy Geithner has speaks at 12:15pm, Dallas Fed President Richard Fisher is interviewed at 1:00pm, and at 8:15pm ET Fed Chairman Ben Bernanke will be giving his incite on inflation. The end of this week is packed with elevated market movers. As far as mortgage rates predictions for the week, I believe mortgage bonds are oversold and we should get back these losses Thursday’s retail sales report. I predict that rates will improve after today’s unsolicited blood bath.
Mortgage Rates Predictions
June 6, 2008
June 6, 2008 | Rates are still trending higher, even with a 5.5% Unemployment Rate…
This mornings Employment Report had a little suprise hidden inside it. The unemployment rate made an unbelievable +.5% increase in just a month! Non-Farm Payrolls and Hourly Earnings ended up better than economist estimated. The shocking unemployment rate usually would give Mortgage Backed Bonds the boost it needs to approach the 200 day moving average. Already this morning Mortgage Bonds have seen a low of 98.5625 and a high of 99.25. That is almost a 69bp swing! With this volatility floating an interest rate is ludicrous. Even though FNMA Bonds are currently +12bp on the day, it looks like going into the weekend and the fact that any real ELEVATED market moving economic indicators will not be reported until Retail Sales next Thursday, I believe rates are still heading higher. We will keep an eye on the stock market for signs of weakness and keep you updated if Mortgage Bonds gain steam.
Mortgage Rates Predictions June 05
June 5, 2008
June 5, 2008 | Rates are heading up as the battle for the 200 day moving average continues.
Mortgage Bonds were absolutely slaughtered yesterday. The Fannie Mae Bonds opened yesterday at 99.875 and this morning we saw a low of 98.625 already. As a reminder, Fannie Mae Mortgage Backed Securities correlate directly with Long Term Fixed Mortgage Rates. Every -.40-.50 basis points Mortgage Bonds move is +.125% higher interest rate for consumers. That means if yesterday morning 30 Year Fixed was 6.125% and Mortgage Bonds lost -125bp, [99.875-98.625] then this morning that same consumer would have +.25% to +.375% higher rate [6.375-6.500%]. With yesterdays notoriously misleading ADP report showing growth in employment, investors are looking for a stronger than expected employment report tomorrow. Bonds are down -38bp at 98.81 on the day currently with no other important economic indicators scheduled for release. Consumers should lock in their Long Term Fixed rates in this volatile market and definitely consider 5-7 Year Arms as an alterative to 30 Year Fixed since they have been improving.
