RATES HIGHER BEFORE IMPORTANT FED MEETING / EMPLOYMENT REPORT

RATES HIGHER BEFORE IMPORTANT FED MEETING / EMPLOYMENT REPORT

July 30^th, 2013

Interest rates have moved up slightly over the past week and a half. Last week the Mortgage Backed Security market closed trading down – 39 bps and so far this week the MBS market has traded down -18 bps.

This is a somewhat normal pull back after interest rates had improved over the past 2 weeks. Investor took the gains and sold. We are seeing a level of resistance that most investors will not go above, which makes it difficult for interest rates to improve below a certain level.

There are 2 major events this week that will likely cause a lot of volatility in the interest rate markets.

The Federal Open Market Committee’s (FOMC) meeting is Wednesday and investors will be listening intently for any new information on the FED’s time period for tapering it’s bond purchasing program.

On Friday, the July employment report will be released.

I maintain that it is safer to lock than float interest rate pricing. Unless we see the FED definitively extend its bond purchasing program or very poor economic performance reports – rates will not likely go much below their current levels.

Make it a great week!!

BEST VALUE OF THE WEEK:

30 Year Fixed at 4.5% with 0 points

TODAY’S RATES:

30 year fixed: 4.375% – .79 points, 4.5% – 0 points, 4.625% – $0 costs

20 year fixed: 4.125% – .86 points, 4.375% – 0 points, 4.625% – $0 costs

15 year fixed: 3.5% – .41 points, 3.625% – 0 points, 3.875% – $0 costs

5/1 ARM: 2.875% – .85 points, 3.375% – 0 points, 3.875% – $0 costs

7/1 ARM: 3.25% – .99 points, 3.75% – 0 points, 4.375% – $0 costs

10/1 ARM: 3.75% – .82 points, 4% – 0 points

30 year fixed FHA: 3.875% – .69 points, 4% – 0 points, 4.25% – $0 costs

15 year fixed FHA: 3.25% – .44 points, 3.5% – 0 points, 3.75% – $0 costs

30 year fixed VA: 4.25% – $0 costs

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RATES HIGHER BEFORE IMPORTANT FED MEETING / EMPLOYMENT REPORT

INTEREST RATES IMPROVE FOR 2ND STRAIGHT WEEK:

INTEREST RATES IMPROVE FOR 2ND STRAIGHT WEEK:

July 22nd, 2013

Interest rates improved for the second straight week. The Mortgage Backed Security Market closed up + 81 bps, bringing us back to pre-4th of July level pricing.

On Wednesday, Ben Bernanke testified in front of Congress that the Fed’s tapering of it’s bond purchasing program was not “imminent”, but that the FED was monitoring the economy. When the FED feels the economy is where it needs to be, then the FED will begin to end it’s stimulus.

This helped the markets because many investors felt the FED was planning on slowing down it’s bond purchasing in September. I still believe the FED will slow down the stimulus in September, unless some event pulls back the forecast of the economy.

I expect rates to be relatively calm until the July unemployment report. These employment reports are huge moving forward, and will likely be one of the key determining factors in the FED’s decision to slow down it’s bond purchasing program. The July employment numbers are released next Friday morning.

I am recommending to lock on any improvement in rate pricing.

Make it a great week!!

BEST VALUE OF THE WEEK:

20 Year Fixed at 4.25% with 0 points

TODAY’S RATES:

30 year fixed: 4.25% – 1 point, 4.5% – 0 points, 4.625% – $0 costs

20 year fixed: 4.125% – .43 points, 4.25% – 0 points, 4.5% – $0 costs

15 year fixed: 3.5% – .57 points, 3.625% – 0 points, 4% – $0 costs

5/1 ARM: 2.75%: – .85 points, 3.125% – 0 points

7/1 ARM: 3.125% – .79 points, 3.5% – 0 points

10/1 ARM: 3.875% – .89 points, 4.375% – 0 points

30 year fixed FHA: 3.75% – .62 points, 4% – 0 points, 4.125% – $0 costs

15 year fixed FHA: 3.25% – .63 points, 3.5% – 0 points, 3.75% – $0 costs

30 year fixed VA: 4% – .10 points, 4.125% – 0 points, 4.25% – $0 costs

JULY 22ND 2013, INTEREST RATES IMPROVE FOR 2nd STRAIGHT WEEK

INTEREST RATES IMPROVE .25% – 30 YEAR FIXED TO 4.375%

INTEREST RATES IMPROVE .25% – 30 YEAR FIXED TO 4.375%

July 15^th, 2013

Interest rates gained some positive momentum after the worst day for interest rates in over 10 years on Friday, July 5th. The market is rebounding, which can often happen when rates move one way very quickly, signaling a possible overreaction by the market.

The Mortgage Backed Security market closed last week trading up + 118 bps and closed Monday, July 15^th trading up + 35 bps. Although interest rate pricing is still not at prior to 4^th of July levels, interest rates improving 5 of the past 6 days is a step in a positive direction.

Last Wednesday was interesting in that we saw the release of the FED minutes from the June FOMC meeting and Ben Bernanke delivered a speech later in the day. The FED minutes showed that about 50% of the FED wants to taper the QE stimulus in 2013. This further confirmed the market’s belief that the FED’s asset purchasing program would soon be coming to an end. Then later in the day, Ben Bernanke made a vague speech stating that the FED planned to keep monetary policy positive for business and that the US economy was still not where they wanted it.

Basically what we are seeing is Bernanke back tracking a bit because no one though interest rates would move up this quickly.

On Wednesday and Thursday, Bernanke will be testifying before the House and the Senate. Expect further volatility depending on how he answers Congress’s questions. If he gives the impression that QE will last through the end of 2013, I would expect to see rates improve.

Until the FED plainly states it’s direction, volatility in the market will continue to be the norm. When the FED finally does end it’s QE stimulus, expect rates to jump quickly.

Make it a great week!!

BEST VALUE OF THE WEEK:

5/1 ARM at 3.375% with 0 points

TODAY’S RATES:

30 year fixed: 4.375% – 1 point, 4.625% – 0 points, 4.75% – $0 costs

20 year fixed: 4.125% – .81 points, 4.25% – 0 points, 4.625% – $0 costs

15 year fixed: 3.5% – .73 points, 3.75% – 0 points, 4% – $0 costs

5/1 ARM: 2.875% – .98 points, 3.375% – 0 points

7/1 ARM: 3.25% – .96 points, 3.875% – 0 points

10/1 ARM: 4.125% – 1 point, 4.625% – 0 points

30 year fixed FHA: 3.875% – .6 points, 4% – 0 points, 4.25% – $0 costs

15 year fixed FHA: 3.25% – .85 points, 3.5% – 0 points, 3.75% – $0 costs

30 year fixed VA: 4.25% – $0 costs

INTEREST RATES IMPROVE .25% – 30 YEAR FIXED TO 4.375%

INTEREST RATES SURGE HIGHER / BERNANKE TO SPEAK ON WEDNESDAY

INTEREST RATES SURGE HIGHER / BERNANKE TO SPEAK ON WEDNESDAY

July 8^th, 2013

Interest rates moved slightly higher before the 4^th of July. On Friday, interest rates had their largest one day increase in over 10 years. Rates ended the day almost .5% higher than Wednesday’s close.

The June employment report showed higher than expected job creation – further supporting the belief that the economy is recovering. The Mortgage Backed Security market reacted swiftly, closing Friday trading – 200 bps, and closing the week trading down -255 bps.

On Monday, we did see some pull back in the markets with the MBS market closing Monday + 93 bps, helping take back some of the losses on Friday.

Interest continue to move higher with improved signs in the economy, the FED ending it’s stimulus package, and investors having a small appetite for fixed income securities. This trend will likely continue unless we have a major economic drawback or the FED changes it’s plans.

On Wednesday, the FED minutes from June 19^th will be released and Ben Bernanke will be giving a speech. Many suspect that the FED didn’t think rates would move so high so quickly. Ben Bernanke may be doing a little damage control, trying to keep interest rates from continuing to spike. Regardless of what he says, it will be difficult to retract what he has already stated.

I expect some small improvements in rate pricing this week due to investor pull back that usually happens with the market goes one way very quickly. My recommendation is to lock on any improvement in the market. I believe in the long term, interest rates will continue to rise.

Make it a great week!!

BEST VALUE OF THE WEEK:

15 Year Fixed at 3.875% with 0 points

TODAY’S RATES:

30 year fixed: 4.625% – .37 points, 4.75% – 0 points, 5% – $0 costs

20 year fixed: 4.25% – .67 points, 4.625% – 0 points, 4.875% – $0 costs

15 year fixed: 3.625% – .72 points, 3.875% – 0 points, 4.25% – $0 costs

5/1 ARM: 2.875% – 1 point, 3.375% – 0 points

7/1 ARM: 3.375% – .88 points, 4.375% – 0 points

10/1 ARM: 4.125% – 1 point, 4.625% – 0 points

30 year fixed FHA: 4.125% – .76 points, 4.25% – 0 points, 4.5% – $0 costs

15 year fixed FHA: 3.25% – .5 points, 3.375% – 0 points, 3.5% – $0 costs