ABBA First Mortgage News

Rates worsened slightly this past week

July 23rd, 2016

Mortgage rates ticked upward for the first time on Thursday since we experienced the immediate worsening over the next two days after the improvements of Brexit.  As the uncertainty of the post-Brexit era fades, mortgage interest rates are still far below levels at this time last year, according to new data from Freddie Mac.

“Post-Brexit volatility tapered off over the last two weeks, allowing interest rates to bounce back a bit from their record (10-year Treasury yield) and near-record (30-year mortgage rate) lows,” said Sean Becketti, chief economist at Freddie Mac. “This week, the 30-year fixed mortgage rate increased…to a still-quite-low 3.45 percent. With the Federal Reserve on hold and the UK monetary authority taking at least a one-month breather, we are not expecting any significant movement in mortgage rates in the near-term.  The increase in rates after Brexit took many by surprise and although the future looks bright for the direction of interest rates, many analysts suggest to exercise caution if waiting to get started with your financing.

This is just an FYI urging clients to set the table now by calling Rich at ABBA First Mortgage and take advantage of the great service that you deserve when work a company that has over 60 years of combined experience in the undustry.

If the Republicans when this election-

July 21st, 2016

The Republican Party platform – passed Monday night at the Republican National Convention – is calling for sweeping and drastic changes to the regulatory environment and the government’s role in housing finance.

“Our goal is to advance responsible home ownership while guarding against the abuses that led to the housing collapse,” the platform states. “We must scale back the federal role in the housing market, promote responsibility on the part of borrowers and lenders, and avoid future taxpayer bailouts.”

The platform calls for reforms that “provide clear and prudent underwriting standards and guidelines on predatory lending and acceptable lending practices.”

The platform also demands a “comprehensive review” of federal regulations “that make it harder and more costly for Americans to rent, buy or sell homes.”

The platform also accused Fannie Mae and Freddie Mac of having a “corrupt business model” that allows shareholders to “reap huge profits” while taxpayers cover any losses.

“The utility of both agencies should be reconsidered as a Republican administration clears away the jumble of subsidies and controls that complicate and distort home-buying,” the platform states.

Republicans also called for changes to the Federal Housing Administration, saying the agency “should no longer support high-income individuals, and the public should not be financially exposed by risks taken by FHA officials.”

The platform also said it would do away with “government mandates that required Fannie Mae, Freddie Mac, and federally-insured banks to satisfy lending quotas to specific groups.”

The party saved most of its wrath for Dodd-Frank in general and the Consumer Financial Protection Bureau in particular.

The CFPB, the platform states, is “deliberately designed to be a rogue agency. It answers to neither Congress nor the executive, has its own guaranteed funding outside the appropriations process, and uses its slush fund to steer settlements to politically favored groups.” The platform also claimed that CFPB Director Richard Cordray “has dictatorial powers unique in the American republic.”

“If the Bureau is not abolished, it should be subjected to congressional appropriation,” the platform states. “In that way, consumer protection in the financial markets can be advanced through measures that are both effective and constitutional.

(As seen in the Mortgage Professional America Magazine on June 21st, 2016)

The mortgage interest rates are volatile

July 20th, 2016

Rates Currently Trending: Neutral  

Mortgage rates are unchanged this morning. The MBS market improved by +12 bps yesterday. This was probably not enough to improve mortgage rates or fees. The market experienced low volatility yesterday.

 

Today’s Mortgage Rate Forecast: Neutral to slightly worsening

Housing: Weekly Mortgage Applications dropped -1.3%, led by Purchases which dropped -2.0% on tight inventory. Refinances pulled back -1.0%. Still very strong numbers and obviously a small snapshot in time. Oil: We’ll be watching WTI Crude (as usual) which is currently at $44.56 after this morning’s Crude Inventory report hits. The lower the inventory level, the better it is for the crude oil pricing (i.e. moving upward) which is an obvious negative for mortgage interest rates.

Mini movements to mortgage market with stocks on the rise

July 19th, 2016

Which leads to talking about the record low interest rates- it will be interesting to see if the good rate news will continue if the stock market continues the rally. Certainly, these low rates can boost stocks, but if stocks keep rising, this could put upward pressure on rates — a process which has already started. If the economy keeps humming along in spite of the situation overseas, we could also see the Federal Reserve considering another rate increase. All in all, it could be a very interesting summer as borrowers continue to take advantage of the recently advertised low mortgage interest rates.

Market worsening since Brexit improvements!

July 15th, 2016

Rates Currently Trending:  Higher

Mortgage rates are trending higher this morning.  The MBS market worsened by -22 bps yesterday. This was enough to worsen mortgage rates or fees.  The market experienced moderate to high volatility yesterday.

 

Today’s Mortgage Rate Forecast:  Higher

Retail Sales: The June Headline number beat estimates but it’s tainted. It came in at 0.6% vs est of 0.2%, BUT May was revised lower from 0.5% to 0.2%….thus the larger gain in June. But when you strip out autos, we actually do get some solid traction as it jumped 0.7% vs est of 0.4%.

 

As we monitor the rates for client, we see the ups and downs of the market.  This volatiltiy contributes to the uncertainties of when to lock and and when float.  Because analysts suggest that we may still see lower rates in the future, the question is whether to take advantage of where we are today or gamble for a lower rate that may or may not ever materialize.  Please call ABBA First to lock in the rates that you want or if your desire is a lower rate, we will monitor the market for you.

So rates might actually improve

July 13th, 2016

The latest outlook from Freddie Mac sees a rise in the share of refinance mortgage loans to 49 per cent for 2016, up from its June forecast of 41 per cent; this will be driven by low interest rates.

The outlook for mortgage rates has also been revised downwards by 50 basis points in light of recent events including Brexit. Freddie forecasts an average rate for a 30-year FRM to be 3.6 per cent for 2016 and 4.0 per cent for 2017.

“The turbulence abroad should continue to create demand for U.S. Treasuries and keep mortgage rates near historic lows; thereby, allowing home sales to have their best year in a decade, along with a boost in refinance activity,” commented Freddie Mac chief economist Sean Becketti.

The house price appreciation outlook remains at 5 per cent in 2016 and slowing to 4 per cent for 2017.

Americans are liking the effects of Brexit

July 8th, 2016

Following Britain’s vote to leave the European Union, mortgage rates in the U.S. have approached record lows and fewer people are being fired from their jobs than at any time in the last four decades. In other words, so far, so good for the American economy.

Brexit prompted investors to pour their money into the safety of U.S. Treasuries, pushing the average rate on a 30-year fixed home loan down to 3.41 percent this week, a three-year low and closer to the 3.31 percent reached in November 2012 that was the lowest in the modern era. The number of people filing claims for unemployment benefits last week declined to 254,000, the least since mid-April, which in turn were the fewest since 1973, according to figures Thursday from the Labor Department.

The immediate impact on rates and the so-far lack of bearing on the U.S. job market is helping underpin consumer confidence. While the Bloomberg Consumer Comfort Index was little changed last week, measures of personal finances and the buying climate improved, making up for a slump in views on the general economy — no doubt caused by the turmoil in global equity markets thanks to the shocking news from the U.K.

“From a financial standing point of view, the consumer is actually slightly better off today in the U.S. than they were at Brexit,” said Jacob Oubina, senior U.S. economist at RBC Capital Markets LLC in New York. “You’re getting this added benefit of artificially low interest rates because of what’s going on around the world. And I don’t think that’s going to end anytime soon.”

Love the improving market!

July 6th, 2016

Mortgage rates are unchanged this morning.  The MBS market improved by +34 bps yesterday. This was enough to improve mortgage rates or fees.   However, the market experienced high volatility yesterday and that continues today.   There were strong ISM Non-Manufacturing numbers this morning and that’s likely to play a role in increasing mortgage rate volatility.  Although we are enjoying the low rates, this goes to show that this low rate environment may not last much longer.  Be ready to lock in your rate by setting the table with ABBA First Mortgage for all your home financing needs. 

How low can interest rates go?

July 2nd, 2016

The United Kingdom’s vote was certainly felt by the markets. Stock markets around the world plummeted, oil prices moved lower and interest rates fell to record low territory. These low rates are spurring another round of refinancing across the land and these rates are expected to spur home sales as well. Meanwhile, as we mentioned previously, there is much that will have to play out before we see what the real long-term effects will be with regard to the move of the UK out of the European Union. Our stock market seems to have realized this fact as it has already recovered the ground lost.

One of the biggest, and most immediate effects on everyday Americans is how Brexit will change interest rates on home loans. Greg McBride, Chief Financial Analyst at Bankrate, said rates could sink to record lows in the coming weeks. “If you’re a borrower, don’t wait to lock your rate,” he said, “as this opportunity may not last long.” They’ve already hit rock bottom this year. In the past month alone, 30-year fixed-rates on home loans have hovered around 3.7 percent, nearly a three-year low. Britain’s vote to leave the European Union is expected to drive rates even lower. Rates have been about 17 percent lower than the median of this decade. However, McBride said his long-term outlook does not change with the Brexit vote. He still estimates a rebound from ultra-low rates by year’s end. Mortgage Bankers Association Chief Economist Michael Fratantoni forecast a rate of 4.8 percent by December 2017. That would be the highest rate since 2009, and a 30 percent boost from current levels. By the end of 2016, Fratantoni expects rates to reach 4 percent. He noted that he’s turned his estimates more conservative in recent months, but predicts an increase nevertheless. That could change with the Brexit referendum passing, however. He noted that Treasury rates had already dropped about 20 basis points the morning after the vote. “At this point, it is unclear whether this will just be a short term disruption, or whether it will have a longer-term impact,” Fratantoni said. “Our best guess at this point is that the impact on the residential real estate sector will be to keep rates on home loans lower for longer, likely leading to another pickup in refinance activity.” Source: The Washington Post

Lowest rates in 3 years

June 30th, 2016

Rates for 30-year U.S. mortgages dropped to the lowest level in more than three years as U.K. voters’ decision to leave the European Union drove investors to the safety of American government bonds that guide home loans.

The average rate for a 30-year fixed mortgage was 3.48 percent, down from from 3.56 percent last week and the lowest since early May 2013, Freddie Mac said in a statement Thursday. The average 15-year rate slipped to 2.78 percent from 2.83 percent, the McLean, Virginia-based mortgage-finance company said.

The good news for both buyers and homeowners looking to refinance is that the Federal Reserve isn’t likely to raise interest rates any time soon. Brexit has only heightened concerns about the global economy that have been pushing down borrowing costs since the start of the year.