April 22nd, 2014
- Rates had moments of improvement and worsening all throughout the past week with the rate dipping slightly. So far this week we have seen those slight improvements slip away.
- Freddie Mac announced that for the week ending April 17, 30-year fixed rates decreased to 4.27%* from 4.34%* the week before. That improvement has already disappeared this week.
- The average for 15-year loans fell to 3.33%*.
- Adjustables were mixed with the average for one-year adjustables increasing to 2.44%* and five-year adjustables slipping to 3.03%*.
- A year ago 30-year fixed rates were at 3.41%*.
- Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans continued to ease this week as housing starts rose 2.8 percent in March but not as much as expected. Also, permits fell 2.4 percent in March to a seasonally adjusted annual rate of 990,000, which followed a slight downward revision of 4,000 permits in February.”
*Rates indicated do not include fees and points and are provided for evidence of trends only. For instance, a rate quoted may be subject to a 1% point used to get that quoted rate. They should not be used for comparison purposes,
April 18th, 2014
Today, Christians around the world are remembering the sacrifice of the cross and the hope of salvation. Everything that we have is because of God’s grace and favor. The love of God is not for us alone—He calls us to share that love with a world in desperate and urgent need. At ABBA First Mortgage, we not only believe this, but we also believe that our mission is treat others the way we want to be treated. We originate and close mortgage loans offering low rates and low closing costs, while ensuring our borrowers that we have their wants and desires in mind as we navigate the mortgage market on their behalf. We pray for all of our clients regardless of their beliefs knowing that there is a God that loves each and everyone of us just the way we are. For those that do not believe that there is a god, we hope and pray that by working through ABBA First for your mortgage, you will have recognized that your needs have been fulfilled and that it was done with excellence. Thank you all, once again, for the opportunity to earn your trust and your business.
The markets are closed today in observence of Good Friday. Rates remain stable as most banks are closed. Yesterday the market worsened due to the early morning economic news that caused rates to go up by .125% – .250%. Hopefully on Monday, the dust will settle and we may see the rates come back down.
April 17th, 2014
Initial Jobless claims 304K vs est 316K
Continuing Claims 2.739M vs est 2.795M
Because both above reports show an improving labor market, they are very negative for pricing and this will cause interest rates to go up. The reasoning behind this assumption is that the economy must be improving, and therefore we see the markets (where investors place their monies for potential earnings) react accordingly. Henceforth, we should see the stock markets improve, the bond and MBS markets worsen (causing the bond yields to go up), and the sum total of this equation typically causes the long term, mortgage interest rates to go up! A domino effect for sure!
April 14th, 2014
March retail sales at 8:30 this morning were much better than forecasts; sales expected 1.0% overall were up 1.1% but ex auto sales were thought to be up 0.5% however sales were up 0.7%. The better report bolstered the stock indexes and took a little out of treasuries and MBSs. Sales were the best since Sept 2012. Feb sales, originally reported +0.3% were revised to +0.7%. Better sales suggest increased demand after Jan and Feb kept consumers from shopping. Sales at department and general merchandise stores jumped the most since March 2007. Prior to sales data the 10 was at 2.63%, after the release at 2.64%, 30 yr MBSs on the initial reaction were down 14 bps, at 9:00 the price improved to -6 bps. At 9:00 the DJIA futures was up 58 against fair value of -24. So what does all the above actually mean for the mortgage rate shopper? Typically with an improving economy comes a stronger stock market which takes the wind out of the sails for the bond market. This in turn often prompts the mortgage interest rates to move up slightly which of course is not the news that we were hoping to hear. Keep an eye on the rates before thery go up higher than what you were hoping for. (SEE THE RATE TRACKER TO THE RIGHT. THE ARROW INDICATES THE DIRECTION THAT MORTGAGE RATES ARE PRESENTLY TAKING.)
April 10th, 2014
Mortgage backed securities (MBS) gained +14 basis points (BPS) from Tuesday’s close (net of our monthly roll over) which caused 30 year fixed mortgage rates to move sideways.
Another sideways day for MBS pricing, our monthly bond coupon rollover certainly skews the charts but when you compare apples to apples (May to May) then you will see that MBS moved sideways and in a fairly narrow range for the day. Actually stocks and MBS both moved in the same direction and both improved yesterday…it was the second straight day that they moved in the same direction. But usually when you see the stock market improve by almost 200 points (DJIA +181.04), MBS sell off. But not yesterday.
Why? Because there was something for everyone in yesterday’s FOMC minutes. Stock traders view the minutes as less “hawkish” than the off-the-cuff response that Janet Yellen made during the press conference after the official FOMC statement. But bond traders certainly do not think that they are as “dovish” – as all but one voting member saw the Fed raising rates in 2015.
April 8th, 2014
ABBA First Mortgage has continued to offer rates below the national average. The benefit of obtaining a lower interest rate may save a borrower thousands of dollars over the life of the loan.
Rates were stable in the past week as we approached another jobs report, though they started trending upwards. Freddie Mac announced that for the week ending April 3, 30-year fixed rates increased slightly to 4.41% from 4.40% the week before. The average for 15-year loans rose to 3.47%.
A year ago 30-year fixed rates were at 3.54%. Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans were little changed amid a week of light economic reports. Of the few releases, real GDP was revised up slightly to 2.6 percent growth in the fourth quarter of 2013. The private sector added an estimated 191,000 jobs in March, which followed an upward revision of 39,000 jobs in February according to the ADP Research Institute. Also, the Institute for Supply Management reported the manufacturing industry rebounded from a soft February but was still below market consensus.”
April 1st, 2014
In 2014, many Americans have the flexibility to do more — whether that means buying their first home, investing in a second home, or simply trading up to get into a larger house or one more suitable for their changing needs. ABBA First is here to help you navigate the new lending environment and guide you toward options that enable you to make the most of your financial abilities. With the goal of extending the availability of various programs targeted at first-time homebuyers and those who didn’t qualify previously for loans, ABBA First has familiarized its employees with the available government programs to reach the larger pool of potential borrowers that has been created. Whether you have shopped around already and been denied or if you just want want a better than market rate with low closing costs, we can assist you in making the right choices as you consider a new home purchase. Call us at 910-332-0650 (licensed in NC and TN-NMLS 74184)
March 31st, 2014
Bond and mortgage markets opened weaker this morning ahead of the March employment report on Friday. The 10 yr Treasury Note remains in its well-defined trading range that has held it now since last January with only a few exceptions when the note ventured out; 30 yr MBSs have the same chart pattern, trading in a 100 point range with a few exceptions. The only economic report this morning came at 9:45; the March regional Chicago purchasing managers’ index was released, the forecasts were for the index at 59.0 from 59.8 in Feb. As reported, the index fell to the weakest since August 2013 at 55.9.
The Ukraine/Russia/US situation didn’t change much over the weekend although there were talks between the US and Russia that didn’t resolve much, but at least there is dialogue. Financial markets are not paying much attention in terms of any significant movements that could be attributed to the issues. No bullets equals no major fears.
Europe facing a dilemma; similar to the US the level of inflation in the EU is slowing. Inflation is the slowest pace since November 2009, signaling that companies are struggling to raise prices amid feeble demand. The ECB aims to return inflation to just under 2 percent. Inflation in the 18-nation euro area slowed to 0.5% this month, according to an initial estimate by the European Union’s statistics office. Both the US Fed and the ECB want inflation to increase to speed spending and profits that in turn will increase employment, both banks are trying with no success as the global economies suffer the worst rebound from a recession since before the Big War. The ECB will meet on Thursday.
Janet Yellen is speaking now at a conference in Chicago, nothing new likely will occur. So far not much on the wires. So far she is continuing to remind that the employment condition isn’t as good as it looks as job creations are not the good jobs that the Fed wants to see.
March 28th, 2014
Interest rates increased a little today; the stock market did its usual swoon again today, opening strong with the DJIA up over 100 points before backing off in the afternoon. Going into the weekend with Russia’s troops apparently massing at the Ukraine border kept both stocks and bonds from any major moves. The 10 yr note, as we have mentioned many times has strong resistance at 2.70%; yesterday at 2.68% was a warning that the note was entering into an area that has been difficult to sustain. Markets are still edgy over the geo-political situation but as noted, as long as bullets are not flying traders are not in any panicky mode.