ABBA First Mortgage News

Where are rates heading based upon this past week’s activities?

October 3rd, 2017

Rates were flat in the past week, but rates were rising at the end of the survey period.  This would make rates susceptible to an increase in the next survey week, unless there is a reversal of trends.  For the week ending September 28, Freddie Mac announced that 30-year fixed rates remained at 3.83%.  The average for 15-year loans was at 3.13%, also the same as the previous week.  The average for five-year adjustables moved up to 3.20%.  A year ago, 30-year fixed rates averaged 3.42%.   Attributed to Sean Becketti, chief economist, Freddie Mac — “Rates held relatively flat this week. The 10-year Treasury yield fell just 1 basis point, while 30-year fixed rates remained unchanged at 3.83 percent.”

ABBA First wants to assure our borrowers of obtaining the best combination of rate and terms available for their needs.  Please give us a call to find out how we can meet your needs.

Euro-bank tapering could be what drives up rates

September 29th, 2017

Part 1 of 5

What will be the impact of the Fed’s tapering?

Well, they have telegraphed this for some time. About the only thing that they didn’t say was what the start date would be, although in the last couple of months they have heavily hinted that it would be in October. So, there hasn’t been a lot of mystery about their intent. Our thought is that when all is said and done, the spreads of mortgagerelated assets over the 10-year Treasury will probably widen out by 25 to 40 basis points. That is not enough to upset the housing market but, of course, that is over and above what is happening in the Treasury market. The reduction of their portfolio will be interpreted by the [Treasury] market as some sort of a tightening.

One of the things people question about this is that if the Fed says their expansion of the balance sheet [after the Great Recession] lowered rates by a percentage point, then what is their argument that when they reduce the balance sheet, it won’t increase rates by 1 percent? They haven’t really answered that satisfactorily to the market. But they have done some internal work that suggests that rates will maybe go up by a quarter of a point. We think that remains to be seen.

(From Scotsman Guide Media dated Sept 21, 2017)

Rates continued to rise last week

September 26th, 2017

As was predicted last week based upon trends, rates on 30-year fixed loans rose from their lowest levels of the year.  For the week ending September 21, Freddie Mac announced that 30-year fixed rates rose to 3.83% from 3.78%.  The average for 15-year loans increased to 3.13%, and the average for five-year adjustables moved up to 3.17%.  A year ago, 30-year fixed rates averaged 3.48%.  ABBA First Mortgage is still offering rates that are better than market rates for all those who qualify.

Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield continued its upward trend, rising 7 basis points this week. As we expected, the rate on 30-year loans followed suit, increasing 5 basis points to 3.83 percent. This week’s uptick in the 30-year rate ends a nearly two-month streak of declines.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. 

Mortgage rates continue to rise. ABBA First trying to hold the line. Call for our discounted rate.

September 25th, 2017

Mortgage rates rose last week for the second straight week as market tensions continued to ease, according to Bankrate.com’s weekly national survey.

The benchmark 30-year fixed mortgage rate rose above the 4% threshold to 4.04% from 3.99% the week before. Discount and origination points for the mortgage type averaged 0.28.

Rates for the larger jumbo 30-year fixed mortgage increased to 4.09%. The average 15-year fixed mortgage rate hiked to 3.25% from 3.22% the prior week. The mortgage type had 0.23 average discount and origination points.

The 5-year adjustable-rate mortgage (ARM) rose to 3.52% from 3.46% the week before. It had 0.35 average discount and origination points. The average rate for the 7-year ARM also increased last week to 3.69%.

Bankrate.com said the modest increase came as market tensions eased, driving rebounds in bond yields and mortgage rates. Additionally, the higher rates came as the Federal Reserve announced that it would begin downsizing its $4.5 trillion bond portfolio. Yields on government- and mortgage-backed bonds rose higher as investors unwound some of their holdings, the company said.

Meanwhile, Freddie Mac’s Primary Mortgage Market Survey showed the average rate for the 30-year fixed mortgage rose for the first time in seven weeks. The rate averaged 3.83% for the week ending Sept. 21, up from the 3.78% average in the prior period. The mortgage type had an average 0.5 point.

The 15-year fixed-rate mortgage averaged 3.13% with an average 0.5 points, an increase from the previous 3.08% average. The 5-year Treasury-indexed hybrid ARM averaged 3.17% with an average 0.4 point, up from the 3.13% in the previous period.

“The 10-year Treasury yield continued its upward trend, rising seven basis points this week,” Freddie Mac Chief Economist Sean Becketti said. “As we expected, the 30-year mortgage rate followed suit, increasing five basis points to 3.83%. This week’s uptick in the 30-year mortgage rate ends a nearly two-month streak of declines.”

Rates to go up with the Federal Reserve reducing billions of dollars of US Treasury holdings.

September 22nd, 2017

The Federal Reserve announced Wednesday that it will begin unwinding its massive balance sheet beginning in October, a move that could push up longer-term mortgage rates.

Also, as widely expected, the central bank’s Federal Open Market Committee (FOMC) left the target federal funds rate unchanged at the conclusion of its two-day meeting this week, setting the stage for a possible rate hike in December.

The Fed signaled in June that it would begin to reduce a portion of its $4.5 trillion in holdings in U.S. Treasurys and mortgage-backed securities (MBS) that were largely accumulated during a bond-buying stimulus program after the Great Recession.

The balance sheet is now roughly five times the size of its pre-recession level. Some analysts believe the Fed will try to reduce that over time to the range of $2 trillion to $2.5 trillion.

Fed Chair Janet Yellen told reporters Wednesday that the easing efforts did its job, with studies suggesting that it may have lowered mortgage rates by a full percentage point. She emphasized that the unwinding will be slow and gradual; however, she also indicated that it would take a severe downturn for the Fed to stop tapering.

“By limiting the volume of securities that private investors will have to absorb as we reduce our holdings, the caps should guard against outsized moves in interest rates and other potential market strains,” Yellen said during the news conference on Wednesday following the FOMC meeting.

The tapering could put upward pressure on longer-term rates, however. The Fed ended the stimulus program in October 2014 by ceasing to add to its holdings, but has continued to reinvest in securities to maintain its balance sheet at the current level. As the demand for the agency MBS and Treasurys decreases with the Fed pullback, it may put pressure on rates. Higher interest rates may be required to entice more private investors into the MBS market.

According to a schedule it first announced in June, the Fed will allow $6 billion in U.S. Treasury holdings and $4 billion in mortgage-backed securities and agency debt to roll off its balance sheet each month. This level will continue each month through December. The caps will then step up gradually to $30 billion monthly in Treasury holdings and $20 billion in agency debt next year.

The Fed’s move to reduce its balance sheet is a sea-changing event for the mortgage industry, according to analysts.

“For much of the past decade, the Fed has been the largest investor in mortgages in the world,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association. “We expect that private investors will, over time, step in to buy MBS,” he added. “But we can’t be certain how quickly they will replace the steady demand that the Fed has been providing.”

Fratantoni also said the move was “very well telegraphed” and probably won’t have much impact immediately on rates. Over time, however, as the Fed picks up the pace, it could cause some rate volatility.

In its other major decision, Fed policymakers left the benchmark rate unchanged in the range of 1 to 1.25 percent. Fratantoni said the Fed’s statement was “relatively hawkish,” suggesting a rate hike in December, and possibly three or four increases each year until the fund target range hits 3 percent.

“Even though inflation remains relatively low, the tight job market is leading the Fed to slowly move rates up to prevent the economy from overheating,” Fratantoni said.

Most analysts have predicted the FOMC will raise the rate by a quarter percent at least one more time this year. The most likely date is following the Dec. 12-13 FOMC meeting, for which Yellen has scheduled a news conference. The FOMC also has a two-day meeting slated for Oct. 31 and Nov. 1.

Millions affected by credit report hackers!

September 18th, 2017

It’s been reported that information which included hundreds of thousand of SS# and/or credit card information has been stolen by hackers.

The data breach revealed by Equifax last week – hackers stole the personal information of 143 million consumers from the credit reporting agency – is one of the largest in history. And for people trying to get a mortgage, it could potentially be one of the most damaging.

The breach could affect more than half the adult population of the United States, according to a report by Realtor.com.

“Bar none, this is the worst data breach we’ve ever had,” identity theft expert Rob Douglas told Realtor.com. “This is the one everyone worried about.”

“It’s not a breach where they just got a Social Security number or another breach where they just got a credit card number,” Douglas told Realtor.com. “Here, they got the whole enchilada. This is now a danger for a lifetime.”

So what do we do as unsuspecting consumers that may be affected by this tragic incident?  Please check your credit for any transactions that are shown that you may question.  EVERYBODY has access to this annual free credit report found online at www.annualcreditreport.com    Contact your credit card companies immediately if you see any fraudulent activity on your report.

The treasury market is moving up- with mortgage interest rates to follow suit!

September 15th, 2017

Mortgage rates remained unchanged from last week’s year-to-date low but going forward they are likely to increase as 10-year Treasury yields rose.

30-Year FRM 15-Year FRM 5/1-Year ARM
Average Rates 3.78% 3.08% 3.13%
Fees & Points 0.5 0.5 0.4
Margin N/A N/A 2.74

The 30-year fixed-rate mortgage averaged 3.78% for the week ending Sept. 14, the same as last week, according to Freddie Mac. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.5%.

We see that if rates continue to climb, it changes the mindset of many who may then “hold off” with their purchase or refinance hoping to see rates drop once again.  This however, is very unlikely while present day mortgage rates are so close to the bottom that many analysts believe interest rates must go up as the country strives to stave off inflation.

At ABBA First Mortgage, our rates are not only in line with rates from around the country, but we typically can offer you better than the market rate for all your mortgage needs.  We believe in helping you save monrey!  Please give us a call for a free rate quote and see what we can do for you.  866-676-3349

Our rates are great! Call toll free 866-676-3349 to find out for yourself!

September 6th, 2017

Although the average rate mortgage interest rate is very low all across the country, ABBA First offers lower rates and the best service for all your mortgage needs.  Rates on 30-year fixed loans hit their lowest levels of the year for the second straight week.  For the week ending August 31, Freddie Mac announced that 30-year fixed rates fell to 3.82% from 3.86% the week before.  The average for 15-year loans decreased to 3.12% and a year ago, 30-year fixed rates averaged 3.46%.   Attributed to Sean Becketti, chief economist, Freddie Mac — “The 10-year Treasury yield fell to a new 2017-low on Tuesday. In response, the rate on 30-year loans dropped 4 basis points to 3.82%, reaching a new year-to-date low for the second consecutive week. However, recent releases of positive economic data could halt the downward trend of interest rates.”

Please consider your best rate now through ABBA First Mortgage.  Call me, Rich Sr., and as the owner of ABBA First, I will walk you through your mortgage inquiry and offer you the best of the best that you can find anywhere!

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Does your home have two master bedrooms?

August 28th, 2017

If your home has two master bedrooms, you may very well have a highly desired feature that many couples want in their next home and are willing to pay extra for. Among the top 10 percent of markets nationwide, active listings that include multiple master bedrooms are priced, on average, about 9 percent higher than those with just one master, according to a realtor.com® analysis. Luxury home builders are taking notice of the growth in demand. A 2016 survey by John Burns Real Estate Consulting found that nearly one in three potential home buyers in the $2 million and above price range said they wanted dual master bedrooms. “This was the first survey where we asked about a dual master—prior to this year, it wasn’t on the radar at all,” says Pete Reeb, a principal with John Burns Real Estate Consulting. Some couples are finding separate bedrooms a must. “There has been this stigma about people sleeping apart,” says Wendy Troxel, a clinical psychologist and senior behavioral scientist at the Rand Corp. “But perhaps we are moving more toward this acceptance that there is not one-size-fits-all.” Some people desire two masters because they’re struggling to get to sleep, such as due to insomnia, snoring, or REM sleep behavior, says Rafael Pelayo, a clinical professor of psychiatry and sleep specialist at Stanford Sleep Medicine Center. Also leading to higher demand for extra masters: multigenerational living. Elderly parents and boomerang offspring are expressing more desires for larger separate bedroom areas, housing analysts note. Source: The Wall Street Journal

It’s your decision- Lock now or risk rates rising

August 22nd, 2017
  • Last week 30-year fixed rates were slightly lower, continuing a trend which started four weeks ago.
  • For the week ending August 17, Freddie Mac announced that 30-year fixed rates fell one tick to 3.89% from 3.90% the week before.
  • The average for 15-year loans decreased to 3.16%, and the average for five-year adjustables moved up slightly to 3.16%.
  • A year ago, 30-year fixed rates averaged 3.43%.
  • Attributed to Sean Becketti, chief economist, Freddie Mac — “Following a mild decline last week, the 10-year Treasury yield rose 1 basis point this week. The rate on 30-year fixed loans similarly remained relatively flat, falling just 1 basis point to 3.89 percent. Rates on home loans are continuing to hold at low levels amidst ongoing economic uncertainty.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.