Financial markets are confused by FOMC minutes.  Mortgage rates were improving this morning but prices for mortgage backed securities and Treasuries went south this afternoon.  Hopefully the markets will find comfort when digging deeper int these minutes tomorrow, which may result in regaining some of the mortgage rate losses.

 

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Mortgage rates shot dramatically higher after Friday’s long-awaited employment report.

Prior to Friday mortgage rates were relatively steady throughout most of the week trading within a narrow range.   The unemployment rate in October stood at 7.3% and the economy added 204,000 jobs. Traders expected the unemployment rate at 7.3% and the creation of 110,000 jobs. Mortgage interest rates finished the week worse by approximately 7/8 of a discount point.

Adding to the angst of bond traders was a third quarter GDP report that also raised expectations the Fed might begin decreasing their bond purchases in December.  The Commerce Department’s release of its advance third-quarter estimate of GDP showed an annualized economic growth rate of 2.8%, well above consensus estimates of 1.9%.

The Bond markets are closed Monday in observance of Veterans Day, and the economic calendar is light the rest of the week.  The biggest events on this week’s calendar are prepared speeches from five Federal Reserve members, including one from Federal Reserve Chairman Ben Bernanke.

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Traders will be listening to the Fed speeches, searching for clues about whether QE3 will continue indefinitely, or whether the program is headed for a “taper”. Rates are expected to move sharply should the Fed provide specific, clear direction.

Mortgage rates remain low, compared to historical levels now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Paul Cantor

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 This should be good news for interest rates rates.  Falling rates means the opportunity to refinance missed by many home owners in the spring may be open again.  Approval on HARP 2.0 loans is getting easier as well.

Also of interest is the spike over the last 4 years in the duration of unemployment.  This indicates that the percentage of employable people actually employed remains high.

 

claims-and-unemployment

Job Openings and Labor Turnover Summary

Weekly Initial Unemployment Claims decline to 350,000.

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Yes We are Open

Oct 17, 2013

yes-were-openAs anticipated in an eleventh hour deal Congress and the President agreed on a deal to re-open the Government and avoid a true debt ceiling crisis.  This kicking of the can means in about 90 days we will see a repeat.

Today:

– Markets react to passage of debt deal overnight
– Earliest indications suggest potential return to range
– Most of this morning’s economic data is reporting as normal

We know that the BLS collates most of the data by the Wednesday of NFP week, and that they were still on the clock on the Monday of NFP week. That creates an outside chance of the payrolls data arriving within the next few business days, but we have no indication thus far whether they’ll attempt to expedite it or take their sweet time.  Failing that, we at least have Jobless Claims and Philly Fed today. The latter is one of the more  significant pieces of economic data that remained on the scheduled during the shutdown, and the market’s reaction may offer clues as to the immediate role of economic data vs headlines and debt deal reactions

It is now 90 days and counting down before the next crisis in Washington.

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by | Categories: main, The Economy | No Comments

Mortgage News Daily – Oct 9 2013, 11:27AM

The White House has confirmed that President Obama will announce his nomination of Janet Yellen to succeed Ben Bernanke as Chairperson of the Federal Reserve’s Board of Governors.   Yellen, who has served as Fed Vice Chair since 2010 will become the first woman to head a central bank among major powers although there are a half dozen in the development world.  Her appointment, one commentator said this morning, will make her the most powerful woman in the country.

Yellen has been a close ally of Bernanke and is generally expected to continue his accommodative monetary policies . . .

Yellen Brings Impeccable Foresight and Soothing Continuity as Fed Chair

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by | Categories: main, The Economy | No Comments

Another sign of rising home prices and a healthier housing market (from Calculated Risk)

 

Calculated Risk: Framing Lumber Prices increased recently.

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by | Categories: The Economy | No Comments

Mortgage rates improved last week by approximately one-third of a discount point, meaning the same note rate cost less at the end of the week than at the end of the previous week.  Much of this improvement in mortgage rates was due to the headlines in the Middle East, coupled with weaker than expected retail sales data.

This week should prove interesting.  Markets have been waiting for month for the Fed’s decision on tapering of bond purchases, scheduled for Wednesday.  Other potential market moving data due to be released this week include inflation measuring CPI, weekly jobless claims, housing starts and Leading Economic Indicators.

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 MBS (Mortgage Backed Securities) pricing has started off in a positive direction for rates this morning in reaction to the news that Lawrence Summers has been dropped from the list of possible replacement for Ben Bernanke and weaker than expected Empire Manufacturing Survey and Industrial Production.

Although the Fed is expected to announce the slowdown of bond purchases, this may be a positive move for rates if the Fed slows down the purchase a treasuries faster that the purchase MBS, especially as the volume of MBS hitting the market is slowing due to the rise in rates.  This being said it is unlikely that rates will return to the low levels of early May.

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Last week proved to be a volatile week for mortgage rates.  Economic data was mixed and home loan rates continued to rise until Friday when the release of a declining rate of new home sales.

  econ08262013

This last week of August is packed with an economic calendar that will most likely lead to mortgage rates on another roller coaster ride.

Mortgage rates continue remain attractive, compared to historical levels, it is a great time to consider a home purchase or refinance.

 

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August 15, 2013 – Builder confidence in the market for newly built, single-family homes rose three points to 59 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for August, released today. This fourth consecutive monthly gain brings the index to its highest level in nearly eight years.   Read Full Article

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Last week brought a mixed bag of economic news.  Mortgage rates rose slightly last week, trading was calm as many were on summer vacations.  It will be worth returning from vacation for this week as lots of items are on the economic calendar.

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This week expect lots of rate volatility starting on Tuesday when consumer confidence numbers are released.  Other market moving items on the calendar include GDP, Fed adjournment, Payroll data, unemployment rate and PCE prices.

Keep thing is prospective when thinking about locking a rate.  Rates remain low and it is still a great time to purchase or refinance a home

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