News/Blog

Rates Inch Higher – September 2018 Edition

Although this week’s major U.S. economic data and European Central Bank meeting contained more good news than bad for mortgage rates overall, rates ended slightly higher.

The most recent inflation data came in at lower than expected levels. The Consumer Price Index (CPI), a widely followed monthly inflation report that looks at the price change for goods and services, was just 2.2% higher than a year, down from an annual rate of increase of 2.4% last month. Lower inflation is positive for mortgage rates, but the reaction to the data was small.

The Retail Sales report released this week was mixed. Excluding the volatile auto component, retail sales in August rose just 0.3% from July, which was below the consensus for an increase of 0.5%. However, the July results were revised higher by an amount comparable in size to the August shortfall. As a result, the data was essentially neutral for mortgage rates.

Thursday’s European Central Bank (ECB) meeting produced no significant surprises and had little impact on U.S. mortgage rates. The ECB lowered its forecast for economic growth this year and next, but confirmed its plans to wind down its massive 2.5 trillion euro bond purchase program by the end of this year. ECB officials also said that they plan to hold the benchmark interest rate at current levels at least through the summer of 2019.

Looking ahead, the housing data will be the main focus. The NAHB home builder confidence index will be released on Tuesday. Housing Starts will come out on Wednesday. Existing Home Sales will be released on Thursday.

Weekly Change
Mortgage rates rose 0.02
Dow rose 250
NASDAQ rose 125
Calendar
Tue 9/18 NAHB Housing
Wed 9/19 Housing Starts
Thu 9/20 Existing Home Sales

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Trade Negotiations – August 2018 Edition

While there was some major economic data released this week, there were no significant surprises, and its impact on mortgage rates was minor. By contrast, news on trade deals caused a negative reaction, and mortgage rates ended a little higher.

The Trump administration long ago expressed an intention to end the NAFTA trade agreement which has been in place with Canada and Mexico since the start of 1994. On Monday, it was reported that a new trade deal had been reached with Mexico. Later in the week, the administration said that progress had been made with Canada, and at the time of this writing there remained hope for an agreement by the end of the day. The uncertainty surrounding the trade situation and the potential for escalation prompted investors to shift in recent months to relatively safer assets, including U.S. mortgage-backed securities (MBS). This added demand for MBS has been positive for mortgage rates. Thus, an easing of trade tensions this week caused the reverse effect, and the reduced demand for MBS pushed mortgage rates higher.

The latest reading for the primary indicator of confidence in current and future U.S. economic conditions suggested that consumer spending may remain strong in coming months. Consumer Confidence surged far more than expected to the highest level since 2000. A strong labor market, solid economic growth, and record stock prices have contributed to a high level of optimism.

There are two major inflation reports released each month. The core consumer price index (CPI) is more closely watched by investors, while the core PCE price index is the inflation indicator favored by the Fed. Earlier this month, core CPI for July rose to the highest annual rate of increase since 2008. On Thursday, core PCE showed a continuation of a similar upward trend. In July, Core PCE, which excludes the volatile food and energy components, was 2.0% higher than a year ago, up from an annual rate of 1.9% last month. After running at lower levels for most of the past six years, core PCE has climbed to the Fed’s stated target level for inflation of 2.0%. If the upward trend continues, at some point it might cause the Fed to tighten monetary policy more quickly, but comments from Fed officials suggest that we are not particularly close to undesirably high levels.

Looking ahead, the important monthly Employment report will be released on Friday. As usual, these figures on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the ISM national manufacturing index will come out on Tuesday and the ISM national services index on Thursday. In addition, news on trade deals could influence mortgage rates.

Weekly Change
Mortgage rates rose 0.03
Dow rose 200
NASDAQ rose 50
Calendar
Tue 9/4 ISM Manufacturing
Thu 9/6 ISM Services
Fri 9/7 Employment

All material Copyright © Ress No. 1, LTD (DBA MBSQuotelin

No Surprises

While there was major economic data released this week and a Fed meeting, there were no significant surprises. Mortgage rates ended the week a little higher.

Friday’s key Employment report came in pretty much right on target across the board. Against a consensus forecast of 190,000, the economy gained 157,000 jobs in July. However, upward revisions added 59,000 jobs to the results for prior months. The economy has gained an average of 215,000 jobs per month so far this year, exceeding even the strong pace of 184,000 seen over this period last year.

The unemployment rate decreased from 4.0% to 3.9%, matching expectations. Average hourly earnings, an indicator of wage growth, also matched expectations. They were 2.7% higher than a year ago, the same annual rate of increase as last month.

As expected, the Fed made no policy changes at Wednesday’s meeting. The Fed’s statement was very similar to the prior one from the June meeting. The most notable change in the statement was that Fed officials modestly upgraded their assessment of the pace of economic growth. In particular, the statement said that economic activity “has been rising at a strong rate,” while the prior statement described it as “solid.” In addition, Fed officials noted that household spending and business investment have “grown strongly.” In June, they just said that it had “picked up.” Investors expect that the Fed will raise the federal funds for the third time this year at the next meeting on September 26.

Looking ahead, the JOLTS report, which measures job openings and labor turnover rates, will be released on Wednesday. Fed officials value this data to help round out its view of the strength of the labor market. The Consumer Price Index (CPI) will come out on Friday. CPI is a widely followed monthly inflation report that looks at the price change for goods and services. In addition, Treasury auctions on Wednesday and Thursday could influence mortgage rates.

Weekly Change
Mortgage rates rose 0.02
Dow rose 300
NASDAQ rose 150
Calendar
Wed 8/8 JOLTS
Thu 8/9 PPI
Fri 8/10 CPI

All material Copyright © Ress No. 1, LTD (DBA MBSQuotelin

Quiet Week

This week was one of the quietest of the year. The major economic data generally matched the expected levels, and mortgage rates ended nearly unchanged.

Core CPI July 2018

The most significant economic data released this week was the inflation data. The Consumer Price Index (CPI), the most closely watched monthly inflation report, looks at the price change for finished goods and services. Thursday’s release revealed that inflation has continued to rise in recent months. Core CPI, which excludes the volatile food and energy components, was 2.3% higher in June, up from an annual rate of increase of 2.2% last month. This was the highest level since January 2017.

While it had little market impact, Fed officials took careful note of the latest JOLTS report. The data revealed that there were 6.6 million open positions, but only 6.1 million unemployed people in the labor force. 36% of small businesses reported not being able to fill open positions in June, matching the record peak seen in 2000. Also, a very high level of employees willingly left their jobs, which is an indication that they are confident in their prospects for finding another job. All of these signs point to a tightening labor market.

Looking ahead, Retail Sales will be released on Monday. Consumer spending accounts for about 70% of economic activity in the U.S., and the retail sales data is a key indicator of growth. Industrial Production, another important indicator of economic growth, will come out on Tuesday. Housing Starts will be released on Wednesday.

Weekly Change
Mortgage rates flat 0.00
Dow rose 700
NASDAQ rose 300
Calendar
Mon 7/16 Retail Sales
Tue 7/17 Industrial Production
Wed 7/18 Housing Starts

All material Copyright © Ress No. 1, LTD (DBA MBSQuotelin

Housing Data

After last week’s packed economic calendar, this week there was virtually no significant news except for some housing market data. It was an extremely quiet week, and mortgage rates ended almost unchanged.

In May, sales of previously owned homes decreased slightly from April, and they were 3% lower than a year ago. The inventory of previously owned homes for sale rose 3% from April to a 4.1-month supply, but it was 6% lower than a year ago. Even with the increase, inventory levels remain very low by historical standards and are holding back sales. A 6.0-month supply is considered a healthy balance between buyers and sellers. The median home price was 5% higher than a year ago.

In an encouraging sign, home builders may be helping to address the shortage of inventory. In May, housing starts jumped a stronger than expected 5% from April, to the highest level since July 2007. Both single-family and multi-family units rose by a comparable amount. Despite rising labor and lumber costs, builders appear to be eager to supply more homes to the markets.

Looking ahead, New Home Sales will be released on Monday. Durable Orders, an important indicator of economic activity, and Pending Home Sales will come out on Wednesday. Core PCE, the inflation indicator favored by the Fed, will be released on Friday. In addition, Treasury auctions on Wednesday and Thursday could influence mortgage rates.

All material Copyright © Ress No. 1, LTD (DBA MBSQuotelin

Italy and U.S. Job Gains – June 2018 Edition

News from Italy was positive for mortgage rates this week. However, this was partially offset by stronger than expected U.S. labor market data. Mortgage rates ended the week a little lower.

Italy has one of the largest economies in the European Union (EU). In recent years, Italy’s economic growth has been below the average for the EU as a whole, and its unemployment rate has been higher than average. The newly formed coalition government is proposing some major changes to attempt to address these issues. In particular, it would like to reduce the government spending constraints imposed by EU rules. Investors are concerned that this will lead to an increase in Italy’s already large budget deficit and that the risk has increased that Italy could one day exit the EU. The resulting uncertainty caused investors to shift to safer assets, including U.S. mortgage-backed securities (MBS), which helped push mortgage rates lower this week.

By contrast, stronger than expected labor market data pressured mortgage rates a little higher on Friday. Against a consensus forecast of 190,000, the economy added 223,000 jobs in May. In addition, upward revisions added 15,000 jobs to the results for prior months. The economy has gained an average of a very healthy 207,000 jobs per month so far this year.

The unemployment rate declined from 3.9% to 3.8%, the lowest level since 2000. Average hourly earnings, an indicator of wage growth, were 2.7% higher than a year ago, up from an annual rate of increase of 2.6% last month.

Looking ahead, Factory Orders will be released on Monday. The ISM national services index will come out on Tuesday. The JOLTS report, which measures job openings and labor turnover rates, will be released on Wednesday. In addition, news about Italy could influence mortgage rates again next week.

All material Copyright © Ress No. 1, LTD (DBA MBSQuotelin

ECB Spooks Investors – May 2018 Edition

The market moving economic news this week again was viewed as negative for mortgage rates. This time the source was the European Central Bank (ECB). The U.S. economic data mostly came in on target and caused little reaction. Mortgage rates reached the highest levels in seven years.

On Monday, a speech from a top ECB official was viewed by investors as unexpectedly hawkish, meaning in favor of tighter monetary policy. Galhau, the governor of the Bank of France, said that the ECB might soon provide guidance about the timing of its first rate hike in years. While investors anticipate that the ECB will end its bond buying program later this year, they were somewhat surprised by the talk about rate hikes, and some investors viewed his speech as opening the door for rate hikes to take place sooner than expected. Bond yields around the world moved higher after the speech, including U.S. mortgage rates.

Next to the Employment data, the report on retail sales is one of the most closely watched each month. Consumer spending accounts for about 70% of economic activity in the U.S., and the retail sales data is a key indicator of growth. Following the hurricanes, retail sales showed very strong gains for three months last fall.

Sales then unexpectedly posted three months of losses, causing investors to worry that economic growth was slowing. However, the most recent data released this week showed a healthy increase in April of 0.3% from March. Combined with the solid gains seen in March, it appears that the three weak months were not indicative of a longer-term trend.

Looking ahead, New Home Sales will be released on Wednesday and Existing Home Sales on Thursday. Durable Orders, an important indicator of economic activity, will come out on Friday. In addition, Treasury auctions on Wednesday and Thursday could influence mortgage rates.

All material Copyright © Ress No. 1, LTD (DBA MBSQuotelin

MGIC Economic Report

Following are some key highlights from the January Economic report:

– The U.S. economy is healthy and continues to growth at a steady pace.
– For the most part, the economy is not currently showing signs of overheating.
– Payrolls continue to expand at a steady rate as the unemployment rate remains under 5%.
– The U.S. is on course to add over 2 million workers to payrolls for the 6th straight year.
– Even though employment growth is slower than previous years, it is still enough to accommodate new entrants into the work force.
– Current job opening are around 5.5 million, which should result in stronger wage growth as well as attract more workers into the labor force.
– Some industries continue to report that they are having a difficult time finding the skilled workers to fill open positions.
– The West remains the strongest of the four regions, followed by the South.
– The strongest job growth was reported in California, Florida, Texas, New York, Washington and Georgia.
– Similar to the overall economy, the housing market grew at a slow and steady rate.
– The housing market should continue to improve as the underlying fundamentals of the economy remain solid.
– Total home sales, both new and existing properties, are currently about 6 million on an annual basis, with the strongest activity being in the South.
– The supply of both new and existing homes is currently near 5 months.
– The lack of inventory for both new and existing homes remains a problem and is impacting housing affordability in some markets.
– Home price appreciation remains in the 5% to 6% range, with some of the strongest gains being in the West.
– Most economic forecasts for 2017 remains positive with growth similar to 2016; however, there are a number of unknown factors that could cause a change with the new administration.

economy

Appreciation is Over 13%: Home Values are Going Up

Welcome back to double-digit appreciation rates.  And its not a fad. Home Prices have now logged 20 straight months of gains in home values.

The S&P Case-Shiller 20-city home price index climbed 1.05% month-over-month in October. On a year-over-year basis, home prices were up 13.61%.This was the biggest gain since February 2006.

“Home prices increased again in October,” David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said in a press release. “Both Composites’ annual returns have been in double-digit territory since March 2013 and increasing; now up 13.6% in the year ending in October.

house1

FHA Loan for Nebraska & Iowa

FHA loan helps first time home buyers

We all know how difficult it can be to buy your first home. If you are a first time home buyer looking to buy property in Colorado, Denver, Iowa, Omaha or Nebraska you need find out if you qualify for a FHA loan. An FHA mortgage is insured by the Federal Housing Administration and the good news is that it is easier to qualify for a FHA loan than a conventional mortgage.

An FHA mortgage also offers other benefits including lower rates, lower mortgage settlements and lower down payments.  If you are looking to buy real estate in the Midwest, Freedom Lending can help with an FHA mortgage, thereby bringing you one big step closer to your owning your dream home. And you don’t need a perfect credit score to qualify for an FHA loan. Even if you have filed for bankruptcy or have a bad credit history, Freedom Lending can help you with your credit repair and your FHA loan.

Heavy deposits of 10% and more often make it impossible new home seekers to acquire real estate.  An FHA loan only requires a down payment of 3.5% thereby lowering the barriers to entry substantially. The FHA also makes it possible for sellers or builders to pay some of the mortgage closing or settlement costs. This makes the property purchase even more attractive and helps to close the sale. You can also refinance your existing mortgage with FHA streamline refinancing.

So as you can see there are many advantages and benefits to an FHA loan. In order to get an FHA loan you need to apply through an FHA approved lender such as Freedom Lending. Now you can get your little piece of real estate right here in the Midwest, from Colorado to Nebraska.