Everyone’s got an opinion…

  • November 18, 2013

Today the bond market opened with a rally, improving the price of the zero point rate by .25 points. Light supply of Mortgage Backed Securities caused a shortage in the market causing prices of these bonds to go up and your mortgage rates to go down. Today, it seems that everyone over at the Fed has an opinion about the current economic policy and given a platform they will express it. William Dudley, an influential U.S. Central Banker, stated at 1 PM today that there is not enough economic growth to warrant a reduction in Quantitative Easing. Someone hand him a microphone. Shortly after Charles Plossner, another influential U.S. Central Banker stated the labor market has improved enough to end asset purchases. He feels the Fed should set a fixed dollar amount in the bond buying program and then bring it to an end. Preach! Janet Yellen added last week that she is monitoring unemployment closely when making a decision to exit the market. Janet, don't get off your soap box just yet Jobless Claims are announced this Thursday. There is no economic news on the calendar tomorrow. However, Wednesday is a big day with the FOMC minutes scheduled to…

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Friday: The Good, the Bad and the Bond Market

  • November 15, 2013

It’s Friday! Another week is behind us folks. Let’s break it down to what was good and what was bad: The bond market opened down and out on this holiday shortened week with fear of potential tapering. This was caused by a stronger than expected employment report on Friday. Bad news for the bond market--rates went up. Initial Jobless Claims fell to 330K another sign that the economy is picking up steam. Bad news; mortgage rates went up again. Oh no. But, wait all is not lost! The New York Manufacturing Index contracted this week. Good news for the Bond Market--mortgage rates went down. Then Janet Yellen took to the stage and claimed her bond buying habits are sticking around. Yes! Rates went way down. We like you already Janet! Next week has a cornucopia of economic data including Retail Sales, Philly Fed, Inflation which is always fun, and Existing Home Sales. Have a good weekend. By Lindsey Fediuk, Quicken Loans Capital Markets Analyst

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The Bond Market is doing it for itself…

  • November 14, 2013

The Bond Market rallied late yesterday and there was no single piece of economic news that caused it.  Rates got a much needed improvement, decreasing the cost of the zero-point rate an additional 1/2 point. Jobless claims continued to edge slightly lower, but it wasn’t enough to move rates lower. •   Freddie Mac reported the 30-year fixed mortgage rate jumped to 4.35% despite the recent market move. •   Housing affordability eroded in the third quarter, the Housing Opportunity Index fell from 69.3 percent to 64.5. This was caused by improving home values and building costs also rising.  So, houses are less affordable, and current homeowners are happy about it. •   Janet Yellen took the stand today defending her ultra easy money policy stating it is “imperative” that we see sustained economic growth. Job growth will be a major indicator for her policy going forward. Go ahead and ring your own bell, Janet. Tomorrow, Industrial Production is forecasted to be flat in October. This gives little indication of actual economic growth. We need this sector to stand on its own two feet… [table id=4 /]

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What’s all the Yellen about?

  • November 13, 2013

The bond market opened with a rally; improving rates for the first time this week.  Let’s yell it from the rooftops, “investors finally came back to the market to buy our bonds!” Some economists attributed the move to optimism surrounding Janet Yellen’s nomination hearing tomorrow. Others said it’s just the market correcting from yesterdays weak trading volumes. Either way…we will take it! •     Mortgage applications declined 1.8 percent this week as mortgage rates increased after the Employment Report. Let me get up on my soap box for a second, “Hey, everyone these are still historically attractive rates.” •     The zero point rate 4.625% now pays you .125 points, that’s an extra ½ more than yesterday to cover fees and other closing costs. That’s something to yell about, right? Sure it is. •     Purchase Index was flat; although the number was positively revised it is still below the annual average. You know homes are still affordable, I might get out there and buy one. Tonight Ben Bernanke is scheduled to speak. Investors are looking for any indication surrounding future economic policy. So, at 7 PM tonight get excited and turn on CSPAN to hear Big Ben speak. By Lindsey Fediuk, Capital…

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Knockout Punch

  • November 12, 2013

The market was unable to slip the jab the Employment Report delivered; we didn’t even get a chance to counterpunch. The market was closed yesterday in observance of Veteran’s Day. We needed to work on our bob and weave before our next match anyway. Good news, your mortgage rates stayed the same. Bad news, rates increased significantly Friday. The zero point rate increased to 4.625% costing .625 points. Today mortgage rates recovered slightly, however not enough to move the zero point rate, which stands at 4.625% but it only costs .125 points today. We need to get more investors to buy tickets to our fight. The Atlanta President of the Federal Bank was quoted this afternoon stating the economy still needs strong support. However, he mentioned the stimulus tools used to provide that support may change in the coming months. It appears he is in our corner, hand me a towel. Our next opponent, or maybe supporter, Janet Yellen will start to defend her nomination and current economic policy on Thursday. That could be a good fight, it’s free on CSPAN. Tomorrow is another quiet day in economic news; so no sucker punches should be coming our way….hopefully. By Lindsey…

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Tap Tap…Mic Check. Is this thing on?

  • November 7, 2013

Just give me a platform. The market rallied in the pre-trading hours courtesy of the ECBs interest rate decision. However, all gains were lost with the GDP and Jobless Claims released this morning. The European Central Bank chose to cut interest rates to a new record low of .25%, causing investors to seek U.S. securities with a higher yield. Dear Europe, thank you. GDP came in stronger than expected suggesting the economy is growing, however consumer spending continues to lose momentum. I knew I should have bought that second Mt. Dew this morning. Initial Jobless Claims came in on the screws! It matched economists’ forecast at 336K. Good news for the mortgage industry: delinquencies and foreclosures declined this quarter. Despite the news reel above, the market remained flat with the zero point rates hovering around 4.5%. Is this microphone on? Investors? Yeah, hi, come buy our bonds. Maybe Jobs Friday will get their attention. - Lindsey Fediuk, Capital Markets Analyst

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