mortgage rates Archives

April 16, 2016

Economic update for the week ending April 16, 2016

Stocks up for the week – Stocks rallied on better than expected Chinese trade data which indicated that the China’s economy may not be hitting the “hard landing” investors has feared. At the same time U.S. manufacturing output unexpectedly dropped in March, as factory output dropped 0.3% in March. This held back the gains. The Dow Jones Industrial Average closed the week at 17,897.46, up from 17,576.96 last week. The S&P 500 closed the week at 2,080.73, up from 2,047.60 last week. The NASDAQ closed Friday at 4,938.72, up from 4,850.69 last week.

Bond yields lower for the week – The 10 year U.S. Treasury bond closed Friday yielding 1.76%, almost unchanged from 1.72% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.56%, unchanged from 2.55% last week. Mortgage rates follow bond yields so we watch bonds carefully.

Mortgage rates remain near three year low -The Freddie Mac Primary Mortgage Survey released on April 7, 2016 showed that average mortgage rates from lenders surveyed for the most popular products were as follows: The 30 year fixed average rate was 3.58%. The 15 year fixed average rate was 2.86%. The 5/1 ARM average rate was 2.84%.

Have. Great weekend!

Syd

March 12, 2016

Economic update for the week ending March 12, 2016

Stocks higher for the fourth straight week – Stock markets are now only slightly down for the year. They have made up the large losses suffered in Janurary and early February. The S&P, for example, is up 11% from its two year low on February 11. This four-week rally has been fueled by better economic data and rising oil prices. Oil prices have risen 47% from their low point just one month ago when U.S. crude oil hit a 13 year low of $26.21 a barrel. Oil prices and stocks have moved in the same direction every week. While low oil prices have hurt many parts of the global and local economy, consumers are benefiting. As gasoline prices rise at the pump it will be interesting to see what happens with retail sales which have been extremely strong, and auto sales that are at all time record highs. These two sectors of consumer spending have been bolstered by low gasoline prices which have given consumers more disposable income. The dollar which has been extremely strong has weakened a bit over the last few weeks. That’s a good sign for manufacturer’s outlook on exports, as a weaker dollar makes U.S. goods less expensive to foreign currencies. The dollar is still quite strong, but off its highs. The Dow Jones Industrial Average closed the week at 17,213.31, up from 17,006.77 last week. The S&P 500 closed the week at 2,022.19, up from 1,999.99 last week. The NASDAQ closed Friday at 4,748.47, up from 4,717.03 last week.

Bond yields higher – Bond yields have inched up over the last few weeks. The 10 year U.S. Treasury bond closed Friday yielding 1.98%, up from 1.88% last week. The 30 year U.S. Treasury bond closed Friday yielding 2.75%, up from 2.70% last week. Mortgage rates follow bond yields so we watch bonds carefully.

Mortgage rates up slightly for second week -The Freddie Mac Primary Mortgage Survey showed that average rates on March 10, 2016 were as follows: The 30 year fixed average rate was 3.68%. The 15 year fixed average rate was 2.96%. The 5/1 ARM average was was 2.92%.

We should start getting February home sales data next week. Stay tuned!

Have a great weekend,

Syd

March 25, 2013

Economic Update: Week of 3/22

Economic Update: Week ending 3/22

The federal reserve chairman, Ben Bernanke announced this week that the fed will continue bond purchases to keep long term interest rates down until substantial improvement in the employment market is seen. With that said 226,000 jobs were added in February and over the last 5 months the average has been 200,000 jobs added per month. The unemployment rate dropped to 7.7%, the lowest level since 2008. Bernanke also said that when the fed decides to pull back that they can act quickly and begin buying bonds again if the economy begins to stall. His suggestion of pulling back on bond purchases and letting long term interest rates rise to market levels mark a change in the long term foreseeable future comments made earlier this year. I believe we will see interest rates rising soon, as all indicators including employment have shown gains above what has been expected. This could begin as early as the next fed meeting.

In other news Cyprus had a run on its banks, which while newsworthy, had no impact on our economy or markets. Had it not been slow news days this would not have had much coverage as Cyprus is such a small economy. As far as home sales news: US home resale’s were up 10.2% and the median price index showed a 11.6% year to year increase for February, lower than California but huge for US! Home builders reported that they can’t find land to purchase and can not get zoning and building approval quick enough to meet demand.

Mortgage rates this week fell back toward historic lows after moving up a week ago. The average rate on 30-year loan fell to 3.54% this week, from 3.63%, a high for the year last week, and the highest rate since August 2012. The rate on the 30-year loan has been below 4 percent now for a full year and is expected to stay under 4 percent for all of 2013 based on Freddie Macs adjusted upper end of its inflation range forecast. The 15-year loan averaged 2.72% this week, from 2.79% last week. The lowest mortgage rates in decades are spurring more home purchases and refinancing. That’s really helped the broader economy. Increased sales are also pushing home prices higher. As the spring home-buying season begins, low mortgage rates will entice more people to buy homes or refinance. The National Association of Realtors reported Thursday that sales increased 0.8% in February from January to a seasonally adjusted annual rate of 4.98 million. That was the highest sales pace since November 2009, when a temporary tax credit for home buyers had boosted sales. However, some people still are unable to take advantage of the low mortgage rates, either because they can’t qualify for stricter lending rules or they lack the money for larger down payment requirements. First-time buyers made up just 30% of sales in February. In more stable economies, they make up more than 40% of sales.

March 21, 2013

Economic Update: Week of 3/15

Mortgage rates sharply rose this week as positive job reports suggest the economy continues to recover. Rates on 30-year fixed-rate mortgages averaged 3.63 percent for the week ending March 14, up from 3.52 percent last week but down from 3.92 percent a year ago. Rates on 30-year fixed-rate loans hit a low in Freddie Mac records dating to 1971 of 3.31 percent during the week ending Nov. 21, 2012. For 15-year fixed-rate mortgages, rates averaged 2.79 percent, up from 2.76 percent last week but down from 3.16 percent a year ago. Rates on 15-year fixed-rate loans hit a low in Freddie Mac records dating to 1991 of 2.63 percent during the week ending Nov. 21, 2012. For five-year Treasury-indexed hybrid-rate mortgage (ARM) loans, rates averaged 2.61 percent, down from 2.63 percent last week and 2.83 percent a year ago. Rates on one-year Treasury-indexed ARM loans averaged 2.64 percent, virtually unchanged from 2.63 percent last week, but down from 2.79 percent a year ago. Rates on one-year ARM loans hit a record low dating to 1984 of 2.52 percent during the week ending Dec. 20, 2012.