Ben Bernanke Leaves Clues About The Future Of Mortgage Rates

Ben Bernanke Leaves Clues About The Future Of Mortgage Rates

On the 1-year anniversary of the Lehman Brothers collapse, Fed Chairman Ben Bernanke said Tuesday that the “recession is very likely over at this point”.   His comments were supported by a Retail Sales report for August that was much better-than-expected. Equities improved on the day, mortgage markets worsened, and home affordability suffered.  The days of ultra-low mortgage rates may be coming to an end. Since last September, mortgage bonds markets have been in Rally Mode.  As the Financial Crisis of 2008 worsened, investors fled the relatively risky world of stocks and moved dollars into safer investments like cash and bonds — including the mortgage-backed kind. Risk aversion is common when market uncertainty exists but last year’s aversion was so strong that, by late-November, it had forced mortgage rates down to an all-time low.  Since November, however, rates have been on the rise.  Stronger economic data and a general feeling of optimism have helped stock markets recover and some of those gains are coming at […]

What’s Ahead For Mortgage Rates This Week : September 8, 2009

Mortgage markets improved slightly last week overall, but closed out the week much worse from the best levels of the week. On Wednesday, briefly, mortgage rates touched an 8-week low.  Following that, mortgage rates began to climb and stayed on an upward trajectory clear through Friday’s closing. Rate shoppers suffered, realizing a 0.250 percent rise in rates — roughly $32 per month per $200,000 borrowed. The biggest story of last week was the U.S. jobs report.  It showed the Unemployment Rate climbing to 9.7 percent and a loss of 216,000 jobs nationwide.  Neither figure was a surprise, per se, but Wall Street had visions of a stronger showing.  Investors want to see strength in housing and employment and, for now, they’re only getting the former.  And so long as the U.S. economic future is unclear, mortgage rates will remain unpredictable. This week, there isn’t much news, but there are some stories to keep an eye on: The Fed’s regional economic summary releases Wednesday. Strength […]

How The “Fed Minutes” Can Change Mortgage Rates And Home Affordability

Mortgage rates fell after the Federal Reserve released its April 28-29, 2009 meeting’s internal notes Wednesday. Officially known as “Fed Minutes”, the report is an in-depth account Federal Reserve’s last get-together, detailing the discussions and decisions that create our country’s monetary policy.  It’s the lengthy companion to the Federal Reserve’s brief, post-meeting press release. For comparison’s sake, the Federal Reserve’s April 29 announcement contained 383 words.  The minutes of that same meeting held 5,754 words.  The extra words offer extra details about what the next monetary steps might be for the nation’s policymakers.  This is a big deal to markets because investors are always looking for clues about what’s next — especially considering how the April Fed Minutes showed that group discussed increasing its $1.25 trillion mortgage market commitment to something bigger. Remember that the Fed’s mortgage-buying program is largely credited with keeping mortgage rates low this year.  If there’s more buying ahead, that should help rates stay similarly low.  Mortgage rates fell […]

What’s Ahead For Mortgage Rates This Week : May 11, 2009

Mortgage markets hit their worst levels since March last week, sending mortgage rates higher for the second week in a row. Today’s conforming mortgage rates are much higher than from the registered low point of April 30, 2009. There are a few reasons why mortgage rates were up last week.  Stress test results weren’t as bad as originally feared The pace of job loss appears to be slowing The Dow Jones Industrial Average gained another 4 percent Separately, bullet points like these can move markets and change rates.  Together, though, they’re a force.  The combination of events reinforces Wall Street’s belief that the U.S. economy is on the mend. Even Fed Chairman Ben Bernanke remarked in his testimony to Congress that the economy should “turn up later this year”. As a result, this week, markets will be tuned in to inflation-related data. Oil prices have been rising steadily since January and are up roughly 30 percent year-to-date.  Because of this, Thursday and […]

Your Local Gas Station May Have Clues About Tomorrow’s Mortgage Rates

The retail price of gasoline is rising nationwide, now up 30 percent since the New Year. It’s a similar run-up to what we’ve seen for retail gas prices in each of the last 5 Spring Seasons. For people trying to time the mortgage market’s bottom, clues about the future of mortgage rates may be at the local gas station. Rising gas prices are indicative of the rising cost of energy and, indeed, crude oil is closing in on its 2009 highpoint.  As these energy costs grow, so do inflationary pressures on the U.S. economy. Inflation, of course, is awful for mortgage rates. When it’s present, mortgage markets deteriorate and rates tend to rise — often sharply and with little advance warning. So, for today’s homebuyers-in-process and would-be refinancers, prices at the pump may foreshadow bad news for the future of housing affordability.  Even a modest, quarter-percent increase would have a palpable effect on payments, adding $372 in annual costs to a $200,000 home loan. […]