With Mortgage Rates, You Can’t Shop For Good Luck

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Posted on in Consumer Education

With Mortgage Rates, You Can’t Shop For Good Luck

After a series of increases starting April 30, mortgage rates finally took a dip Monday.  It was a welcome surprise for home buyers that went under contract over the weekend.  Same for homeowners looking to pull the refinance trigger. Versus mortgage rates on Friday afternoon, many lenders were already showing lower rates Monday morning before a late-afternoon rate sheet reprice even lower. The drop in rates lowered annual mortgage payments by roughly $180 per $100,000 borrowed. Rate dips like this aren’t expected, of course, bringing us to the one of the most important axioms of shopping for a mortgage rate: You can’t shop for good luck. This is because mortgage rates are inherently unpredictable.  On some days, rates are higher On some days, rates are lower On some days, rates are unchanged Occasionally, there are days when rates are all three. Monday’s rate dip, though — while sharp — may not last.  Early this morning, markets were pressuring mortgage rates to […]

by jberman
Posted on in Mortgage Rates

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 […]

by jberman
Posted on in Housing Market

Mortgage Rates Higher On April’s 539,000 Jobs Lost

The economy shed 539,000 jobs in April, raising the 6-month total to nearly 4 million jobs lost. And while the April data may look bad, it’s actually 10% better than what was expected. As a result, it’s turning into a bad day to be shopping for mortgage rates. After bottoming out early last week, conforming, 30-year fixed rate mortgages have risen in cost by as much as three-quarters of a percent. Today’s good-for-the-economy report may push costs higher still. Now, it may seem odd to categorize 539-thousand lost jobs as “good-for-the-economy”, but it’s important to remember that on Wall Street, expectations are everything.  Investors are constantly buying and selling securities based on what they think will happen in the future.  And, up until this morning, there was an expectation that 600-thousand jobs had been lost in April. As it turns out — relative — the actual job loss data wasn’t so bad. Now, markets are making adjustments and re-forming expectations of […]

by jberman
Posted on in Mortgage Rates

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. […]

by jberman
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