For the fourth consecutive month, the country’s foreclosure activity was dominated by a small number of states.

As reported by RealtyTrac.com, more than 50 percent of the country’s foreclosure-related actions in June concentrated in just 3 states:

1. California


2. Florida


3. Nevada

The states rounding out the Top 10 include Arizona, Georgia, Michigan, Texas, Ohio, Illinois and Colorado.

Meanwhile, June’s reported foreclosure figures are consistent with the data from earlier this year, suggesting that the foreclosure remedy plans put forth by the government and by lenders can barely keep pace with the national default rate.

Foreclosure-related actions nationwide are up 5 percent from May.

The silver lining in data this negative is that foreclosures are creating tremendous buying opportunities for the right buyers. Because foreclosed homes tend to sell at a discount versus non-foreclosed homes and because mortgage rates are low, home sales are showing strength in a multitude of markets because of ample supply at relatively cheap prices.

Distressed homes accounted for one-third of all existing home sales in May.

Search the complete June 2009 foreclosure report for yourself, including foreclosure heat maps and other trends on the RealtyTrac website.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Mortgage markets improved last week on fresh concerns about the U.S. economy.

With data showing neither overt strength nor weakness, and with earnings season about to start, traders got defensive with their money and parked it in bonds.

As a result, mortgage rates fell in mixed trading last week. It’s the third consecutive week in which rates fell.

This week, rates should be in flux with traders watching 3 things.

The first is the aforementioned Earnings Season reports.

Big Banks JP Morgan Chase, Bank of America and Citigroup report quarterly earnings this week. If balance sheets look healthy and markets are encouraged by the results, it could spark a stock market surge, similar to last quarter. This would be bad for mortgage rates.

The second item markets will be watching is economic data. In addition to inflation-related data like the Consumer Price Index, markets are watching for Tuesday’s Retail Sales report.

Retail sales are a key economic indicator because consumer spending accounts for two-thirds of the economy. If the data is weak, mortgage rates should benefit.

And, lastly, markets are awaiting the Wednesday release of last month’s Federal Open Market Committee meeting minutes.

The minutes will give a behind-the-scenes look at the conversation and debate surrounding the Fed’s decision to hold the Fed Funds Rate near 0.000 percent and not purchase additional treasury securities on the open market.

Mortgage rates remain volatile. Therefore, if you’re actively shopping for a mortgage rate, consider that mortgage rates have been falling for the past 3 weeks and may be due for a reversal. All it would take for that to happen is for this week’s economic data to show just a little bit of strength.

We could expect traders to pile back into stocks and mortgage rates to suffer.

Related posts:

1. July Mortgage Rates Explode Well just when we thought mortgage rates couldn’t go...
2. Jobs Numbers Expected to Be Good-What Does that Mean for Mortgage Rates? Some of the high points of today’s market update...

Related posts brought to you by Yet Another Related Posts Plugin.

For the first time in nearly six months, Fannie Mae is imposing strict, new guidelines on American homeowners.

This time, the hardest hit demographic is owners of 2-unit homes.

In its official announcement, Fannie Mae listed the following changes to its 2-unit financing programs, separated by occupancy type.

Primary Residence

• Purchase: Maximum loan-to-value drops to 80%; FICO minimums reset to 640.


• Rate-and-Term Refinance: Maximum loan-to-value drops to 80%; FICO minimums reset to 640.


• Cash Out Refinance: Maximum loan-to-value drops to 75%; FICO minimums reset to 680.

Investment Property

• Purchase: Maximum loan-to-value drops to 75%; FICO minimums reset to 660.


• Rate-and-Term Refinance: Maximum loan-to-value drops to 75%; FICO minimums reset to 660.


• Cash Out Refinance: Maximum loan-to-value drops to 70%; FICO minimums reset to 680.

With Fannie Mae’s new loan-to-value limits falling by as much as 15 percent, it’s a certainty that fewer 2-unit homeowners will be approved in the mortgage process. This could slow both purchase and refinance activity in the coming months.

The good news, though, is that while Fannie Mae recommends that lenders institute the new policy immediately, September 1, 2009, is the “effective date”.

Therefore, if you plan to buy a 2-unit home, or if you own one and know you’ll need to refinance it soon, it may be a good idea to move up your timeframe.

Lenders could implement the new guidelines at any time and usually do so without warning.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Last week’s jobs report is the latest data point to drag down rates for today’s home buyers and would-be refinancers.

As reported by the government, the national Unemployment Rate rose to 9.5 percent in June — a 25-year high.

As the percentage of out-of-work Americans grows, households have less disposable income to pump back into the economy.

And so, because consumer spending accounts for two-third of the economy, the growing ranks of the unemployed are forcing markets to change expectations about when the U.S. economy will reach its full recovery.

Inflation is the enemy of mortgage rates. The perceived absence of inflation, therefore, can be its friend.

With fewer working Americans, we can expect slower economic growth plus a smaller probability for inflation over the medium-term. This is why mortgage rates are lower of late, off by as much as a half-percent from the peak.

Related posts:

1. Mortgage Fraud Case Causes Rates to Fall Quickly ...

Related posts brought to you by Yet Another Related Posts Plugin.

Mortgage markets were relatively calm throughout last week’s holiday-shortened trading sessions.

After trading within a tight range between Monday and Wednesday, a weak jobs report helped edge rates lower into the weekend.

For the second week in a row, mortgage rates ended the week lower than where they started — if only slightly.

Meanwhile, if it’s the expectation of runaway economic growth that fueled the early-June, mortgage rate run-up past 6 percent, it’s the tempering of those expectations that helped rates retreat by a 1/2 percent or more since.

While the housing sector continues to post strong numbers, employment is showing that it may not rebound as quickly as previously thought and U.S. consumer confidence remains shaken.

The Unemployment Rate rose to its highest levels in 25 years last month and key confidence levels fell.

With negative job growth and falling consumer optimism, it only makes sense that mortgage rates would fall — fewer people are working and the public feels uneasy about spending its money.

This week — without much new data due — market momentum could push rates even lower. In general, perceived weakness in the economy will be good for mortgage rates and strength will be bad.

However, there’s a wildcard.

This week, some of the world’s largest nations are expected to call on a replacement for the U.S. dollar as a global currency reserve. Depending on how serious the discussion grows, the value of the U.S. dollar could be negatively impacted and that would spell bad news for rate shoppers.

A weakening U.S. dollar is linked to higher mortgage rates.

Mortgage rates remain favorable and unpredictable. If today’s rates make sense for your household budget, consider locking in. Rates won’t likely end the week at the same levels at which they started.

Related posts:

1. How to avoid paying 44K in interest Mortgage rates have taken a dramatic step for the better!...

Related posts brought to you by Yet Another Related Posts Plugin.

The number of homes under contract to sell increased in May.

It’s the fourth straight month in which sales volume increased, corroborating the growing notion that housing is on the mend in most U.S. markets.

Consider these other housing-related stories from the past month:

• Existing Home Sales are rising


• New home supplies are falling


• The Case-Shiller Index is turning positive-like

Put it all together and it looks like the housing market is about to reach its bottom (if it hasn’t already).

But just because homes are going under contract to sell doesn’t mean that they actually will sell. A “deal” can fall apart for all sorts of reasons including failed home inspections, buyer-seller disputes, and mortgage-related problems.

In general, though, as the number of pending contracts increase, we find that Existing Home Sales rise, too, some 45-60 days into the future. And so long as buyers’ demand for homes remains strong, we would expect that home prices edge higher.

It’s too soon to say that housing has turned the corner for certain, but there’s an awful lot of data lately that suggests that it has.

Related posts:

1. The Home Buyer’s Tax Credit Has Gone … What Comes Next? Are current mortgage rates an un-expected gift? Most experts predicted...

Related posts brought to you by Yet Another Related Posts Plugin.

Tuesday — for the first time in a long while — members of the press met the monthly Case-Shiller Index data with enthusiasm. And why shouldn’t they? 19 of the 20 measured markets showed a slowing pace of home price decline in April.

Here are some of the headlines about the story:

• Case-Shiller Home Prices Decline Only 18% (Business Week)


• Case-Shiller Less Bad (Seeking Alpha)


• Home Prices In 20 Cities Drop Less Than Expected (Bloomberg)

Now, the headlines feel negative, but they’re actually highlighting some key strengths in April’s figures. For example, nearly half of the Case-Shiller markets posted gains in April and all but one showed month-over-month improvement.

It’s a step in the right direction but doesn’t mean that housing has turned around for good.

We have to be careful about how we interpret the Case-Shiller Index because it’s an imperfect housing gauge. The most obvious Case-Shiller flaw is that it only measures home values in 20 cities nationwide and they’re not even the 20 biggest cities.

Houston, Philadelphia, San Antonio and San Jose are excluded from the report and each ranks among the country’s 10 most populous areas.

That said, the report is still important because the Case-Shiller Index identifies broader housing trends and that helps to shape economic policy.

Not only versus last month but also versus last year, the pace at which home values are falling appears to be getting slower. This is the third straight month Case-Shiller has reported as such.

Now, three months makes a trend, but the data has to stay strong through the summer months to mark a bona fide turnaround. If the Case-Shiller Index shows strength for May and June, it could be the signal for which the markets have been waiting.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

At the start of the year, the “experts” made a lot of predictions about the U.S. economy and what to expect in 2009.

• Some said housing would rise


• Some said housing would fall


• Some said mortgage rates would rise


• Some said mortgage rates would fall

And nobody predicted just how big the government’s stimulus package would be.

Now, on June 30, with the year officially half-over, it’s as good a time as any to remember that people are much better at interpreting the past than predicting the future. Economists can make educated guesses about the future, but they’re guesses nonetheless.

It’s like watching the Weather Channel. A meterologist can look at the data and say it’s going to rain next week, but the forecast is never 100%.

So far this year, mortgage rates have been up and down, credit availability has been higher and lower, and home prices have varied immensely from neighborhood to neighborhood. These are not the types of predictions we get from the pundits.

There’s another 6 months until 2010 and there’s no reason to expect the current trends to change.

The world is unpredictable and so is the U.S. economy. Therefore, consider making your personal finance decisions based on the information at hand today instead of on an educated guess about the future.

After all, the weatherman’s been wrong before.

Related posts:

1. The Home Buyer’s Tax Credit Has Gone … What Comes Next? Are current mortgage rates an un-expected gift? Most experts predicted...

Related posts brought to you by Yet Another Related Posts Plugin.

Mortgage markets improved last week on the heels of benign economic data and a non-inspired press release from the Federal Reserve.

Aside from trader momentum, 3 market-moving events helped set the pace last week:

1. Housing data hinted at strength


2. Jobless data showed softness


3. The Fed said growth appears on-track

The combination of the three created volatility that — for just the second time in the last 8 weeks — worked in favor of rate shoppers.

Mortgage rates changed a lot last week, but they trended lower overall.

Already, however, markets are looking ahead to this week’s holiday-shortened trading sessions. There is a ton of data to be released and as the week progresses, the ever-falling market volume could create some wide swings in mortgage rates.

The mystery is whether rates will be getting better or worse.

On Tuesday, markets will get Consumer Confidence and Case-Shiller Index data at 9:00 AM ET. The Case-Shiller Index is a home price measurement and it always gets a lot of press. Strength in either number should lead mortgage rates higher. Weakness should help rates ease.

Then, on Wednesday, Crude Inventories should take the spotlight. Normally, we don’t watch this data point too closely but with gas prices easing last week, rising oil supplies could mean even lower gas prices ahead. This is anti-inflation and a good sign for mortgage rates.

And lastly, on Thursday, the government releases June’s jobs report. This report is always a market-mover — good or bad. And with trading volume low by Thursday, mortgage rates should move more than “normal”.

Be ready to lock at a moment’s notice this week. Mortgage rates continue to be volatile and the holiday-shortened week won’t do anything to counter that. If you’re the nervous type, when you see a rate that fits your budget, consider locking it in.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

If you only saw the headlines this week, you may have missed another positive sign in the housing market.

According to the Census Bureau, the supply of newly-built homes for sale fell to 10.2 months in May, its lowest level in 10 months.

Unfortunately, the New Homes Sales story wasn’t positioned as a positively by the press. Instead, the most common headline on the data read “New Home Sales Dip 0.6%” with many journalists referring to the figures as “weak” or “disappointing”.

Only, that’s not completely true.

See, one of the nice elements of the monthly New Home Sales report is its footnote section in which the Census Bureau talks about statistical Margin of Error and that section tells us that if the Margin of Error is larger than the measurement itself, the report is useless.

And that’s exactly what happened in May.

New Home Sales were measured to have fallen by 0.6 percent but that data point was dwarfed by its 17.8 percent Margin of Error, The “headline data”, in other words, was just a guess.

The press reported it anyway.

Nonetheless, as it relates to the economy, falling home inventories are a positive. Having 10-plus months of homes on the market is still high historically, but a definite improvement over what we saw earlier this year.

So long as low mortgage rates and aggressive pricing persists from builders, we expect even less supply in the months ahead.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The Federal Open Market Committee voted to leave the Fed
Funds Rate
unchanged today within its target range of 0.000-0.250
percent.

The
Fed also reiterated its plan to support the mortgage market to the tune
of $1.5 trillion.

In its press release,
the FOMC noted that the U.S. economy is not slowing with the same speed
versus just two months ago and that financial markets, in general, are
improving.

These are two signs
that the country may be emerging from recession, if it hasn’t
already.

The news isn’t all good,
however. The Fed made a point to highlight the potential
hazards the nations faces on its path to economic
recovery:

• The prices of energy
  and commodities have been rising
• Job
  losses are still mounting
  nationally
• Businesses are reducing
  capital expenditures

Also in its statement, the Fed acknowledged a plan to
hold the
Fed Funds Rate near zero percent “for an extended period” and a
re-commitment to the U.S. Treasury and Mortgage Bond
markets.

Market reaction to the Fed’s press release has been
muted.

With no new stimulus and
no new “tools” to spur the economy unveiled, Wall Street is business as
usual. Mortgage rates are unchanged post-FOMC
today.

The FOMC’s next scheduled meeting is August 11-12,
2009.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The housing market got another dose of good news yesterday.

According to the National Association of REALTORS, the number of homes sold in May increased for the third straight month and the national housing supply fell by 5 months.

Furthermore, first-time home buyers are accounting for nearly one-third of the market activity.

But, before we declare a bottom in housing, it’s important that we remember the First Rule of Real Estate:

All Real Estate Is Local

National housing statistics like Existing Home Sales are painted with a very broad brush. They lump disparate locales such as San Francisco and Seattle into one sample set and don’t account for regional differences, let alone neighborhood ones.

Furthermore, getting down to a city-by-city, or even street-by-street basis, we can always find homes that are selling quickly and home that are languishing. Real estate is highly local and subject to countless influences.

That said, the national data isn’t completely useless. From the patterns, we can infer that low mortgage rates, ample home supply and available tax credits are providing a quantifiable boost to the broader real estate market.

And based on recent pending sales data, we can expect June and July’s Existing Home Sales figures to be similarly strong to May.

Therefore, if you’re in the market for a new home right now — or plan to be soon — be conscious of home inventory levels in your target neighborhoods. Fewer homes on the market usually means less ability for buyers to negotiate and that leads to higher sales prices.

Plus, the NAR is reporting buyer activity up 10 percent from last year.

The housing market may not be fully recovered in every housing market just yet, but in studying the data, a lot of the pieces appear to be falling into place.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Mortgage rates are suffering through another volatile week, causing problems for rate shoppers and home buyers.

After falling Monday and Tuesday, mortgage rates surged Wednesday and Thursday. The momentum higher appears to be carrying into the weekend, too.

There are several data-related reasons for the mortgage market’s spastic activity this week:

1. Unemployment claims fell


2. Leading Economic Indicators rose


3. Inflation readings are tame

But while each of the data points above fueled mortgage rate volatility, it’s not the data that’s making markets move the most. It’s the psychological impact of the data.

See, data tells us about the past. It measures and reports on what’s already happened. Unfortunately for rate shoppers, mortgage markets are not made on data from the past — they’re made on the expectations of what will happen next.

Mortgage rates reflect Wall Street’s opinion of the future.

In reading the papers and watching the news, you’ll notice ongoing debate about the U.S. economy. It’s unclear whether the recession is worsening or improving.

On one hand, data is weak and sub-optimal. On the other hand, the data is not nearly as weak as it was 6 months ago and, in some cases, it’s strong. To some, this is a signal that a recovery is already underway.

Or, it may just be a blip.

We can’t be certain in which direction the economy is headed and the same can be said for mortgage rates. Because sentiment is changing so often, though, it forces us to be on our toes.

The last few months have been marked by large mortgage rate swings across small windows of time. A rate that’s offered in the morning, for example, is rarely available in the afternoon. Therefore, do your rate shopping in a compressed period of time and be ready to lock your rate at a moment’s notice.

When markets move, they tend to move quickly.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

After being range-bound since the start of the year Housing Starts unexpectedly jumped in May, surprising analysts and Wall Street.

It’s the latest in a string of housing-related data that suggests a real estate recovery is already underway.

Housing Starts is an important statistic for a number of reasons, but to homebuyers and home sellers, its immediate impact is on home inventory.

Home values are based on supply and demand. When the demand for homes exceeds the supply, values tend to rise. Conversely, when supply exceeds demand, values tend to fall.

When Housing Starts increase as they did in May, therefore, unless there’s a corresponding increase in demand, home prices get pressured downward.

Lately, that off-setting demand appears to be present.

With home affordability near record-high levels, mortgage rates well below historical averages, and the first-time homebuyer tax credit in place, Existing Home Sales are up 16 percent on a “raw numbers” basis versus last month and home supplies are lower versus last year.

Rising Housing Starts can a double-edged sword to a recovering economy. It’s a strength signal that builders are more optimistic right now, but too much optimism can lead to a glut of unsold homes that pushes housing back to the brink.

So long as demand outpaces supply, however, inventories should reduce and values should move higher.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Americans are feeling better about their budgets right now, raising the possibility of a full economic recovery.

According to a University of Michigan and Reuters, Consumer Sentiment rose for the fifth straight month in June.

Consumer Sentiment is now at its highest levels since September 2008, the month in which Lehman Brothers failed, Fannie Mae and Freddie Mac were nationalized, and the global financial crisis is believed to have peaked.

Rising confidence levels are important to the economy — and to housing –because a confident consumer is more likely to make the big-ticket purchases that propel the economy forward.

This includes buying new homes.

That said, the Consumer Sentiment Survey has its flaws.

For one, the survey’s sample set includes just 500 families. This is hardly a cross-section of America. Secondly, when people feel better about their finances, it doesn’t always lead to additional consumer spending — it could lead to more saving.

What people say they’ll do and what they actually do can be two very different things, but if consumer spending does increase in the months ahead, expect home sales to benefit on the willingness of families to “take more chances” and expect mortgage rates to suffer on concerns for inflation.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The mortgage market roller coaster continues. Markets worsened badly in the early part of last week, before rallying into Friday’s close.

Overall, mortgage rates were slightly higher for the week even though — briefly — they rose to levels not seen since November 2008.

Last week marks the third week in a row and the sixth out of the last seven that mortgage rates increased.

It’s not all bad news for mortgage rate shoppers, however. The market’s surge higher appears to be slowing and its momentum may start to reverse.

See, mortgage rates don’t come from thin air. They’re based on the price of mortgage-backed bonds and, over the last few weeks, it seems as if nobody on Wall Street wanted anything to do with them. A massive sell-off that caused bond prices to plummet and mortgage rates to soar.

Freddie Mac says rates are up 3/4 percent in the last 3 weeks but loan officers will tell you that’s undercutting it. Conforming mortgage rates are up more than 1 percent since Memorial Day.

The biggest reason for the sell-off was that markets feared a runaway inflation scenario. The U.S. Treasury has assumed an unprecedented debt load this year and to repay it, markets expect the government to print more cash — an inflation-inducing scenario.

However, when a number of high-profile investors and a country said last week that their faith in the U.S. economy remains strong, markets viewed it as an endorsement of government-issued debt. It served as Thursday and Friday’s rate-dropping catalyst.

This week, mortgage rates will move on three points:

1. Data, including key inflation and housing reports


2. Rhetoric, including 5 Federal Reserve member speeches


3. Momentum, including technical trading patterns

It’s unclear whether these factors will lead rates higher or lower, but one thing has been clear lately — when mortgage rates change, they change quickly.

Therefore, if you’re shopping for a rate and find one that fits your budget, consider locking in right away. With rates changing every few hours, it’s likely that if you wait too long, the rate will be gone.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Since Memorial Day, conforming mortgage rates have jumped by more than 1.125 percent, adding thousands of dollars to the annual cost of homeownership.

To the casual observer, the moves may seem random. There’s a reason this is happening, however.

It starts with inflation.

As an economic force, inflation erodes the value of the U.S. Dollar. Left unchecked, it drives up the Cost of Living as each dollar “buys less” at the supermarket, gas station, or anywhere else.

But with respect to mortgage rates, inflation’s impact is more immediate. Because inflation devalues the dollar over the long-term, it renders long-term mortgage bonds a less attractive investment for traders.

If bond investors are repaid in U.S. Dollars, after all, it would make the investment worth less if the dollar is in an inflationary freefall.

Therefore, in situations when inflation is likely to present, we find that traders often sell out of their mortgage bond positions which, in turn, drives down the bond prices. Then, because bond yields move in the opposite direction of bond prices, rising rates are the inevitable result.

Lately, Wall Street is fearing inflation for a number of reasons:

1. Job losses are slowing, adding to consumer spending expectations


2. Gas prices have risen 41 days in a row


3. The federal government is increasing the money supply

These 3 factors — plus a few others — are all coming to a head around the same time and traders are getting defensive with their portfolios. As a result, they’re selling their mortgage bond positions and it’s driving mortgage rates higher.

Rates may continue to trek toward 7 percent through July and August, or they may retreat toward 5 percent. We can’t know for sure. What we can know, though, is that volatility in rates should continue until the economic picture gets more clear. That could be next week, or next year.

For now, be ready to lock at a moment’s notice. Mortgage rates are changing quickly.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The economy posted stronger-than-expected data last week, reigniting fears of inflation on Wall Street.

The positive-slanted economic news caused conforming mortgage rates to rise by another 1/2 percent last week.

It marked the second week in a row of soaring mortgage rates and the fifth week out of six that rates have moved higher.

Conforming mortgage rates are now as high as they’ve been all year and rest at the levels of December 2008.

The biggest news of last week is likely to influence mortgage rates this week, too.

On Friday, we learned that 345,000 Americans lost their jobs in May. And while that’s an awfully large number, it wasn’t nearly as bad as Wall Street had expected. Furthermore, the Unemployment Rate spiked to over 9 percent.

Now, again, with respect to the Unemployment Rate, the number looks bad, but the data may be a positive. This is because the Unemployment Rate measures Americans in the workforce versus the unemployed actively looking for jobs.

If the number of people trying to re-enter the workforce starts to surge, it’s basic math that Unemployment Rates will rise. This is what some economists think happened last month and it served as the backdrop for Friday’s rate surge.

With fewer Americans expected to be out of work, consumer spending seems poised to rebound in the months ahead, pushing the economy out of recession sooner than expected. If the sentiment holds this week, mortgage rates should rise even more.

Without much new data this week, markets are likely to trade on emotion — a difficult situation for rate shoppers. Conforming mortgage rates have been extremely volatile since May and are changing every few hours. If you see a rate you like, consider locking it.

Wait around too long, and it’ll be gone.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The surprise surge in pricing started shortly after 1:00 P.M. ET, then continued all the way until the market’s closing. It was the sharpest one-day surge in mortgage rates in recent history. Perhaps ever.

For mortgage rate shoppers swept up in the surge, monthly payments are now higher by $29 per $100,000 borrowed.

That’s a significant shift.

For as rare as Wednesday’s events were, though, middle-of-the-day, 0.625 percent rate changes don’t just happen. Yesterday, the action was the result of a confluence of factors, including:

• Rising oil prices and gas prices
• Optimistic predictions about the end of the recession
• Concerns over the U.S. total debt load
• Fears of inflation

In addition, momentum trading played a role.

As markets worsened, selling begat more selling, amplifying Wall Street’s total losses. As mortgage bond prices fell, mortgage rates went up. By a lot.

Mortgage markets are notoriously fickle and yesterday’s events proved it. Days like Wednesday are precisely why insiders recommend shopping for mortgage rates in a compressed timeframe. The faster you finish, the lower the risk of losing low interest rates to new market conditions.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Rates go up, rates go down. Catch them while you can.

After Wednesday’s mortgage market rally drove rates down by a bunch, Thursday’s sell-off pushed them right back up.

This has been a common pattern in the skittish world of mortgage rates this year.

With the U.S. economy still teetering between recession and growth, markets are looking for signals anywhere it can find them. Thursday’s clue came from a government report showing that more Americans are collecting unemployment benefits than at any point in history.

Strangely, mortgage rates rose on the news.

We call it “strange” because weak economic data has tended to draw mortgage rates lower lately to the benefit of prospective home buyers and would-be refinancers. Lower rates make homes more affordable.

Thursday, though, the pattern broke.

The main reason why mortgage rates rose Thursday isn’t because of the employment report or any other piece of data. Rates rose Thursday for the same reason that they had dropped the day prior — the Federal Reserve.

On Wednesday, the released minutes from the Fed’s last meeting suggested that the group might make a larger mortgage market intervention. On Thursday, in the face of worsening jobs data, markets bet the Fed wouldn’t.

Mortgage rate shoppers, unfortunately, got caught in the crosshairs.

Rates can — and do — change quickly, without warning. And, thus far this year, the changes have been extra sudden. This is one reason why it’s often prudent to lock a mortgage rate as soon as you find one that’s agreeable. Wait too long, and it could be gone.

Expect more volatility today with traders leaving early for Memorial Day Weekend. Less volume means more chances for rates to change.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.