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What Role Do You Play In This Rising Mortgage Rate Environment?

June 13, 2007

The American Consumer keeps spending. This morning, the monthly Retail Sales report showed a larger-than-expected jump.  Even after stripping out elevated gas prices, the sales increase was more than double the expected amount. The economy surges ahead, fueled by everyday spending, and this does not bode well for the future of mortgage rates. The recent […]

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Proof That Mortgage Bonds Are A Global Market

June 12, 2007

If you ever wanted proof that mortgage rates react to global events, the past four days are it. Worldwide, investors are shunning the United States mortgage market in search of higher returns elsewhere. The more they sell, the worse mortgage rates get. The latest catalyst for extra supply: speculation about a Bank of Japan interest […]

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The Week In Review (June 11, 2007) : What To Watch For

June 11, 2007

After a semi-calm start, last week ended terribly for mortgage rate shoppers highlighted (lowlighted?) by Thursday’s mortgage bond market crash. The drubbing Thursday was the worst day for the bond market in three years and is one of the reasons why the conforming and jumbo 30-year fixed mortgage is up 0.625% since late-April. Conforming and […]

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When Mortgage Rates Snowball Higher And It Becomes An Avalanche

June 8, 2007

Yesterday was the single worst day for mortgage rates in more than four years. Because so few homeowners understand how mortgage rates are determined, a day like yesterday may have little context. So, let’s try to put it in perspective. If somebody told you that the stock market crashed, you’d understand.  A stock market crash […]

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All Real Estate Is Local, Or Why National News Programs Are Misleading

June 7, 2007

This is just a quick reminder to ignore national news stories about real estate.  It may sound like strange advice, but real estate is a highly local phenomenon. The “national scene” is comprised of data from: 50 states, with More than 30,000 incorporated cities, and with An innumerable number of neighborhoods It also combines data […]

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The Five Words Spoken By Ben Bernanke That Rattled Mortgage Markets

June 6, 2007

Behold the power of the English language. With just five words, Federal Reserve Chairman Ben Bernanke rattled markets yesterday. In discussing how housing has slumped (and may continue to slump), Bernanke cited that weakness in the sector should not hold the rest of the economy back. This is departure from earlier this year.  In Q1, […]

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So, How Much Is Starbucks Costing You Each Year?

June 5, 2007

Have you ever wondered how much your coffee habit is costing you? Courtesy of software developer Hugh Chou, use the Coffee Calculator to calculate how much you pay for coffee each year, and how much money you forgo in savings because of it. Did you know:  If you buy a $1.87 grande drip coffee from Starbucks every […]

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The Week In Review (June 4, 2007) : What To Watch For

June 4, 2007

Another week, another vicious rise in mortgage rates.  There just wasn’t enough “bad” news to reverse the market’s recent trend to the upside. There were three notable pieces of news from last week: The Fed’s May meeting minutes revealed a genuine concern that inflation is not slowing as anticipated The employment report showed that employers […]

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How Expectations For The Future Impact Mortgage Rates Today

June 1, 2007

Mortgage rates will not get a helping hand from the bevy of data released this morning. As markets anticipated, headline data supports the notion that the Fed will raise the Fed Funds Rate from its current 5.250% level before it lowering it. This is completely opposite from what we were seeing just two months ago. […]

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Federal Reserve: Inflation Remains “Uncomfortably High”

May 31, 2007

Tomorrow, the fireworks begin.  Or, continue, depending on your point of view. After a span of several weeks in which mortgage rates have steadily increased, markets are gearing up for a heavy day of data that could confirm the worst fears of investors everywhere: the U.S. economy is not slowing down. The Fed’s May meeting […]

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Are You Eligible To Get Rid Of Your PMI Payments?

May 30, 2007

If you’re currently paying Private Mortgage Insurance (PMI) and have been for several years, it may be time to petition your lender to have the PMI payment removed. Waiting for it to drop off “automatically” may mean you will be stuck with the higher payments for at least five to ten years from your original […]

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The Week In Review (May 29, 2007) : What To Watch For

May 29, 2007

Mortgage rates continued their climb higher last week as markets dealt with contradictory data about the health of the housing and the economy. New Home Sales registered its biggest gain in 14 years while Existing Home Sales reached a 4-year low; and purchases of “big-ticket” items such as computers, appliances and furniture unexpectedly jumped while […]

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Saving A Nickel May Have Cost You A Dime

May 25, 2007

This cartoon by Wiley applies to mortgages in 2007 like it did to stock trading in 1999. The least expensive mortgage options aren’t always the least costly.  A quick look at the Sunday paper’s Foreclosure Notice section can verify that. The right loan at a fair price saves far money money than the wrong loan […]

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Why You Should Re-Pre-Qualify Yourself Today

May 24, 2007

If you’re in the process of buying a home and are working without a rate lock, take notice:  over the past two weeks, mortgage rates have spiked to their highest levels since November 2006. Your actual mortgage payment will be higher than you originally anticipated. Depending on your preferred mortgage product, rates have increased by as […]

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One Method To Reduce The Amount Of Sub-Prime ARM Foreclosures

May 23, 2007

The graphic at right comes from The Wall Street Journal and it illustrates something that we all intrinsically know: Sub-Prime ARMs foreclose at a faster pace than all other home loan types. When adjustable rate mortgages reach the end of their “fixed rate” period, some homeowners are unprepared for the upward-adjusting mortgage payments and that […]

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How Lenders Protect Against Losses When Mortgage Markets Deteriorate

May 23, 2007

The graph at right shows the path of mortgage rates in May.  The rate run-up continued yesterday. After a fairly tame start, yesterday’s action rapidly slipped away from mortgage rate shoppers beginning at 12:00 P.M. ET. Many lenders responded by invoking their right to a mid-day reprice as well, with some adding as much as 0.25% […]

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The Week In Review (May 21, 2007) : What To Watch For

May 21, 2007

Mortgage rates moved substantially higher last week as traders reacted to Thursday’s Initial Jobless Claims. The amount of new unemployment filing dropped below 4-week trend line is now at its lowest levels in a year. Fewer unemployment claims coupled with increasing employee wages raised fears of inflation and inflation nearly always pushes mortgage rates higher. […]

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How “Repair Credits” To The Buyer Can Sabotage Your Home Sale

May 18, 2007

When buyers and sellers look for common negotiating grounds, it’s common for the buyer to request home improvements to be made prior to the sale. The request may be phrased in any number of ways: “The hardwood floors are warped and we think the seller should pay for it.” “There is a leak in the […]

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How Psychological Factors Are Pushing Mortgage Rates Higher

May 17, 2007

Mortgage rates have held in a very tight range over the past few months, but little by little, they are inching higher. Mortgage rates are not picked from thin air.  Just like stock prices, they are based on facts, opinions, and psychology. There is a lot of news and data to interpret but, for the […]

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Hot Housing Starts Figure May Push Mortgage Rates Higher

May 16, 2007

Each month, the Commerce Department releases a statistic titled “Housing Starts” that measures residential construction activity. This morning, the Commerce Department released April’s Housing Starts data (PDF) and the headline data reflected a 2.5% (±9.3%) increase in new construction. Markets had anticipated a 0.8% decrease.  This coincided with a decrease in available homes, as shown […]

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