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The Irrelevance of The University of Michigan Consumer Sentiment Survey

January 19, 2007

Today’s University of Michigan Consumer Sentiment survey showed that Americans are feeling terrific about the state of the economy.  The index jumped to 98.0 in January from last month’s 91.7 level. On a broader level, this is not an important piece of data for mortgage markets.  The idea is that a more confident consumer will […]

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The Housing Engine That Won’t Slow Down

January 18, 2007

Housing Starts handily beat economists’ expectations this morning and CPI showed strength, too, sustaining the market momentum that has trended mortgage rates higher over the last 30 days. The Federal Open Market Committee has repeatedly told us that it expects the economy to slow down in 2007, led by a weakening housing market.  And yet, […]

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Why PPI Exceeded Expectations And Nobody Minded

January 17, 2007

With all signs pointing towards economic growth, markets were not all surprised when today’s Producer Price Index registered higher than expected.  Mortgage markets are flat in response to the data. The impact of PPI is muted for three other major reasons, too: At 2.0%, the year-over-year increase in PPI is much lower than it has […]

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How Cold Weather Can Slow Down the Economy

January 16, 2007

As a big chill settles in over the country, oil prices continue their decline and are now down 15% since mid-July.  High oil prices are typically associated with inflation, but given the precarious balance of the U.S. economy, low oil prices may lead to inflation, too. Americans fuel the economy by spending money on goods […]

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The Week In Review (January 15, 2007) : What To Watch For

January 15, 2007

In a week practically devoid of economic news, mortgage rates trended higher last week amid falling oil prices and surprise strength in Holiday Season spending. Investors are jittery about the U.S. economy.  Since it stopped raising the Fed Funds Rate this past summer, the Federal Reserve has repeatedly told markets that it is expecting an […]

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It Was “Happy Holidays” for Retailers in December

January 12, 2007

For all of the talk about the slowdown in consumer spending, it appears that this Holiday Season was a winner.  This morning’s Retail Sales report doubled economists’ expectations by showing 1.0% growth. This is just one more inflationary pressure in the economy and makes it less likely that the Fed will lower the Fed Funds […]

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How the Unexpected Bank of England Rate Hike Can Impact U.S. Mortgage Rates

January 11, 2007

In a “surprise” move, The Bank of England raised its benchmark by 0.25% to 5.250%. Only one of 50 economists surveyed had predicted the increase and its unexpected nature played a key role in moving mortgage rates higher today on this side of the pond. The Bank of England is equivalent to our own Federal […]

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Once Bitten, Twice Shy: ADP Says Jobs Were Lost in December

January 10, 2007

After last week’s data showed ongoing strength in the U.S. economy, there is a growing sentiment that the Fed will choose to raise the Fed Funds Rate before it begins lowering it. FFR currently stands at 5.250% and here is what markets are predicting over the near-term: After January 30-31 Meeting: Decrease to 4.750: 0% […]

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How Will Oil’s Plunging Prices Impact Mortgage Rates

January 9, 2007

This summer, oil crossed the $77 threshold per barrel and since then, it has been on a steady decline. Today, it crossed $58 per barrel. Lower prices for oil should reduce heating bills and gas pump receipts for Americans this winter. High oil prices are a stimulus for inflation so on the surface this would […]

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How Inverted Yield Curves Defy “Normal” Financial Behavior

January 8, 2007

Interest rates remain inverted, a market condition in which the longer you commit to lending your money, the less that you earn on your investment. Why is that a big deal? Imagine if a friend asked you to borrow money for two years you charged him interest on that money. We can list some of […]

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How Today’s Jobs Report Surprised Traders

January 5, 2007

This morning’s Non-Farm Payrolls report (i.e. the number of new jobs created for industries other than farming) registered a 167,000 gain in November This is tremendously higher than the 115,000 jobs economists had predicted. Markets were caught leaning in the wrong direction after an ADP report released Wednesday said that 40,000 jobs were likely lost […]

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Once Bitten, Twice Shy: ADP Says Jobs Were Lost in December

January 4, 2007

This summer, economists were predicting that 175,000 new jobs were created in June and then payroll processor ADP shared their own estimate of 368,000 with the markets. In a panic, mortgage rates moved higher because – well, what if ADP was right?!? The actual figure turned out to be 121,000. That major miss jolted the […]

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Sub-Prime Lenders Eliminate Loans To Riskiest Borrowers

January 3, 2007

Washington Mutual-owned Long Beach Mortgage announced yesterday that its underwriting guidelines are changing, effective Monday, January 8. Following the lead of a host of other sub-prime lenders including large-players Fremont and New Century, Long Beach is hoping to avoid the fate of sub-prime lenders Ownit, Sebring Capital, and Mortgage Lenders Network. All three closed their […]

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Markets Closed in Observance of President Ford’s Death

January 2, 2007

In observance of President Ford’s death, the NYSE, NASDAQ and the Federal Reserve Board are closed today. This marks the first time that markets are closed for four consecutive days since the days following the attacks on September 11, 2001. Despite the closures, the Federal Reserve’s regional banks will continue to operate as usual so […]

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Vacation Days Are Good – Unless You’re The One Left Behind

December 29, 2006

As we head into the last day of trading in 2006, there are a lot of market players that have already left for the long weekend. That’s good for them, but rough for everyone else left behind. With so many traders on vacation this week, there are fewer buyers and fewer sellers at any given […]

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New Homes Sales Is Less Important Than New Homes Closed

December 28, 2006

Yesterday’s New Home Sales report revealed the following signs of immense strength in the housing sector and mortgage rates are moving higher on the news. Sales registered 1.047 million versus the expectation of 1.015 million — a difference of 3.15%. Sales were revised higher by 46,000 over the past three months. Inventory levels dropped to […]

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Principal Payback On Long-Term Loans

December 27, 2006

Did you know: After 30 years, a 30-year mortgage term is paid in full. After 30 years, a 40-year mortgage term has 57% of the original borrowed amount remaining. After 30 years, a 50-year mortgage term has 81% of the original borrowed amount remaining. Of course, it’s not all bad for the holders of longer-term […]

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It’s Not The House That Matters, It’s The Stuff You Buy For The House That Does

December 26, 2006

With many traders on vacation this week, the impact of economic reports on mortgage rates will be amplified. Specifically, be wary of this week’s New Home Sales and Existing Homes Sales reports. Since July, the Fed has repeatedly told us that housing will lead to an economic slowdown. As a result, markets have placed housing […]

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Thank you for your Request!

December 2, 2005

Your E-Book should be on it’s way to your email address. Please be sure to check your spam folder as it may very well have gone in there. The title of the email should be “Your Homebuyer Handbook” ENJOY! Steve Heideman President United Mortgage Financial Group

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