consumer

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

September 4, 2007

Federal Reserve Chairman Ben Bernanke took the pulpit Friday in Jackson Hole but his remarks made little impact on mortgage bond trading. The Fed is aware of economic issues related to housing and mortgage debt, Bernanke said. He implied that the Fed wants more evidence that inflation has slowed before taking more drastic measures to help […]

Read the full article →

How Credit Cards May Be Replacing Home Equity As A Funding Source

August 29, 2007

As mortgage guidelines loosened between 2002 and 2006, homeowners often used their home equity to retire credit card and other consumer debt.  They did this by increasing the size of the mortgage and taking “cash out” from their home. As you’d expect, this type of mortgage transaction is called a “cash out” refinance. Well, now […]

Read the full article →

The Week In Review (August 27, 2007) : What To Watch For

August 27, 2007

This week is data-heavy so markets will finally get to focus on fundamentals instead of fear. For the past two weeks, uncertainty about the economy has led to psychologically-driven mortgage interest rate movements. Rising defaults devalue mortgage holdings and many investors are now expecting the defaults levels to rise even more. When defaults exceed expectations, […]

Read the full article →

The Fed Funds Rate Does Not Directly Impact Mortgage Rates

August 14, 2007

It’s been on the news a few times lately, so let’s address a key misconception about the Fed and its relationship to mortgage rates. The markets now anticipate that the Fed will lower the Fed Funds Rate within the next 45 days.  As a mortgage rate shopper, there’s not much reason to be interested.  That’s […]

Read the full article →

The Week In Review (August 13, 2007) : What To Watch For

August 13, 2007

After all the volatility and talk of a global crumble, all of the major U.S. stock indices posts gains last week.  It just goes to show you what a strange roller coaster ride we’re all on. Last week, the market bounced its way through: The Fed’s press release stating that inflation is still a concern […]

Read the full article →

How Ben Bernanke’s Testimony To Congress Is Moving Mortgage Rates

July 18, 2007

Despite lower prices at the gas pump, the Consumer Price Index increased a little bit more than expected in June. According to the Bureau of Labor Statistics, CPI rose 0.2% versus the 0.1% expected by economists CPI tries to answer the question “How expensive is everyday life?”.  Over the last 12 months, says the government, “life” […]

Read the full article →

When Everyone Spends A Little Less, We All Save A Little More

July 13, 2007

Weakness in Retail Sales data this morning is causing a knee-jerk reaction in trading circles, edging mortgage rates lower this morning. Against expectations of a flat reading, retailers reported a 0.9% decrease in sales volume in June.  This is the largest reported drop in two years. As we’ve discussed before, though, when looking at data […]

Read the full article →

Do 500 People Speak For The Whole Country?

July 12, 2007

On the week, mortgage rates are slightly improved as traders keep a watchful eye on tomorrow’s Retail Sales report. Largely, markets want to know how Americans are using their disposable income.  Are they buying big-ticket items like automobiles?  Are they buying luxury items?  Are they buying appliances and home goods? Retail Sales is released at […]

Read the full article →

The Changing Opinion of How Rising Gas Prices Affects Consumers

July 10, 2007

Crude oil prices have been increasing lately and that tends to lead to higher gas prices at the pump. The heat map at right is courtesy of GasBuddy.com, a Web site that tracks gas prices on a national, state, county, city and hyper-local basis. According to GasBuddy.com, gasoline prices are beginning to rise after 7 […]

Read the full article →

How To Protect Yourself From Becoming A “Trigger Lead”

June 26, 2007

From the CBS News Video Web site, an interesting story for anyone who’s recently applied for credit. Credit repositories now sell the contact information of people applying for new mortgage loans to other mortgage lenders that want to compete for the business. Called “trigger leads”, an unsuspecting mortgage applicant can have his credit checked by a […]

Read the full article →

The Week In Review (June 18, 2007) : What To Watch For

June 18, 2007

After a tame Consumer Price Index report Friday, mortgage bonds staged a brief rally and rates retreated slightly. Earlier in the week, mortgage rates were at their highest point in almost a year. Unfortunately for rate shoppers, mortgage investors are behaving like Dr. Jekyll and Mr. Hyde right now.  One moment, they hate the outlook […]

Read the full article →

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 […]

Read the full article →

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 […]

Read the full article →

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, […]

Read the full article →

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 […]

Read the full article →

The Week In Review (May 14, 2007) : What To Watch For

May 14, 2007

Last week in the mortgage markets was thick with hype and thin with action. Whenever the Fed meets, there is potential for wild swings in mortgage rates.  And, although the Fed doesn’t control mortgage rates, it’s views on inflation and the economy carry tremendous weight with traders, with economists, with banks, and with governments across […]

Read the full article →

As Expected, Housing Drags Down Retail Sales

May 11, 2007

When consumer spending slips, it can send shockwaves through the economy.  Consumer spending, after all, makes up 70% of the economy. The best measure of consumer spending data is Retail Sales, a monthly figure describing how much money Americans are spending, and where they’re spending it. Retail Sales unexpectedly fell in April and that would […]

Read the full article →

Today Is FOMC Day : What Will They Do/Say?

May 9, 2007

The Federal Open Market Committee meets today and markets will be hanging on their every word. There is virtually no chance that the Fed will change the Fed Funds Rate from its current 5.250% level, so its the Fed’s press release that will get all of the attention. We’ll disect the message in tomorrow’s blog […]

Read the full article →

The Week In Review (May 7, 2007) : What To Watch For

May 7, 2007

Data painted a dismal picture for the economy last week including tempering inflation readings, slowing job growth, depressed home sale data, and ever-higher gasoline prices.  This gave markets hope that the Fed may start to ease up on the Fed Funds Rate. But, while the stock market rallied on the news, the bond market continued […]

Read the full article →

Jobs Report Is The 800 Pound Gorilla In The Room

May 1, 2007

There’s a palpable uneasiness in mortgage markets right now and Friday’s payroll report looms large. Remember: it’s not the actual data that matters — it’s how close the data is to its expected levels. All week, traders have been jockeying for position based on a projected 100,000 new jobs created and if the number is […]

Read the full article →

← Previous Entries

Next Entries →