mortgage bonds

Why Bad News For Stocks Can Be Good News For Mortgage Rates

August 1, 2007

Money leaving the stock market helped mortgage rates move lower yesterday.  As the Dow swung from a 140-point gain to a 140-point loss in a matter of hours, dollars were looking for a place to “park”. Mortgage bonds were one beneficiary. When investors sell stocks in a portfolio, they don’t always want to keep the […]

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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” […]

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Which Way Will They Go? Inflation Up, Growth Down, Or Both?

June 28, 2007

The Federal Open Market Committee adjourns from a two-day meeting today and so this is a good time to remind yourself: The Fed does not control mortgage rates. Rather, the Fed sets the Federal Funds Rate. And the FFR is, in turn, used to determine Prime Rate. Prime Rate, in turn, is used to determine […]

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The Fed Starts Its Two-Day Meeting

June 27, 2007

The mortgage markets officially enter “Wait-and-See” mode beginning today as the Federal Open Market Committee begins their two-day meeting. The importance of the FOMC’s meeting to mortgage markets is all in the words of the committee as opposed to their actions (or lack thereof). After all, the group has not “done anything” in a year […]

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The Week In Review (June 25, 2007) : What To Watch For

June 25, 2007

For the first week in a long while, mortgage rates ended the week better than how they started. As we talked about last week, when there are no major data releases, the markets tend to move on momentum and psychology.  That’s precisely what pushed mortgage rates lower over the past five days. This week, though, […]

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In The Summer, Mortgage Rates Can Change More Swiftly Than Usual

June 20, 2007

It was another favorable day for mortgage rates yesterday as average housing data and momentum trading carried bond prices higher. Bond prices up, mortgage rates down, of course. All things considered, mortgage bonds should not have moved as much as they did.  But, this is the summer season and in the summer, fewer traders show […]

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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 […]

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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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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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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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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 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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Until Bonds Get More Press, You’re Going To Have To Find An Advisor You Trust

April 13, 2007

Unlike the stock market, it’s hard for the average person to know when the bond market is getting turned upside-down. So, looking back at last Friday, when mortgage rates jumped very, very quickly in a short period of time, a lot of people got surprised (and burned). With stocks, we can all turn on CNBC, Bloomberg, […]

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Markets Turned Quickly And Left Rate Shoppers In Their Wake

April 12, 2007

So, just how quickly have the markets turned? According to Fed Futures Trading as watched by the Cleveland Federal Reserve, on March 13, it was as likely that the August Fed Funds Rate level would be 5.250% as it would be 5.000%. In other words, markets were betting with equal odds that the Fed would […]

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Good Friday + Jobs Report Data = Major Mortgage Rates Movement

April 6, 2007

Today’s mortgage rates are getting slammed on the heels of the Non-Farm Payrolls report.  Instead of hitting the consensus estimate figure of 135,000 jobs, the report showed a very large 180,000 new jobs created in March. Unemployment levels dropped to 4.4% pointing to underlying strength in the economy. Mortgage bonds are selling off right now […]

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Has “Housing Stability” Become a “Housing Rebound”?

January 26, 2007

Mortgage bonds continue their slide after yesterday’s outright hysteria. Today’s New Homes Sales showed a 4.8% jump in December to an annualized pace of 1.12 million homes.  This is about 14% higher than July’s pace and some economists are wondering if “housing stability” just turned into “housing rebound”. Home supply plummeted from 7.2 months to […]

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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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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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