rate

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 […]

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How Revisions To Previously-Released Data Are Pushing Mortgage Rates Higher Today

July 6, 2007

On a stronger-than-expected jobs report and upward revisions to April and May’s figures, mortgage rates are moving higher this morning. Against an expectation of 120,000, the Bureau of Labor and Statistics reported that 132,000 new jobs were created in June.  This not a huge deal in and of itself. It’s the revisions that are causing […]

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Three Reasons Why Mortgage Rates Are Higher This Morning

July 5, 2007

Mortgage markets are making like last night’s fireworks, exploding in the sky with a bang. There are three main factors pushing rates higher today: Bank of England raised their interest rates by 0.25% and foreshadowed future increases European Central Bank Chairman Jean-Claude Trichet said that inflation is “likely to rise again significantly towards the end […]

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The Week In Review (July 2, 2007) : What To Watch For

July 2, 2007

As expected, Ben Bernanke & Co. left the Fed Funds Rate unchanged at 5.250% last week but that didn’t stop markets from improving slightly overall. Markets were buoyed by a low reading on last Friday’s PCE index, the Fed’s favored inflation measure. Low inflation readings are good for mortgage rates so it’s no surprise that […]

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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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How The Recasting of Interest Only Loans Helps With Financial Planning

June 14, 2007

An interesting feature of interest only loans is that your payment is re-calculated each month based on how much money you are borrowing. The industry term for the re-calculation is “recasting”. When an extra principal payment is made on an interest only loan, the new loan payment is calculated as: (Outstanding Loan Size) * (Annual […]

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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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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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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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