While the technical indicators point out that we are due for a reversal, with the market ripe for a sell off, the uncertainty of a possible government shutdown and political posturing are keeping traders conservative with bonds.
We have a very important week for economic data, but they are being over shadowed by the new fiscal year for the U.S. government and the potential shutdown this evening. If the shutdown does occur, some economic data will not be released. There are no major Treasury auctions this week.
What effect would a government shutdown have?
FHA and VA mortgages will still be available, but in order to process and facilitate these programs, mortgage lenders rely on government employees that will be part of the shutdown shall it occur. If that does take place, expect lenders to face delays that they have no control over.
The looming shutdown is helping rates as of right now, but if a compromise is reached and the shutdown averted, expect rates to increase along with an extended period of volatility.
Work closely with your Mortgage Loan Professional to stay ahead of lender repricing upon news of a compromise.
- Michael Corboy
www.specialtyfinancialmtg.com
Monday, September 30, 2013
Friday, September 27, 2013
Today's Interest Rate Forecast
Yesterday saw the MBS
markets give back 24 basis points, meaning that rates should remain unchanged
but there is a small deterioration to rebate pricing. Even though
economic news was released yesterday that should have caused an MBS sell off,
we saw bonds hold their ground because of the looming government shutdown and
discussions on raising the debt ceiling.
Today's Interest Rate
Market Forecast must focus on watching which way the market
breaks. If the MBS market continues to improve, we could see rates go
down some more. However, if this rally dies off as the technical
indicators point out that we are due for a reversal, and that the market is
ripe for a sell off.
Next
week we will probably see the volatility rise again as we get economic data on
jobs and we see where the chips fall on the politics in Washington D.C.
Today is a full slate of economic data releases that can potentially move the markets. Work closely with your Most Trusted Mortgage Loan Professional to stay ahead of lender repricing for the worse in case of negative MBS performance.
Today is a full slate of economic data releases that can potentially move the markets. Work closely with your Most Trusted Mortgage Loan Professional to stay ahead of lender repricing for the worse in case of negative MBS performance.
-Michael
Corboy
www.specialtyfinancialmtg.com
Thursday, September 26, 2013
Yesterday, MBS gained 35 bps resulting in improvement for the 30 yr. fixed rates. However, we have reached a point where you may see less of the market gains affect interest rate and rebate pricing, as lenders hedge themselves against a sell off due to there not being much more room for improvement.
We have had three positive data releases without any negative impact on pricing. This is due to the market still believing that there will be a government shut down and that is why MBS pricing is rising and Treasury yields are falling.
Europe is helping drive pricing up as the European Central Bank said they are ready to pump more cash into the banking system and are considering other stimulative measures.
Weekly Initial Jobless Claims hit 305K vs. the estimated 325K and the prior reading was revised to 310K. Those are very low readings and will have a negative impact on pricing.
Today's Daily Rate Forecast has been made available to you by a Mortgage Professional who has access to real time Wall St. data and instant market alerts with breaking news. If you would like to know the benefits of locking your rate vs. floating, we are available to answer any questions you may have about this information or your unique loan scenario.
- Michael Corboy
www.specialtyfinancialmtg.com
We have had three positive data releases without any negative impact on pricing. This is due to the market still believing that there will be a government shut down and that is why MBS pricing is rising and Treasury yields are falling.
Europe is helping drive pricing up as the European Central Bank said they are ready to pump more cash into the banking system and are considering other stimulative measures.
Weekly Initial Jobless Claims hit 305K vs. the estimated 325K and the prior reading was revised to 310K. Those are very low readings and will have a negative impact on pricing.
Today's Daily Rate Forecast has been made available to you by a Mortgage Professional who has access to real time Wall St. data and instant market alerts with breaking news. If you would like to know the benefits of locking your rate vs. floating, we are available to answer any questions you may have about this information or your unique loan scenario.
- Michael Corboy
www.specialtyfinancialmtg.com
For the last few weeks all eyes have been on the FOMC. The Fed then announced that they would not start tapering off purchases of Treasuries and MBS until they seen continued improvement in economic data. This resulted in an immediate improvement of .125-.250% in rates.
Continued improvement has been seen based on speculation that any Fed tapering will be far off due to the potential government shutdown. We have seen rates remain flat, with the improvements occurring in rebate pricing, however to see any significant rate improvement, MBS will have to improve by hundreds of basis points.
As last week continued to show improvement, we switched back to monitoring the FNMA 3.5 MBS as the par coupon. We believe to be a good sign for improving rates over the next couple of weeks.
However, always be prepared for a sudden market reversal and work closely with your Mortgage Loan Professional to protect your interest rate.
- Michael Corboy
www.specialtyfinancialservicesmtg.com
Continued improvement has been seen based on speculation that any Fed tapering will be far off due to the potential government shutdown. We have seen rates remain flat, with the improvements occurring in rebate pricing, however to see any significant rate improvement, MBS will have to improve by hundreds of basis points.
As last week continued to show improvement, we switched back to monitoring the FNMA 3.5 MBS as the par coupon. We believe to be a good sign for improving rates over the next couple of weeks.
However, always be prepared for a sudden market reversal and work closely with your Mortgage Loan Professional to protect your interest rate.
- Michael Corboy
www.specialtyfinancialservicesmtg.com
Monday, September 9, 2013
Real Estate News
New
homes could get more expensive in the coming months as a shortage of suitable lots
are driving up builders' costs. In 27 leading markets, the average price
of a finished lot ready for building was up 40 percent in the second quarter
from a year ago, according to John Burns Real Estate Consulting. Even
steeper increases have hit some markets that have also seen strong gains in home
values and demand. Year over year, finished lot values were up 87 percent
in San Francisco and Oakland, 75 percent in Atlanta and 70 percent in Las
Vegas. The big jumps are "making up for lost ground" during the
housing downturn when lot prices fell, says David Crowe, chief economist for the
National Association of Home Builders. The higher lot prices may
foreshadow higher home prices months from now. Finished lot prices represent
almost 22 percent of a new home's price, Crowe says. Builders expect
future home prices will cover their higher lot costs.
You
can view the updated employment report and Real Estate News at:
- Michael Corboy
www.specialtyfinancialmtg.com
MBS Recap and Update
Last week
MBS lost - 78 basis points causing the 30 year fixed rates to move higher.
MBS were
under pressure all week (which drives mortgage rates upward) on three factors:
First, we had some very strong economic news with ISM Manufacturing and
Servicing, Auto Sales and a positive tone in the Fed's Beige Book. Secondly,
the bond market reduced some of its "fear factor" premium as news
stories made it clear that a U.S. strike against Syria would not occur during
the week. And lastly, bond traders were betting that Friday's employment
data would be stronger than expected.
All of
which caused mortgage rates to hit their highest levels in three years.
And
then the much anticipated Non-Farm Payroll (NFP) data hit on Friday.
This
weaker than expected jobs data caused MBS to reverse course from the week-long
sell off and regained some of their losses. This helped mortgage rates
improve from earlier in the week but we still closed down for the week.
This week we have another big week for MBS
trades. Not only do we have some very important economic reports, but we
also have a huge supply of Treasury auctions to contend with, a Congressional
vote on Syria, a monthly bond coupon roll over and this is the last week before
the next Fed meeting.
MBS have
made some more gains this morning and we may see a temporary improvement in
pricing on Wednesday after the Syria vote. If we vote to attack MBS will
spike and your pricing will temporarily improve. This will override any
economic news for the week.
Stay on top of this weeks events by remaining in constant correspondence with a Mortgage Professional who has access to live MBS pricing.
- Michael Corboy
www.specialtyfinancialmtg.com
Thursday, September 5, 2013
Rate Update
Last week was another week where rates ended basically unchanged. There was improvement on Tuesday as news from Syria had traders move to bonds, but those gains were short lived as Wednesday lost as part of a sell off. The conflict in Syria has kept the rates in check despite the positive week in domestic economic data.
This week, rates will see a lot of action based on a large number of economic data releases, as the President asks for support from Congress about taking action against Syria. The next few weeks could be the calm before the storm, as traders await to see what the next FOMC meeting brings on September 18th.
The NAR released the full 2013 Executive Summary, which can be read at:
http://gpp/g;/QE0VFd
You can also view the updated Real Estate Report at:
http://www.newsletterproonline.com/newsletter/originatorpro/?newsletter=true&nid=480&uid=10671
Stay in touch with a qualified mortgage professional to provide you with complete and up to date information pertaining to your mortgage application.
- Michael Corboy
www.specialtyfinancialmtg.com
This week, rates will see a lot of action based on a large number of economic data releases, as the President asks for support from Congress about taking action against Syria. The next few weeks could be the calm before the storm, as traders await to see what the next FOMC meeting brings on September 18th.
The NAR released the full 2013 Executive Summary, which can be read at:
http://gpp/g;/QE0VFd
You can also view the updated Real Estate Report at:
http://www.newsletterproonline.com/newsletter/originatorpro/?newsletter=true&nid=480&uid=10671
Stay in touch with a qualified mortgage professional to provide you with complete and up to date information pertaining to your mortgage application.
- Michael Corboy
www.specialtyfinancialmtg.com
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