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Ride the mortgage rate roller coaster. Literally.
Mortgage rates tend to climb with the mercury. It's been the case in each of the last 3 years. As spring months turn into summer, the average 30-year fixed mortgage rate rises. This year should be no different.
February's mortgage market could be categorized as "on edge". For the most part, rates didn't change intra-day. It was common for lenders to issue rate sheets in the morning and stick to their pricing through market close. However, there were two days on which 3 rate sheets were issued, and 1 day on which 4 were issued.
According to Freddie Mac, Primary Mortgage Market Survey results are collected Monday through Wednesday, then published to the public Thursday. By design, therefore, the survey lumps mortgage market activity spread across 3 days into 1 single point of data. Survey results are skewed, therefore, based on the when survey responders get back to Freddie Mac. Last week, this point was painfully clear.
Thursday, shortly after the markets closed, the Federal Reserve announced a 25 basis point increase to the Discount Rate. The Discount Rate is now 0.750%. Mortgage markets are selling off on the news. The Era of Low Mortgage Rates may be officially over.
On average, mortgage lenders issued just 1.4 rate sheets per day in January, or 7 per week. Mortgage rates haven't been that stable on day-to-day basis in 10 months. However, stability has a way of unwinding rather quickly. Here's what to expect in February.
If you want to know where mortgage rates are headed in the future, you may be better off ignoring the experts. I conducted a 50-week study of the popular Bankrate.com Mortgage Rate Trend Index and it showed that the "expert consensus" on mortgage rates is wrong 3 times more often than it's right. That's not good.
Bad news for Cincinnati rate shoppers and home buyers -- mortgage rate volatility is back. Last month, mortgage lenders issued nearly 2 rate sheets per day on average, the most rate sheets per day since August and the first increase since June when mortgage rates rose into the 6s. Since reaching an all-time low November 30, 2009, mortgage rates have changed 45 times. Here's what to do about it.
It's a terrific time to shop for a mortgage. Rates are scraping all-time lows and MBS volatility is fading. Mortgage rates are changing every 5 hours on average -- a molasses pace as compared to June and the slowest rate since March. Slow and low. That is the tempo. And it suits rate shoppers just fine.
Like in 2006, 2007 and 2008, Autumn 2009 is marked by falling leaves and falling mortgage rates.The trend looks more like a pattern.Based on Freddie Mac data of the last 4 years, 30-year fixed mortgage rates rise from January through August, and fall through fall. There's 6 weeks left until January. The clock may be ticking for today's home buyers and rate shoppers.
Mortgage rates aren't changing as quickly as they did this summer, but they're still changing pretty quickly. Over the last two month, on average, lenders have updated pricing every 4 hours, 11 minutes. Over the last week, it's 3 hours, 20 minutes. It's tough to shop for mortgage rates at a time like this.
If history is an indicator, mortgage rates should ease a bit into 2010. Data from Freddie Mac since 2006 shows that 30-year fixed mortgage rates tend to rise during the summer months, and fall through the fall. So far, 2009 is staying true to form.
Thursday, Freddie Mac published its weekly mortgage market survey. The report showed mortgage rates sub-5 percent, trolling near all-time lows. Versus October 2008, 30-year fixed mortgages are down 1.07%. The press was eager to report this story -- mostly because anytime mortgage rates below 5.000 percent, it makes for good copy. But, for rate shoppers in Cincinnati and Chicago, by the time Friday's business section was delivered, the Freddie Mac survey was already out-of-date.
Based on how the mortgage market's been moving lately, on 2 out of 3 days, a morning rate quote from your lender is going to be expired by the afternoon. It makes shopping for a mortgage a complicated business. On average, rates are changing every 4 hours, 2 minutes.
It appears that shopping for a mortgage rate isn't getting any simpler. For the 3rd consecutive 60-day period, mortgage lenders issued 2-plus rate sheets per day on average and rates changed once every 3 hours, 54 minutes. But for all of those updates -- surprisingly -- rates haven't really changed all that much.
A 1-minute video discussing today's mortgage rates, "pattern" trading, and why today may be a good day to get locked in.
For the second consecutive month, mortgage lenders issued 100-plus rate sheets in a 60 day period. That's 2.36 rate sheets per day, or roughly 0.64 less than the Magic Number. It's a ridiculously high number in the context of mortgage market history.
In yesterday's post, I described mortgage rates as being "range-bound", repeatedly returning to the same 5.250 percent, 0 points marker since last December. Rather than take my word for it, though, check out the chart. It plots the Freddie Mac, 30-year fixed mortgage rate from December 2008 to July 2009.
Mortgage rate volatility is back in a big way, folks. To put the pace of change in perspective, consider this: * In the last 60 days, lenders have issued 4 or more rates sheets in a day once per week * In the last 365 days, lenders have issued 4 or more rates sheets in a day once per month. The last 2 months have been a mortgage rate whirlwind.
To a consumer, one of the most difficult facets of shopping for a mortgage is figuring out just what mortgage rates are doing at any given time. Despite countless websites and blogs devoted to the topic of mortgage, the most important part of a person's research -- the darn price -- can't be found hardly anywhere online. It's a horrifying revelation for people vis-à-vis the way we've all been trained to use the internet. We're taught to use the internet to eliminate information asymmetry; to know the price before we ever show up at the store. That way, we can negotiate the best possible deals for ourselves. Except it doesn't work like that for mortgages.
Mortgage rates are rising in this summer but don't look so shocked -- rates seem to rise every summer. As recorded by Freddie Mac, since 2006, 30-year fixed-rate conforming mortgage rate have made a habit of rising in May, June, July and August before settling down through football season. This year, the June Swoon looks especially strong. Mortgage rates are higher by 3/4 percent versus late-May and we're only at the start of the summer trend.
You likely know this already but mortgage rates have soared since Memorial Day. Soared. Strangely, it's the most improbable turn of events that everybody and their mother saw coming. The root of the rise rests in inflation. As in, the fear of. And this run on rates had been predicted as far back as December 16, 2008 when the Federal Reserve first dropped the Fed Funds Rate to near 0 percent.
After a two-month period of relative calm, Memorial Day 2009 ushered in a new era of mortgage rate volatility. Over the last 5 days of trading, mortgage lenders have issued 19 separate rate sheets, or nearly four per day. Every 2 hours, in other words, mortgage rates are changing and when they change, they change big.
After two straight months during which mortgage lenders were apt to let morning rate sheets stand, volatility is returning to mortgage rates. Over the last 60 days, on average, lenders have released mid-day, interest rate updates on 3 days of the 5-day workweek. It's making the process of shopping for mortgages a little bit more challenging.
The Federal Reserve's Agency MBS Program introduces massive amounts of demand for mortgage-backed bonds over a short period of time, creating a buy-side imbalance that leads bond prices higher and bond yields lower. It's possible the Fed could expand the program, bringing mortgage rates down to the 4-percent range once again.
In March and April 2009, lenders issued one rate sheet daily on more days than they issued multiples. Volatility is increasing, however.
With evidence that Swine Flu ran for the border this past weekend, mortgage rates are improving. Confirmed cases of H1N1 Swine Flu have spread to 5 continents and financial contagion has put markets in Safe Haven mode.
As stock markets finish a quarter marked by high volatility, mortgage pricing seems to have settled down a bit. Last month, for the first time in more than a year, mortgage lenders held their morning pricing all the way through market close. This is an odd development, though; incongruent with...
At least 3 days per week, data from January and February 2009 shows, mortgage rates changed at least twice daily. Lest you think that's a rapid rate of change, scroll down the list and you'll recognize that last month came courtesy of the The Slowskys. There's been a marked reduction...
What is a rate sheet? It's a mortgage lender's "price sheet"; its available-to-the-public mortgage rates for its products. Products include 30-year fixed rate mortgages, 5-year ARMs, FHA loans, and the like. If the bank offers it, it's on the rate sheet and when rate sheets change, by definition, mortgage rates change, too.
It's too bad for Americans that the press over-simplifies the Freddie Mac survey. the survey gives two pieces of information -- (1) mortgage rates, and (2) mortgage fees -- but the press only reports on one of them -- rates.
Several weeks ago, the Federal Reserve pledged $500 billion to the mortgage-backed bond market and, after the announcement, mortgage rates fell. This happened because conforming mortgage rates are directly correlated to the demand for mortgage bonds. When demand rises, prices rise with them, thereby causing rates to fall.
Mortgage Rate Volatility slowed a bit in December after record-breaking changes in October and November. The slowing pace of change is good news for Cincinnati homeowners that joined the Refi Boom that closed out 2008. It was much easier to shop for a mortgage rate in the absence of 4-...
The Wall Street Journal ran a terrific story Thursday, deep under the C section. The piece talks about Wall Street's 3 o'clock hour and how it's increasingly defining market performance. Because we're in a down market and investors are highly levered, with each day comes a new batch of forced...
Mortgage rates are a by-product of the mortgage bond market and, like everything else on Wall Street, they are subject to speculation. In general, when the economy is expected to expand in an orderly fashion, money often chases risk. It flows from the bond market to the stock market. By...
Maybe you've heard about this 4.5 percent mortgage rate thing, sponsored by the government? Just to be sure, here's the background: Wednesday: A story
November 2008 was another record-breaking month for Mortgage Rate Volatility. While market players drove themselves crazy, rapidly alternating between economic optimism, pessimism and cynicism, Americans looking for new home loans were forced to ride shotgun. Related to Wall Street's uncertainty, mortgage rates changed 2.40 times per day, on average, over...
