Mortgage-backed securities (MBS) closed the week on a high note.
The Fannie Mae 30-year 3.0% coupon moved +12/32 to close at 104.22. The Ginnie Mae 30-year 3.0% coupon climbed +14/32 to close at 106.05. Mortgage rates dropped roughly 0.125% across the board.
Fannie Mae and Freddie Mac mortgage rates dropped, as did FHA and VA mortgage rates. Jumbo mortgage rates were mostly unchanged.
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U.S. Economy : Growing 2% Per Year
The MBS market opened higher Friday morning with the release of the Bureau of Economic Analysis (BEA) Q3 Advance GDP. “Advance” GDP is so-called because it’s the first estimate of Gross Domestic Product for the quarter. Not all figures are precisely known, but many of them are.
Advance GDP showed 2% growth in the U.S. economy between July-September 2012, a figure which met economist expectations. Growth was largely driven by consumer consumption and larger expenditures from the U.S. government. However, Advance GDP also showed a drop in exports which may be linked to a weaker global economy.
The U.S. economy — like housing — appears to be growing a slow, steady pace. Mortgage rates improved on the news. Pricing for the improved markedly.
Also Friday, the University of Michigan released its most recent Consumer Sentiment Index. The index slipped slightly between readings, suggesting the U.S. consumers may be less likely to make large purchases during the holiday shopping season; or, less likely to change jobs, for example. Consumer spending and housing boost the U.S. economy.
The slip in confidence eased mortgage rates lower, as well.
In global economic news, Friday saw Spain’s unemployment rate reach a record level of 25.02% as the Spanish government continues to grapple with choice to accept European Central Bank aid. Also, in Japan, the government announced a stimulus infusion of 750 billion yen (US$9.4 billion) as its economy shows signs of contraction.
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Mortgage Rates : Low For The Weekend
For home buyers and would-be refinancing households, this weekend presents a good chance to lock mortgage rates while mortgage rates are low. Last week’s Existing Home Sales and New Home Sales data, and Pending Home Sales Index suggest a strong close to the 2012 housing market. As home prices rise, so will home affordability.
In addition, an improving economy should pull mortgage rates up. Get locked ahead of the changes.
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