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Market Update

Fannie and Freddie stock is getting hammered once again this morning with prices for both GSE’s down about 12%. Oil prices have been about a dollar lower for most of today’s trading session with the weekly inventory reports showing reserves climbing by over nine million barrels beating expectations of an increase of about 1.7 million barrels.

Mortgage Interest Rates*

Rates as of Wednesday, 20th August, 2008:

 

Conforming

APR

Payment per
$1,000

Jumbo

APR

Payment per
$1,000

30 Year Fixed

6.375%

6.489%

$6.24

8.125%

8.256%

$7.42

30 Year Fixed Jumbo Conforming

6.50%

6.615%

$6.32

6.50%

6.615%

$6.32

FHA

6.375%

6.489%

$6.24

6.75%

6.870%

$6.49

5/1 ARM

6.00%

6.111%

$6.00

7.25%

7.374%

$6.82

*Rates are subject to change due to market fluctuations and borrower’s eligibility.

Windermere Mortgage Services Series LLC, Stacey Drake, Branch Manager/Mortgage Consultant 206-256-0066. 30 Day Pricing with 1% origination Fee, FICO 720+

Greg Shaw

Magnoliabluff.com

 

The price of oil dipped back to the $113-a-barrel level Wednesday after the government reported a massive increase in the nation’s crude supplies amid a slowdown in fuel demand.


Market Update

The bond market is mixed this morning as traders react to dipping crude prices and hotter-than-expected reports on wholesale inflation.
Providing pressure to the major indices, the Bureau of Labor Statistics’ producer price index showed a 1.2% increase for July, much more than the 0.6% expected by economists. The core rate jumped 0.7% for the month, also exceeding expectations of a 0.2% increase. Year over year, the core PPI increased 3.5%. Separately, the Census Bureau revealed that housing starts decreased 11% to an annual rate of 965,000 in July, a result that was slightly ahead of analyst forecasts.
In a broader development concerning the financials, a former chief economist for the International Monetary Fund, Kenneth Rogoff, said he expects a large U.S. bank to go under in the coming months. Rogoff said that further consolidation among the financials will have to take place before the credit crisis abates.

Mortgage Interest Rates*

Rates as of Tuesday, 19th August, 2008:

 

Conforming

APR

Payment per
$1,000

Jumbo

APR

Payment per
$1,000

30 Year Fixed

6.375%

6.489%

$6.24

8.125%

8.256%

$7.42

30 Year Fixed Jumbo Conforming

6.50%

6.615%

$6.32

6.50%

6.615%

$6.32

FHA

6.375%

6.489%

$6.24

6.75%

6.870%

$6.49

5/1 ARM

6.00%

6.111%

$6.00

7.375%

7.500%

$6.91

*Rates are subject to change due to market fluctuations and borrower’s eligibility.

Windermere Mortgage Services Series LLC, Stacey Drake, Branch Manager/Mortgage

 

 

Consultant 206-256-0066. 30 Day Pricing with 1% origination Fee, FICO 720+

Magnoliabluff.com

 


Market Update

Mon, Aug 18 - 12:16 PM ET
Equity markets fall on Fannie/Freddie woes. The Dow down 120 points. Mortgage Bonds still hugging the flatline.

10:12 AM ET - Stocks flat, Mortgage Bonds relatively flat on this lazy summer morning. Oil trading up a 0.85 at $114.55. Fannie Mae and Freddie Mac’s share prices are faling again today after A Barron’s article said that the US Treasury will bail them out that would wipe out existing common stockholders.

8:28 AM ET - No economic news today. Mortgage Bonds trading near unchanged levels after Friday’s rally. Stock futures look for a positive open.

Mortgage Interest Rates*

Rates as of Monday, 18th August, 2008:

 

Conforming

APR

Payment per
$1,000

Jumbo

APR

Payment per
$1,000

30 Year Fixed

6.375%

6.489%

$6.24

8.00%

8.122%

$7.34

30 Year Fixed Jumbo Conforming

6.50%

6.615%

$6.32

6.50%

6.615%

$6.32

FHA

6.375%

6.615%

$6.24

6.75%

6.870%

$6.49

5/1 ARM

6.00%

6.237%

$6.00

7.375%

7.500%

$6.91

*Rates are subject to change due to market fluctuations and borrower’s eligibility.

Windermere Mortgage Services Series LLC, Stacey Drake, Branch Manager/Mortgage Consultant 206-256-0066. 30 Day Pricing with 1% origination Fee, FICO 720+

MagnoliaBluff.com

 


Market Update

The Bond Market is slightly up this morning as better-than-expected economic data and dropping crude prices encourage the stock market. Elsewhere in the realm of economic data, the New York Empire State Index for August ticked up to 2.8, a vast improvement over negative 4.9 in July and ahead of expectations fora 5-point decline. The Federal Reserve’s measure of July capacity utilization came in at 79.8%, in line with expectations. The June figure was revised down to 78.8% from 79.9%. Industrial production increased 0.2% in July, whereas analysts were projecting no growth for the month.

Mortgage Interest Rates*

Rates as of Friday, 15th August, 2008:

 

Conforming

APR

Payment per
$1,000

Jumbo

APR

Payment per
$1,000

30 Year Fixed

6.375%

6.489%

$6.24

8.125%

8.256%

$7.42

30 Year Fixed Jumbo Conforming

6.50%

6.615%

$6.32

6.50%

6.615%

$6.32

FHA

6.50%

6.615%

$6.32

6.75%

6.870%

$6.49

5/1 ARM

6.125%

6.237%

$6.08

7.375%

7.500%

$6.91

*Rates are subject to change due to market fluctuations and borrower’s eligibility.

Windermere Mortgage Services Series LLC, Stacey Drake, Branch Manager/Mortgage Consultant 206-256-0066. 30 Day Pricing with 1% origination Fee, FICO 720+

 

Magnoliabluff.com

Greg Shaw

 


Market Update

Thu, Aug 14 - 1:30 PM ET
A stronger trading US dollar due to hot CPI inflation has led to lower oil prices. Lower oil has in turn led to a rebound in stocks, but mortgage bonds manage to hang onto their modest gains (+12bp).

11:44 AM ET - Mortgage Bonds clinging to meager gains. Stocks move from the red well into positive territory.

9:32 AM ET - The Bond market shrugs off the higher infaltion data and move to near unchanged levels. Stocks under pressure at the open.

8:37 AM ET - Mortgage Bonds open higher but move into the red after a hotter than expected CPI is reported. The move lower is somewhat stabilized by a higher than expected Initial Claims release. Stock futures point towards a lower open.

Mortgage Interest Rates*

Rates as of Thursday, 14th August, 2008:

 

Conforming

APR

Payment per
$1,000

Jumbo

APR

Payment per
$1,000

30 Year Fixed

6.50%

6.615%

$6.32

8.25%

8.381%

$7.51

30 Year Fixed Jumbo Conforming

6.625%

6.741%

$6.40

6.625%

6.741%

$6.40

FHA

6.50%

6.615%

$6.32

6.75%

6.870%

$6.49

5/1 ARM

6.125%

6.237%

$6.08

7.50%

7.626%

$6.99

*Rates are subject to change due to market fluctuations and borrower’s eligibility.

Windermere Mortgage Services Series LLC, Stacey Drake, Branch Manager/Mortgage Consultant 206-256-0066. 30 Day Pricing with 1% origination Fee, FICO 720+

 


Market Update

Tue, Aug 12 - 12:12 PM ET
Minneapolis Fed President Gary Stern in an interview on CNBC on Tuesday said the recent drop in energy prices has diminished some of his concerns about inflation and inflationary expectations. Mortgage Bonds at highs for the session.

11:41 AM ET - Mortgage Bonds stuck in a narrow trading range but still positive. Oil heads lower now at $113.39/barrel down $1.15 after being in the black. Stocks still in the red.

9:51 AM ET - Oil trading near unchanged levels at $114.38. Mortgage Bonds off highs for the day but still in positive territory. Stocks trading lower.

8:50 AM ET - JPMorgan Chase tells of more writedowns after the Bear purchase to the tune of $1.5 billion. US trade deficit unexpectedly narrows. Mortgage Bonds opened higher and got a slight boost from the news. Stock futures lower.

Mortgage Interest Rates*

Rates as of Tuesday, 12th August, 2008:

 

Conforming

APR

Payment per
$1,000

Jumbo

APR

Payment per
$1,000

30 Year Fixed

6.50%

6.615%

$6.32

8.125%

8.256%

$7.42

30 Year Fixed Jumbo Conforming

6.625%

6.741%

$6.40

6.625%

6.741%

$6.40

FHA

6.50%

6.615%

$6.32

6.75%

6.870%

$6.49

5/1 ARM

6.125%

6.237%

$6.08

7.50%

7.626%

$6.99

*Rates are subject to change due to market fluctuations and borrower’s eligibility.

Windermere Mortgage Services Series LLC, Stacey Drake, Branch Manager/Mortgage Consultant 206-256-0066. 30 Day Pricing with 1% origination Fee, FICO 720+

 


Market Update

The Bond Market has been hammered all morning despite a lack of new economic data and only a small rally in stocks. The conflict in Eastern Europe between Russia and Georgia has some traders worried that the recent slide in oil could come to a halt because of supply disruptions.
The biggest economic data of the week is due out Wednesday when the latest retail sales numbers will be released.

Mortgage Interest Rates*

Rates as of Monday, 11th August, 2008:

 

Conforming

APR

Payment per
$1,000

Jumbo

APR

Payment per
$1,000

30 Year Fixed

6.50%

6.615%

$6.32

8.125%

8.256%

$7.42

30 Year Fixed Jumbo Conforming

6.625%

6.741%

$6.40

6.625%

6.741%

$6.40

FHA

6.50%

6.615%

$6.32

6.875%

6.996%

$6.57

5/1 ARM

6.125%

6.237%

$6.08

8.125%

8.256%

$7.42

*Rates are subject to change due to market fluctuations and borrower’s eligibility.

Windermere Mortgage Services Series LLC, Stacey Drake, Branch Manager/Mortgage Consultant 206-256-0066. 30 Day Pricing with 1% origination Fee, FICO 720+

 


“PERSEVERANCE IS A GREAT ELEMENT OF SUCCESS.” Henry Wadsworth Longfellow. Despite strong opposing forces in the early part of the week, Bonds and home loan rates persevered like the greatest Olympian athletes, and were able to end the week in a similar position to where they began.

Remembering that inflation is the arch-enemy of Bonds and home loan rates, bad news on the inflation front caused Bonds and home loan rates to worsen Monday as the Personal Consumption Expenditure Index indicated that inflation climbed 0.8% in June, the highest monthly jump in 27 years. Not a huge surprise, given how energy and commodity prices soared in June.

Despite these inflationary pressures, the Fed announced on Tuesday that they have decided to keep the Fed Funds Rate at 2%, and released a statement that hinted they may not raise the Fed Funds Rate in the near future. Why did the Fed do this? The Fed is trying to balance a slowing economy and the threat of inflation, and while raising rates could help fight inflation, it could also slow the economy even more than it is now. The Fed is hoping that keeping the Fed Funds Rate unchanged will help boost the economy, without fanning the fires of inflation. Since this decision kept the fears of inflation strong, Bonds and home loan rates worsened as a result.

However, Bonds and home loan rates persevered and managed to rally like champions later in the week on the heels of several reports. Causing money to flow from Stocks over to Bonds were a far worse than expected Initial Jobless Claims report and Wal-Mart’s announcement that sales are expected to slow in August. Since inflation remains one of the strongest opponents for Bonds and home loan rates, I will continue to monitor this closely.

Forecast for the Week

 

 

 

 

This week, several reports will show us whether or not inflation is getting hotter. Thursday’s Consumer Price Index (CPI) report will show us inflation at the consumer level - that is, how much more expensive goods and services are for consumers this month over last month. If CPI shows that inflation is growing, Bonds and home loan rates may reverse course and worsen quickly.

But before the inflation news hit the wires, another market mover will likely be Wednesday’s Retail Sales Report, which will show us the total receipts of retail stores. Changes in these numbers are closely followed as a timely indicator of broad consumer spending patterns. This month’s report may show us if spending that had been aided by the Economic Stimulus Package has started to wane. Remember: A strong Retail Sales Report would be good for the Stock market - which stands to reason, as it would indicate continued consumer confidence and dollars being poured into the economy. But a strong Retail Sales Report would be bad news for Bonds and home loan rates, as money that pours over into an improving Stock market would be coming out of Bonds, and would in turn cause home loan rates to worsen.

Remember when Bond prices move higher, home loan rates move lower…and vice versa. As you can see in the chart below, Bonds ended the week on a positive note, but are now facing a “ceiling of resistance” overhead that might shut down any further improvement. Like an Olympian faced with a barrier, Bonds will need a boost to break through a tough ceiling that has halted advances on five occasions in the past few weeks. The nature of the reports will determine whether Bonds and home loan rates can make more improvements, or reverse from the overhead ceiling and worsen.

Chart: Fannie Mae 6.0% Mortgage Bond (Friday Aug 08, 200 8)

 

The Mortgage Market View…

 

 

 

 

 

The Week’s Economic Indicator Calendar

 

 

 

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of August 11 – August 15

 

 

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact

Tue. August 12

08:30

Balance of Trade

Jun

-$61.9B

 

-$59.8B

Moderate

Wed. August 13

08:30

Retail Sales

Jul

0.5%

 

0.1%

HIGH

Wed. August 13

08:30

Retail Sales ex-auto

Jul

0.6%

 

0.8%

HIGH

Wed. August 13

10:30

Crude Inventories

8/09

NA

 

1614K

Moderate

Thu. August 14

08:30

Jobless Claims (Initial)

8/09

438K

 

455K

Moderate

Thu. August 14

08:30

Core Consumer Price Index (CPI)

Jul

0.2%

 

0.3%

HIGH

Thu. August 14

08:30

Consumer Price Index (CPI)

Jul

0.4%

 

1.1%

HIGH

Fri. August 15

08:15

Empire State Index

Aug

-5.0

 

-4.9

Moderate

Fri. August 15

09:15

Capacity Utilization

Jul

79.8%

 

79.9%

Moderate

Fri. August 15

09:15

Industrial Production

Jul

0.0%

 

0.5%

Moderate

Fri. August 15

10:00

Consumer Sentiment Index (UoM)

Aug

62.0

 

61.2

Moderate

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