Mortgage Rates Rise Faster Than Freddie Mac Survey Can Report

December 7, 2010 By Leave a Comment

Mortgage Rate surveys are not real-time

It’s been a wild 30 days for home affordability.

Since the Federal Reserve’s November 3 press release, in which our nation’s central banker committed $600 billion to bond markets, mortgage rates have leaped, moving quicker than the news can report them.

This week is a terrific example of that.

Today, newspaper headlines in Arizona and around the country read that mortgage rates rose 0.06% on average over the past 7 days, and that average loan fees remain unchanged at 0.8 points. The data is based on Freddie Mac’s Primary Mortgage Market Survey, a weekly poll of more than 100 lenders around the country.

Unfortunately for Tempe home buyers and other local rate shoppers, the Freddie Mac figures are low. Both mortgage rates and fees rose by more than what’s being reported.

Freddie Mac’s data is not real-time. It’s out of date for today’s pricing.

According to Freddie Mac, the survey’s methodology has it collecting rates from participating lenders between Monday and Wednesday, averaging the results, and then publishing that data Thursday late-morning. The problem there, as you know if you’ve shopped for a mortgage rate, is that mortgage rates change all day, every day.

Monday’s rates are unrelated to Wednesday’s rates, yet both are included and given equal weight by Freddie Mac. Some weeks, it’s not a problem; rates are relative static.

This week was not such a week.

Rates were jumpy Monday and Tuesday, rising and falling throughout the course of the day. Action like that is normal. But Wednesday, mortgage bonds put forth their third-worst daily showing of the year.  Rates rose by as much as 3/8 percent between the market open and close, with the bulk of the sell-off coming late in the day. In other words, after the deadline of Freddie Mac’s survey.

Mortgage lenders accurately reported their rates to Freddie Mac, but they reported them before the market took a turn for the worse.

The lesson is that mortgage rates are time-sensitive and can’t be captured by a weekly, average survey. When you need to know what mortgage rates are doing right now, the best place to check is with your loan officer. Otherwise, you may just get yesterday’s news.

Filed Under: Mortgage Rates Tagged With: , ,

Better Credit Scores Get Better Mortgage Rates in Mesa and Gilbert

November 2, 2010 By Leave a Comment


Mesa Mortgage Interest Rates and rates for Gilbert home buyers have been falling since early-April 2010. Whether you’re looking to refinance or buy a home, however, know that not everyone will qualify for today’s low rates.

Mortgage approvals are primarily based on good income, good equity and strong credit, and, without all three, the best rates of the day remain out of reach. Now, you can’t always ask for a raise and equity is a function of the housing market, but you can do something about your credit score.

In this 4-minute segment from NBC’s The Today Show, you learn some credit basics to help propel your score higher:

  • There’s no “quick fix” for credit. Time + Good Credit Behavior = Better FICOs.
  • Pay every bill when it comes due. Even one late payment can damage your score.
  • Don’t close old credit cards

Also among the segment’s advice is to stop worrying about whether rates have bottomed. Refinance today if it makes financial sense. Then, if, by chance, rates fall in the future, just refinance again.  Don’t be greedy, we’re told.

Filed Under: Credit Scoring, Financing Information, Mortgage Rates Tagged With: , ,

Mortgage Rates in Mesa AZ – A Rocky Ride

September 20, 2010 By Leave a Comment

Sometimes I get asked what do I think rates are going to do and I have to sit back and think for a minute – how do I answer this question without sounding like I’m trying to sell something versus providing real value to the person asking me the question.

Right now, as of September 2010, mortgage rates are the lowest that I can remember – which is going back quite a few years – no I’m not going to say how far back, but let’s just say at least 20 years…

With low rates home buying is an attractive proposition and when coupled with low home prices home buying certainly hasn’t been this good since the early 2000′s. But, while buying is good, it is not necessarily for everyone. Please see: Buy or Rent: is it right for me?

There are a lot of factors that go into what mortgage rates are going to do. I am no expert so I leave the technical parts of what will mortgage rates do up to my mortgage lenders. What’s happening right now however is that those that watch rates and act on rates (Wall Street Investors) are grappling with the state of U.S. economy and unable to discern whether it’s growing, or slowing. With this and other information like retail sales, consumer confidence, unemployment/employment figures and other federal economic reports showing conflicting information, mortgage rates have been dancing.

What is important to consider though is that with rates and housing prices as low as they are, worrying about rates going lower shouldn’t be that much of a consideration if you are a serious home buyer or home seller. If you can’t afford a home in today’s market with 4% interest rates on lower priced homes, perhaps owning a home isn’t right for now. If you are serious and qualified, a .125% change in rate isn’t going to make that much difference to you.

Therefore, if you haven’t already, it may be time to call your loan officer for a refinance or to get pre qualified to buy a new home. Rates could certainly fall further, but they’re looking more likely to rise. Give me a call to start your Mesa AZ home search.

Filed Under: Financing Information Tagged With: , ,

Kids Back in School in Mesa Leads to Lower Mortgage Rates – Huh?

September 15, 2010 By Leave a Comment

Retail Sales (September 2008 - August 2010)I don’t know about you, but it never ceases to amaze me what I hear that impacts mortgage rates. Like for example, I recently heard that there is a relationship between consumer spending (what you and I spend just living our lives) and mortgage rates – which is directly tied to home affordability.

As you read through the rest of what I have written you may get a sense that the housing industry is really tied to and impacted by many different factors.

The recent rise in mortgage rates was slowed this week after the government released its Retail Sales report for August.

Prior to Tuesday, Sept 14, 2011, mortgage rates had been spiking across Arizona on the resurgent hope for U.S. economic recovery. The sentiment shift was rooted in reports including the Pending Home Sales Index and Initial Jobless Claims, both of which showed surprising strength last week.

August’s Retail Sales, though, after removing motor vehicles, auto parts and gasoline sales, failed to maintain the momentum. Its figures were actually in-line with expectations — it’s just that expectations weren’t all that high.

Wall Street now wonders whether the weak Back-to-School shopping season will trend forward into the holidays.

The doubt spells good news for mortgage rates and home affordability.

Because Retail Sales is tied to consumer spending and consumer spending accounts for two-thirds of the economy, a weak reading tends to drag down stock markets and pump up bonds, and when bonds are in demand, mortgage rates fall.

This is exactly what happened Tuesday. The soft Retail Sales data eased stock markets down, and generated new demand for mortgage bonds. This demand caused bond prices to rise, which, in turn, caused mortgage rates to fall.

Mortgage rates did not cut new lows this week, but they’re very, very close.

With mortgage rates at historical lows, it’s an excellent time to look at a refinance, or gauge what financing a new home would cost. Low rates like this can’t last forever.

Filed Under: Retail Sales Tagged With: , ,

Understand Your Interest Rate Lock Period and Your Interest Rate

September 14, 2010 By Leave a Comment

I’ll start with the bottom line here: the longer you lock your interest rate, the higher your interest rate will tend to be. While this might mean to you that you should have a shorter rate lock to get a better rate you may want to keep reading this post because you do have several things to think about as you discuss your rate lock with your loan officer.

First, rate locks are a bank’s guarantee to honor a specific mortgage rate for a specific, finite period of time. Rate locks allow home buyers to reserve mortgage rates today even though their respective closings may be scheduled as far as a year into the future.

A rate lock is a contract. No matter what the “current market rate” is at the time of closing, the bank will honor the terms of the original rate lock.

It would be like making an agreement to buy Microsoft stock at a specific price 60 days from now. No matter what the price, you already know what you’re paying for it.

In this sense, rate locks are predictions about the future and, meanwhile, as we all know, the future can be a challenge to forecast. Lenders know this, too, of course, so it’s easy to understand why longer rate locks tend to be more expensive than shorter ones.

The longer the rate lock, the more risk to the bank – the more they charge in interest rate.

You do want to be careful about your rate lock time period because rates can sometimes radically change without notice – not only for the good for definitely for the worse. You don’t want to get caught in the waiting game too much if you can avoid it. What I mean by this is that if you are waiting for a 15 day lock but you have two weeks to wait it out, then you could be putting yourself at risk for an increased mortgage rate that goes beyond your comfort level or even your qualification level.

My suggestion to my customers about their rate lock is that if you get a mortgage payment that you are comfortable with you should ask what it would take to lock that rate in to match your closing date so you don’t lose it.

Of course you should discuss this matter with your loan officer.

Filed Under: Mortgage Rates Tagged With: ,

Refinance My ARM or Let it Ride?

September 10, 2010 By Leave a Comment

Should I Refinance?When adjustable-rate mortgages are on the verge of adjusting, a common concern among my Arizona clients is that their mortgage rates will adjust higher. From time to time I get asked the question about whether I think someone who has an ARM should refinance now, or wait.

I’m not a loan officer so giving this kind of advice isn’t something I typically do. What I suggest is that you speak to a loan officer, and even your financial planner or adviser if you have questions. But, that said, I will offer a few little tidbits – after all I do love to pass what I know along.

What is bringing on all these questions about refinancing ARM’s is the wonder about the economy and that mortgage interest rates are so low at time – September 2010. Interests are definitely low right now and from what I know about ARM rates, especially from those mortgages that were gotten several years ago, are very attractive at the moment.

So with low rates, should someone refinance out? The answer really depends on your comfort level in playing with rates as well as your personal situation in relation to your long and short term financial goals.

  • In general, if you can refinance and get into a fixed rate with rates as low as they are, you can do yourself a long term favor by locking in a very low fixed rate for the long haul.
  • If you are not planning on staying in the home very long you may want to just hang with your current ARM so you don’t erode any more of the equity in your home as your prepare to sell your home.
  • Even if you are planning on selling your home (if you are planning on selling by the way you and I should be on the phone setting up a listing appointment) and you are worried about interest rates going up you may want to consider refinancing to save yourself some stress – that is if you have sufficient equity (or money in the bank to pay for closing costs).

So like I started out this post, I recommend that you consider talking to your loan officer and/or financial adviser and making a plan. With mortgage rates as low as they’ve been in history, most homeowners, even some of us in Arizona, have options.  Just don’t wait too long. LIBOR — and mortgage rates in general — are known to change quickly.

Filed Under: Adjustable Rate Mortgages Tagged With: , , , , , , ,

Arizona Mortgage Interest Rates Reacting To US Consumer Confidence

August 12, 2010 By Leave a Comment

Consumer Confidence Index July 2008-July 2010U.S. consumer confidence is plunging which tends to hurt the US stock market. However, falling confidence numbers while presumed to mean something poor for the economy, they can create opportunities for homeowners and homebuyers in my neck of the woods (no pun intended) in Mesa, Gilbert, Apache Junction, and Chandler.

Low confidence can influence the mortgage market in a positive manner, driving mortgage rates down.

Mortgage rates are already at their lowest levels of all-time.

The link between consumer confidence and everyday mortgage rates roots in consumer spending.

Consumer spending accounts for close to 70% of the overall U.S. economy so, the thought goes that, a less confident consumer is less likely to spend money, thereby retarding economic growth. This harms the stock markets and drives cash to bonds, including mortgage-backed bonds.

More bond demand leads bond prices to rise which, in turn, pushes mortgage rates lower.

The other side of lagging confidence is that Americans may be less likely to take new financial risks when they’re feeling unsure, including buying a new home. This can then drag on the housing market, negatively impacting home prices across Arizona.

Falling home values can help buyers, harm sellers, and stymie would-be refinancers.

It’s tough to predict how consumer confidence data will work its way through the economy, but in the near-term, it appears to be helping mortgage rates stay low. If you’re floating a mortgage rate with your lender, or contemplating a refinance, the time may be right to lock in a rate.

Low rates can’t last forever.

Filed Under: Consumer Confidence Tagged With: , ,

A Look Ahead For Mortgage Rates This Week : August 9, 2010

August 8, 2010 By Leave a Comment

Federal Reserve meets August 10 2010Mortgage markets improved again last week on softer-than-expected economic data, punctuated by Friday morning’s weak jobs report. Conforming mortgage rates in Arizona dropped on the news, making new, all-time lows.

Mortgage rates have been on an extended rally dating back to mid-April.

This week, there’s a lot of data and news due for release, the most influential to markets of which is the Federal Open Market Committee’s scheduled policy meeting.

8 times annually, the FOMC meets to discuss the nation’s monetary policy with respect to the current and projected U.S. economic conditions. Sometimes the FOMC takes action on the economy. Other times, it does not.

Either way, Fed meetings are market movers and it’s a gamble to float a mortgage rate ahead of an FOMC get-together.

There’s other stories to watch this week, too. Each has the ability to change mortgage rates.

  • Tuesday : FOMC meeting; Consumer Confidence data
  • Thursday : Jobless Claims
  • Friday : Retail Sales; Consumer Price Index

It’s a busy week on Wall Street, to be sure, and rate shoppers would do well to pay attention. Not only can the FOMC meeting change mortgage rates for every product in every market, but it can also change the outlook for mortgage rates going forward.

Rates are at an all-time low and low rates can’t last forever. We’re in the middle of a Refi Boom today and, soon, the boom will be over.

If you haven’t spoken to a loan officer about refinancing your home, or locking a mortgage rate, your best time to make the call is prior to the FOMC’s Tuesday afternoon adjournment at 2:15 PM ET. Mortgage rates will get jumpy leading up to the meeting, and will most certainly be volatile afterward.

Filed Under: Weekly Review Tagged With: , ,

Buy A Home In Mesa – Refinance Your Mesa Home Mortgage

July 30, 2010 By Leave a Comment

Have you been paying attention to mortgage interest rates lately? If not, I’m here to let you know that they are pretty darn low. In fact, they’re lower than they’ve ever been in history.

Here are a few recent news stories to check out:

  • Mortgage rates set new lows for the 6th straight week (Reuters)
  • Mortgage rates fall again; 30-year fixed at 4.54% (Wall Street Journal)
  • Mortgage rates hit another low : 4.54% (NPR)

Fixed mortgage rates are now down more than 1/2 percent from the start of the year, and 3/4 percent from just 1 year ago. The drop has dramatically improved home affordability for home buyers in Mesa while creating refinance opportunities for existing homeowners.

From a payment perspective, a conforming, 30-year fixed rate mortgage is now cheaper by $41.94 per month per $100,000 borrowed versus July 2009.

A homeowner with a $300,000 mortgage, therefore, is saving $45,295.20 over 30 years.

Low mortgage rates rarely last long and rates appear to have troughed. After a big downhill between April and July, they’re now flat. This could mean rates have finished falling, or that they’re gearing up for another drop lower. Either way, if we haven’t talked recently about home affordability, or at all, it is time for us to get on a call together to see if now is a time for you to really consider qualifying for a mortgage.

Homeowners looking to sell their homes can be hopeful that more home buyers out there can afford to buy a home with lower interest rates. If your home is not in foreclosure or up for short sale, you should have a good chance at selling your home if you work with the right real estate agent – like me!

Filed Under: Mortgage Rates Tagged With: ,

A Look At Mortgage Rates For The Week Of July 19, 2010

July 19, 2010 By Leave a Comment

Housing starts June 2008 - May 2010Mortgage markets improved for the 5th straight week last week as consumer confidence waned and inflation data tamed. Investors ignored the news that 19 of 23 reporting S&P 500 companies beat their respective earnings estimates and sold off on stocks.

There’s concern about a potential economic slowdown for the months ahead and it may be well-founded.

Despite an improving jobs situation and booming retail sales, households are less optimistic about the future and so is the Federal Reserve. In its post-meeting minutes released last week, the Fed revised its U.S. growth estimates downward for 2010 and 2011.

For rate shoppers in Arizona , this is excellent news.

Because of the weakness, conforming mortgage rates fell again last week, extending the current rally in rates to 16 weeks. Mortgage rates are lower than at any time in measured history.

This week, data will be housing market-heavy and mortgage rates could rise or fall.

  • Monday : National Association of Home Builders Index
  • Tuesday : Building Permits and Housing Starts
  • Thursday : Existing Home Sales

Strength in any, or all three, of these housing-related reports should push mortgage rates higher on higher hopes for the economy. Weakness, on the other hand, should have the opposite effect.

Overall, though, mortgage markets are trending better.  Momentum is in effect and refinance activity is soaring. That said, it doesn’t mean that rates won’t rise — they could absolutely. It just takes a change in market sentiment. And that could happen quickly.

Mortgage rates are artificially low right now so even the slightest jolt could cause them to spike. It would be similar to what happened in June 2009 when rates rose 1.125% in just 10 days’ time. Therefore, if you’re shopping for a mortgage and like the rate you’ve been quoted, consider locking in as soon as possible.

There’s very little room for rates to fall further but a lot of room for rates to rise. Make sure you’re on the right side of that bet.

Filed Under: Weekly Review Tagged With: , ,
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