Mortgage Rates Close to ‘Bottoming,’ Koskinen Says (Update2)
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By Kim Chipman and Romaine Bostick
March 27 (Bloomberg) -- Mortgage rates are “probably as good as it’s going to get” and the housing market is likely to rebound sooner than some forecasts, Freddie Mac interim Chief Executive Officer John A. Koskinen said.
“Mortgage rates, if they go down at all further, it’s going to be incremental,” Koskinen told reporters today in Washington after he met with President Barack Obama. “Interest rates are probably close to bottoming out, and therefore we are telling people” to buy a house now.
The U.S. 30-year fixed mortgage rate as tracked by Freddie Mac fell to 4.85 percent, the lowest on record, on a government plan to increase purchases of mortgage bonds. The U.S. housing market, the worst since the Great Depression, may improve sooner than some economists’ forecasts as people who had put off home purchases take advantage of a “buyer’s market.”
“This is more attractive than they’ve ever been and about as attractive as they’re ever going to be,” Koskinen said of mortgage rates. ‘We are going to begin to see a lot of home purchases by people on the sidelines who are suddenly discovering ‘hey I can afford a house.’”
Read the entire Mortgage rate article here:http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a_7KVrbmxVnQ
Monday, March 30, 2009
Friday, March 27, 2009
Mortgage rates at 52-year low
Mortgage rates at 52-year low
The average 30-year fixed mortgage rate dips to 5.19%, according to a report from Bankrate.com, the lowest rate since 1956.
By Catherine Clifford, CNNMoney.com staff writer
Last Updated: March 26, 2009: 2:38 PM ET
NEW YORK (CNNMoney.com) -- Home mortgage rates dropped to a 52-year low this week, according to a report released Thursday, in the wake of the government's announcement that it will buy more than $1 trillion in debt.
The average 30-year fixed mortgage rate fell to 5.19% this week, down from 5.29% in the week prior, according to Bankrate.com's weekly national survey.
The previous low was 5.28%, hit this January and in June 2003; the last time rates dipped lower than 5.19% was in 1956, according to Bankrate.com.
To put the plunge in mortgage rates into perspective, 30-year fixed home mortgage rates averaged 6.77% in late October. At that time, a $200,000 home loan would have meant a monthly payment of $1,299.86. Now, with the mortgage rates down at 5.19%, the monthly payment for the same loan would be $1,096.99. That works out to a savings of more than $200 per month.
Meanwhile, the average 15-year fixed mortgage rate fell to 4.80% from 4.86% in the the prior week. The 15-year fixed mortgage rate carried an average of 0.49 points.
The government announced last week that it would be buying more than $1 trillion in debt in order to increase liquidity and improve credit conditions. With the key lending rate already at a range of 0% to 0.25%, the Federal Open Market Committee - the policymaking committee of the Fed that sets interest rates - turned to less traditional means to encourage lending.
The Federal Reserve said that it would buy an additional $750 billion in mortgage-backed securities and $300 billion of long-term Treasurys. The so called "quantitative easing" policy essentially increases the money supply and is designed to push interest rates down, making borrowing cheaper.
Not much further to drop: Analysts say that while mortgage rates could edge a smidgen lower, they won't make any more dramatic plunges.
"At this point, what we are going to see is mortgage rates fluctuate at these levels," said Brian Bethune, chief financial analyst at IHS Global Insight. "I don't see them dropping significantly from where they are now."
Mortgage rates move in relation to the yield on the 10-year government bond. While there is not a direct correlation, they do move in the same direction. Bethune said that there are two factors that will prevent Treasury yields, and by extension mortgage rates, from dropping much further.
"One is the huge Treasury borrowing requirements," he said. As the government looks to fund its massive stimulus spending programs, it has had to issue a record amount of debt. The increased supply keeps a lid on the price of bonds and stabilizes yields.
"In addition, as we get closer to perceptions of a trough in the economy, the yields will tend to see upward pressure," said Bethune. Uncle Sam's debt is considered one of the safest places for investors to keep their cash. During times of market uncertainty, demand surges, the prices increase, and yields fall. But as market sentiment begins to believe the economy could be headed for recovery, demand for Treasurys will lessen, lifting yields.
Surge in refinance: The dramatic drop in mortgage rates has motivated home owners to refinance in great numbers, but the drop in mortgage rates has not spurred as large an increase in new home purchases, said Mike Larson, real estate analyst at Weiss Research.
"We are still not seeing a huge impact on home buying," he said. "All else being equal, it will help the market," said Larson. "But it is not the huge impact you are seeing on the refinance side."
Bankrate.com compiles national averages every Wednesday by surveying the top 10 banks and thrifts in the top 10 housing markets. For historical data, Bankrate.com cites the National Bureau of Economic Research.
First Published: March 26, 2009: 12:25 PM ET
Find this article at:
http://money.cnn.com/2009/03/26/real_estate/mortgage_rates/index.htm?section=money_latest
* Please note that if you have a Massachusetts mortgage interest rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a rate renegotiation policy. Contact me for details.
The average 30-year fixed mortgage rate dips to 5.19%, according to a report from Bankrate.com, the lowest rate since 1956.
By Catherine Clifford, CNNMoney.com staff writer
Last Updated: March 26, 2009: 2:38 PM ET
NEW YORK (CNNMoney.com) -- Home mortgage rates dropped to a 52-year low this week, according to a report released Thursday, in the wake of the government's announcement that it will buy more than $1 trillion in debt.
The average 30-year fixed mortgage rate fell to 5.19% this week, down from 5.29% in the week prior, according to Bankrate.com's weekly national survey.
The previous low was 5.28%, hit this January and in June 2003; the last time rates dipped lower than 5.19% was in 1956, according to Bankrate.com.
To put the plunge in mortgage rates into perspective, 30-year fixed home mortgage rates averaged 6.77% in late October. At that time, a $200,000 home loan would have meant a monthly payment of $1,299.86. Now, with the mortgage rates down at 5.19%, the monthly payment for the same loan would be $1,096.99. That works out to a savings of more than $200 per month.
Meanwhile, the average 15-year fixed mortgage rate fell to 4.80% from 4.86% in the the prior week. The 15-year fixed mortgage rate carried an average of 0.49 points.
The government announced last week that it would be buying more than $1 trillion in debt in order to increase liquidity and improve credit conditions. With the key lending rate already at a range of 0% to 0.25%, the Federal Open Market Committee - the policymaking committee of the Fed that sets interest rates - turned to less traditional means to encourage lending.
The Federal Reserve said that it would buy an additional $750 billion in mortgage-backed securities and $300 billion of long-term Treasurys. The so called "quantitative easing" policy essentially increases the money supply and is designed to push interest rates down, making borrowing cheaper.
Not much further to drop: Analysts say that while mortgage rates could edge a smidgen lower, they won't make any more dramatic plunges.
"At this point, what we are going to see is mortgage rates fluctuate at these levels," said Brian Bethune, chief financial analyst at IHS Global Insight. "I don't see them dropping significantly from where they are now."
Mortgage rates move in relation to the yield on the 10-year government bond. While there is not a direct correlation, they do move in the same direction. Bethune said that there are two factors that will prevent Treasury yields, and by extension mortgage rates, from dropping much further.
"One is the huge Treasury borrowing requirements," he said. As the government looks to fund its massive stimulus spending programs, it has had to issue a record amount of debt. The increased supply keeps a lid on the price of bonds and stabilizes yields.
"In addition, as we get closer to perceptions of a trough in the economy, the yields will tend to see upward pressure," said Bethune. Uncle Sam's debt is considered one of the safest places for investors to keep their cash. During times of market uncertainty, demand surges, the prices increase, and yields fall. But as market sentiment begins to believe the economy could be headed for recovery, demand for Treasurys will lessen, lifting yields.
Surge in refinance: The dramatic drop in mortgage rates has motivated home owners to refinance in great numbers, but the drop in mortgage rates has not spurred as large an increase in new home purchases, said Mike Larson, real estate analyst at Weiss Research.
"We are still not seeing a huge impact on home buying," he said. "All else being equal, it will help the market," said Larson. "But it is not the huge impact you are seeing on the refinance side."
Bankrate.com compiles national averages every Wednesday by surveying the top 10 banks and thrifts in the top 10 housing markets. For historical data, Bankrate.com cites the National Bureau of Economic Research.
First Published: March 26, 2009: 12:25 PM ET
Find this article at:
http://money.cnn.com/2009/03/26/real_estate/mortgage_rates/index.htm?section=money_latest
* Please note that if you have a Massachusetts mortgage interest rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a rate renegotiation policy. Contact me for details.
Wednesday, March 25, 2009
Mortgage Rate Alerts
Mortgage Rate Alerts
Lock in a Low Mortgage Rate
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You set your rate and we notify you as soon as it becomes available.
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Lock in a Low Mortgage Rate
JUST 3 SIMPLE STEPS
You set your rate and we notify you as soon as it becomes available.
Don't miss your rate again
Tuesday, March 17, 2009
Housing Starts Unexpectedly Rebound
The U.S. housing sector showed unexpected strength in February, with housing starts and building permits both rising against expectations for continued declines.
U.S. housing starts rose to an annualized pace of 583k, representing a month-over-month increase of 22.2%, according to the U.S. Department of Commerce on Tuesday morning.
The consensus was looking for starts to decline to 450k. The previous month's reading was revised up to 477k from a previously reported 466k.
Single-family homes - the most important component in the report, accounting for four-fifths of housing starts - rose 1.1% to 357k, compared to the previous month's 353k. The rise comes following decline in the component in 20 of the past 21 months.
Multiple-family homes rose to 226k, compared to the previous month's 124k level.
Meanwhile, building permits rose to 547k in February, up from 531k in January. The consensus was looking for a decline to 500k building permits.
Single-family permits rose 11% in the month to 373k in February from January's 336k. Multiple-family unit permits fell to 174k, up from 195k units in January.
By Stephen Huebl and edited by Megan Ainscow
©CEP News Ltd. 2009
U.S. housing starts rose to an annualized pace of 583k, representing a month-over-month increase of 22.2%, according to the U.S. Department of Commerce on Tuesday morning.
The consensus was looking for starts to decline to 450k. The previous month's reading was revised up to 477k from a previously reported 466k.
Single-family homes - the most important component in the report, accounting for four-fifths of housing starts - rose 1.1% to 357k, compared to the previous month's 353k. The rise comes following decline in the component in 20 of the past 21 months.
Multiple-family homes rose to 226k, compared to the previous month's 124k level.
Meanwhile, building permits rose to 547k in February, up from 531k in January. The consensus was looking for a decline to 500k building permits.
Single-family permits rose 11% in the month to 373k in February from January's 336k. Multiple-family unit permits fell to 174k, up from 195k units in January.
By Stephen Huebl and edited by Megan Ainscow
©CEP News Ltd. 2009
Monday, March 16, 2009
Mortgage Market Commentary
Mortgage Market Commentary
Strong demand for last week's Treasury auctions was a major reason why mortgage rates gained 19bps despite the rising stock market. Investors will be keeping an eye on the level of foreign interest in buying U.S. debt. If demand for U.S. Treasuries falls, then interest rates on mortgages will likely move higher. Today the Treasury International Capital data will offer the latest on foreign demand for U.S. securities, especially the Chinese, the largest holder of U.S. debt, including MBS. The big economic news this week will be the Fed Open Market Committee (FOMC) meeting on Wednesday. Cutting rates is no longer an option, but the Fed may announce additional measures to stimulate the economy. The most significant economic data this week will be the monthly inflation reports; Producer Price Index (PPI) on Tuesday and Consumer Price Index (CPI) on Wednesday. Higher inflation leads to higher mortgage rates. Other reports this week include, Industrial Production on Monday, Housing Starts on Tuesday, Mortgage Bankers Association (MBA) weekly applications on Wednesday and Jobless Claims, Leading Indicators & Philadelphia Fed index on Thursday. Also on Thursday the Treasury announces the amount of 2yr & 5yr notes to be auctioned. Fed Chief Bernanke speaks on Friday, rounding out the week.
Strong demand for last week's Treasury auctions was a major reason why mortgage rates gained 19bps despite the rising stock market. Investors will be keeping an eye on the level of foreign interest in buying U.S. debt. If demand for U.S. Treasuries falls, then interest rates on mortgages will likely move higher. Today the Treasury International Capital data will offer the latest on foreign demand for U.S. securities, especially the Chinese, the largest holder of U.S. debt, including MBS. The big economic news this week will be the Fed Open Market Committee (FOMC) meeting on Wednesday. Cutting rates is no longer an option, but the Fed may announce additional measures to stimulate the economy. The most significant economic data this week will be the monthly inflation reports; Producer Price Index (PPI) on Tuesday and Consumer Price Index (CPI) on Wednesday. Higher inflation leads to higher mortgage rates. Other reports this week include, Industrial Production on Monday, Housing Starts on Tuesday, Mortgage Bankers Association (MBA) weekly applications on Wednesday and Jobless Claims, Leading Indicators & Philadelphia Fed index on Thursday. Also on Thursday the Treasury announces the amount of 2yr & 5yr notes to be auctioned. Fed Chief Bernanke speaks on Friday, rounding out the week.
Wednesday, March 4, 2009
Special Report
Special Report
Updated Housing Plan
03/04/2009
Today the Treasury Department released the details and guidelines of the Obama Administration’s Housing Plan which is being called “Making Home Affordable”
The following links will provide you with direct access to read the Treasury Department’s release:
Click here for the summary
Click here for the Housing Fact Sheet
Click here for Modification Guidelines
Updated Housing Plan
03/04/2009
Today the Treasury Department released the details and guidelines of the Obama Administration’s Housing Plan which is being called “Making Home Affordable”
The following links will provide you with direct access to read the Treasury Department’s release:
Click here for the summary
Click here for the Housing Fact Sheet
Click here for Modification Guidelines
Mortgage Market Commentary
Mortgage Market Commentary
Mortgage backed securities prices are lower (rates higher) this morning as stocks rose around the world and traders increased concern supply is overwhelming demand leading to higher rates. FNMA 4.5% coupon 100.55bps, down 20bps and the low of the session. U.S. service sector shrank further in February as job losses sapped consumer confidence and spending. The service sector represents about 80% of U.S. economic activity. The Mortgage Bankers Association weekly purchase index fell 6% & refinancing index decreased 15% coinciding with 30yr mortgage rates rising above 5%. The Fed's Beige Book will be released at 11am pt.
Mortgage backed securities prices are lower (rates higher) this morning as stocks rose around the world and traders increased concern supply is overwhelming demand leading to higher rates. FNMA 4.5% coupon 100.55bps, down 20bps and the low of the session. U.S. service sector shrank further in February as job losses sapped consumer confidence and spending. The service sector represents about 80% of U.S. economic activity. The Mortgage Bankers Association weekly purchase index fell 6% & refinancing index decreased 15% coinciding with 30yr mortgage rates rising above 5%. The Fed's Beige Book will be released at 11am pt.
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