Archive for May, 2010

May
31

Mortgage Market Trends for week ending May 28, 2010

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Mortgage rates again moved downward as European debt concerns continued to mount. In addition to Greece’s issues, Spain saw its debt downgraded last week. All of this continues to drive a major international “flight-to-quality” with US treasuries seen ns one of the safest places to stash money. Economically, our recovery does appear to be gaining some traction. While GDP was adjusted down slightly, we still have significant strength in manufacturing. Additionally, government stimulus has kicked home sales higher, with hopes that it can continue to hold its own without more intervention. While consumer moods have a long way to go to recovery, we’re seeing better readings.

Mortgage rates could easily move either way this week, or not at all. Analysts are expecting to see both ISM indices remain strong, and consensus estimates are calling for 500.000 new jobs to have been created last month. However, even with great domestic economic news, we could have continued concerns over Europe’s debt situation holding mortgage rates low.

Graph Courtesy from NY Times in an article by Bob Tedeschi May 25, 2010.  Data provided by Jeff Carpenter, Director of Finance, GFI Mortgage Bankers, Inc.

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May
17

Mortgage Market Trends for week ending May 14, 2010

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Mortgage rates again moved downward last week, as financial markets continued to absorb the reality of the challenges in Europe, especially in Greece. Additionally, concerns over other countries’ debt levels generated some introspection here over our burgeoning debt levels. On a brighter note, economic news continues to point toward recovery. Last week, Retail Sales rose 0.4%, which was slightly better than expected. Industrial Production also climbed by 0.8%, with factory usage again moving closer to pre-recession levels, fueling hopes for a sustained recovery.

Next week, markets will get some insight into inflationary pressures with both the Consumer and Producer Prices Indices. With most experts expecting very little, if any, inflation, a surprise increase in either index could move mortgage rates upward. Even with more and more signs of economic strength here in the US, any additional concerns regarding the situation in Europe will very likely help contain any sizable increase in mortgage rates, at least for the time being.

Graph Courtesy from NY Times in an article by Bob Tedeschi May 12, 2010.  Data provided by Jeff Carpenter, Director of Finance, GFI Mortgage Bankers, Inc.

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May
03

Mortgage Market Trends for week ending April 30, 2010

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Mortgage rates continued to remain fairly flat last week, even as the recovery seemed to solidify its footing. The Federal Reserve left interest rates unchanged, as expected.  The accompanying policy statement did note that “economic activity has continued to strengthen and that the labor market is beginning to improve.” while the Fed believes that it will keep interest rates low for an “extended period” of time, it is worth noting that interest rates below 1.0% can be considered low.  With the Fed Funds rate at 0.25%, the Fed could begin lifting rates at any time.  GDP came in at 3.2%, the third quarter in a row in positive territory.

Two reports will probably dominate this week’s economic news: the ISM Manufacturing Index, and the Employment Report.   If the ISM Index climbs above 60 and unemployment shrinks with more than 200. 000 jobs created last month, we could see mortgage rates moving upward.  However, even very positive reports will continued to be tempered by international concerns over Greece’s bailout.

Graph Courtesy from NY Times in an article by Bob Tedeschi April 28, 2010.  Data provided by Jeff Carpenter, Director of Finance, GFI Mortgage Bankers, Inc.

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