Apr 13, 2012 | Mortgage Rates
After a brief surge north of 4 percent last month, mortgage rates have settled down, near their lowest levels of all-time.
According to Freddie Mac’s weekly Primary Mortgage Market Survey, for applicants willing to pay 0.7 discount points plus a complete set of closing costs, the average 30-year fixed rate mortgage rate fell to 3.88 percent this week.
0.7 discount points adds $700 to your mortgage closing costs for each $100,000 borrowed.
Mortgage rates are down this week on “safe haven” buying. The move is triggered by Wall Street’s concern that Spain and Italy will have trouble servicing their respective sovereign debt. In response, investors are selling risk-heavy assets and using the proceeds to purchase U.S. government-backed bonds.
This creates demand for mortgage bonds which, in turn, pressures mortgage rates lower.
The storyline is similar to what transpired in Greece last year, and, at least for now, it gives Massachusetts home buyers reason to cheer. So long as economic uncertainty remains, mortgage rates may stay low.
Of course, like all things in real estate, though, mortgage rates are local. (more…)
Apr 10, 2012 | The Economy
Americans continue to get back to work.
Last Friday, in its Non-Farm Payrolls report for the month of March, the Bureau of Labor Statistics announced 120,000 net new jobs created, plus combined revisions in the January and February reports of +4,000 jobs.
The March report marks the 18th straight month of job growth nationwide — the first time that’s happened in 5 years.
The Unemployment Rate dipped in March, too, falling one-tenth of one percent to 8.2%. This is its lowest national Unemployment Rate since February 2009.
Clearly, the jobs market is moving in the right direction. Yet, after the Non-Farm Payrolls report was released Friday morning, stock markets dropped and bond markets gained — the opposite of what a casual market observer would expect.
It happened because, although job growth was strong, Wall Street decided it just wasn’t strong enough. The market expected 200,000 jobs created in March at least and the actual reported figure fell short. (more…)
Apr 5, 2012 | The Economy
If you’re out shopping for a home this week, or trying to lock a mortgage rate, with Friday comes home affordability risk. Consider locking your mortgage rate today.
The March Non-Farm Payrolls report is due for release Friday morning and mortgage rates are expected to move. Unfortunately for the home buyers and rate shoppers of Worcester County area , we can’t know in which direction that will be.
The prudent play may be to lock your mortgage rate today.
On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report. More commonly called “the jobs report”, the release is a bona fide market-mover, month after month.
Depending on how the March jobs data reads, FHA and conforming mortgage rates could rise — or fall — by a measurable amount post-release. This is because today’s mortgage market is closely tied to the economy, and the economy is closely tied to job growth.
The connection between jobs and mortgage rates is basic.
More workers leads to higher levels of consumer spending (more…)
Apr 4, 2012 | Federal Reserve
The Federal Reserve has released the minutes from its last FOMC meeting, a 1-day affair held March 13, 2012. Mortgage rates in Worcester County area are rising on the news.
For the un-indoctrinated, 3 weeks after it meets, the Federal Open Market Committee, the sub-group within the Federal Reserve that votes on U.S. monetary policy, publishes its meeting minutes.
Similar to the minutes from a corporate event, or condominium association meeting, the Fed Minutes recounts the conversations and debates that transpired throughout the meeting.
The Fed Minutes is a lengthy publication, often filling 10 pages or more. By contrast, the more well-known publication from the FOMC — its post-meeting press release — tends to span 6 paragraphs or less.
The extra detail contained within the Fed Minutes is Wall Street fodder, especially given the current economic uncertainty. Investors look to the Federal Reserve for clues about what’s next for the U.S. economy.
Lately, the minutes has made an out-sized impact on mortgage rates. The Fed’s words continue to swing the mortgage-backed bond market.
Today is no different.
March’s Fed Minutes is a dense one and markets are reacting. (more…)
Apr 3, 2012 | Mortgage Guidelines
Planning to use an FHA-backed mortgage for your next home loan? You might want to get your application in gear today.
Beginning next week, the Federal Housing Administration (FHA) is changing the way it charges mortgage insurance to U.S. homeowners. For the fourth time since 2010, FHA mortgage insurance premiums are rising for all FHA-backed homeowners.
For FHA Case Numbers assigned on, or after, Monday, April 9, 2012, there are two planned changes.
First, FHA Upfront Mortgage Insurance Premiums (UFMIP) will increase by 75 basis points to 1.75%, or $1,750 per $100,000 borrowed. Upfront Mortgage Insurance Premium is paid at closing, and typically added to an FHA borrower’s loan size.
The current UFMIP rate is 1.000 percent.
Second, annual FHA mortgage insurance premiums are rising. All new FHA-backed loans will be subject to a 10 basis point increase in annual mortgage insurance premiums, costing homeowners an (more…)
