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Archive for Mortgage Rates

Jobs reportMortgage markets worsened for the third straight week last week as the U.S. economy showed new signs of expansion, and as little new news came from Europe.

August has been a rough month for rate shoppers. Since the start of the month, mortgage rates in Lake Geneva have climbed steadily and are now at a 7-week high.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the 30-year fixed rate mortgage is 3.62% nationwide, on average, for homeowners willing to pay 0.6 discount points plus a full set of closing costs. 1 discount point is equal to one percent of your loan size.

Homeowners not wishing to pay discount points are seeing 30-year fixed rate mortgage rates as high 4.00%.

These are the highest mortgage rates since Independence Day.

This week, mortgage rates may continue to move higher. There is a bevy of economic data set for publication in addition to the Federal Reserve’s release of its July/August meeting minutes. Mortgage rates are expected to get more bumpy as the week progresses.

No data will be released Monday or Tuesday. During these first two days, expect momentum and sentiment to drive markets. Lately, both have favored “higher rates”.

Then, Wednesday morning, the National Association of REALTORS® releases its July Existing Home Sales report. Strong numbers will likely lead mortgage rates higher. That is, until that day’s 2:00 PM ET release of the Fed Minutes. This will be the week’s big market-mover.

Prior to its last meeting, the FOMC had said economic stimulus would be warranted given certain conditions and Wall Street took that to mean that the Federal Reserve was close to adding new stimulus. When the Fed did not add said stimulus August 1 as expected, mortgage rates rose.

The Fed Minutes will provide insight into some of the debate the shaped the discussion/non-discussion of new stimulus and, depending on what market sees, mortgage rates may rise or fall Wednesday — perhaps by a lot.

Then, on Thursday, the government releases its New Home Sales data for July. This, too, can influence mortgage rates.

If you’re not yet locked on a mortgage, it may be prudent to lock your rate in. Mortgage rates have trended higher this month, and may continue to move in that direction.

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30-year fixed rates rise

Mortgage rates in Williams Bay keep on rising.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, for the third straight week, the 30-year fixed rate mortgage rate rose, this time tacking on 3 basis points on a week-over-week basis to 3.62%, on average, nationwide. The 3.62% mortgage rate is available to mortgage applicants willing to pay 0.6 discount points plus a full set of closing costs.

Freddie Mac’s published mortgage rates are compiled from a 125-bank survey.

Looking back, it appears that national 30-year fixed rate mortgage rates bottomed at 3.49% in late-July. In the weeks leading up to that bottom, mortgage rates had dropped in 11 of 12 weeks. Since then, though, rates have climbed steadily, moving to a 7-week high, depending on where you live. 

Mortgage rates vary by region. As reported by Freddie Mac, mortgage applicants in the South Region currently pay the highest rates. Applicants in the North Central currently pay the lowest.

  • Northeast Region : 3.62% with 0.6 discount points
  • West Region : 3.59% with 0.6 discount points
  • Southeast Region : 3.68% with 0.6 discount points
  • North Central Region : 3.58% with 0.6 discount points
  • Southwest Region : 3.66% with 0.6 discount points

Meanwhile, mortgage rates don’t figure to drop in the coming weeks. The same forces that drove mortgage rates down between January-July of this year are the same ones that are driving rates up today — expectations for new Federal Reserve-led stimulus.

Earlier this year, the economy was stalling; growing slowly, but not convincingly. This led to Wall Street speculation that the Federal Reserve would implement a bond-buying program that would lead mortgage rates down, among other outcomes. The Fed said it would do what is necessary to keep the economy on track which only served to fuel such speculation.

Last month, however, at the Federal Open Market Committee, Ben Bernanke & Co. did not add new stimulus, and seemed content to take a “wait-and-see” approach with the economy. And, since then, Europe appears to have put itself on-track and the U.S. economy has shown signs of expansion.   

This August rise in rates is Wall Street reversing its bets; making plans for no new stimulus at all.

Mortgage rates so remain low, though. If you’ve yet to join this year’s refinance boom, or if you’re hunting for a home, consider locking something in. In a few weeks, mortgage rates may be higher still.

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30-year mortgage ratesMortgage markets worsened last week as the investors moved back into risk-taking mode. Better-than-expected economic data in the U.S. plus a general feeling that the ongoing Eurozone issues will be soon be resolved (or lessened) contributed to a second straight week of rising mortgage rates.

One such data point was the weekly Initial Jobless Claims report.

According to the U.S. Department of Labor, the number of U.S. workers filing for first-time unemployment benefits unexpectedly dropped 6,000 from the week prior on a seasonally-adjusted basis. Economists had expected a week-over-week increase.

In addition, government-backed mortgage securitizers Fannie Mae and Freddie Mac both announced quarterly profits last week of a combined $8.3 billion. This, too, reflects well on the economy because both companies attributed strong results to a recovering housing market.

Conforming rates in Delavan rose for the second straight week, according to Freddie Mac’s weekly mortgage rate survey.

The 30-year fixed rate mortgage rate now averages 3.59% nationwide for mortgage applicants willing to pay 0.6 discount points plus a complete set of closing costs where 1 discount point is a loan fee equal to one percent of your loan size.  This is a 10 basis point increase from late-July, when rates averaged 3.49%.

The 15-year fixed rate mortgage also moved higher, registering 2.84% last week after recently posting at 2.80%, on average.

This week, there won’t be much data to move markets. We’ll see the release of the Producer Price Index and the Consumer Price Index — two inflationary gauges for the U.S. economy — as well as July’s Retail Sales report. Beyond that, however, there won’t be much. Therefore, be wary of day-to-day momentum in the mortgage bond market.

Between January and July, momentum took mortgage rates lower; eventually to an all-time low. Since August 1, however, that momentum has reversed.

If you’re floating a mortgage rate or are otherwise not yet locked, get with your loan officer quickly. Mortgage rates may fall between today and Friday, but there’s much more room for rates to rise instead.

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Unemployment RateMortgage bonds worsened last week in a news- and event-heavy week. A series of non-action from the world’s central banks — including the Federal Reserve — plus a better-than-expected jobs report pushed mortgage rates to their highest levels in more than a month.

Conforming mortgage rates rose in Delavan and nationwide last week.

The week wasn’t without drama, however. Mortgage rates carved out a wide range.

When the week opened, mortgage markets were in a rally mode. The European Central Bank had previously said that it would do whatever was needed to preserve the European Union. However, details failed to emerge on that plan, leading to a “risk off” scenario in which investors moved money into the relative safety of bonds, a class which includes mortgage-backed securities.

Mortgage rates dropped Monday and Tuesday.

Then, Wednesday, beginning at 2:15 PM ET, mortgage rates spiked. The timing coincides with the end of the Federal Open Market Committee’s scheduled 2-day meeting and its statement to the markets. In it, the Fed said it will leave the Fed Funds Rate unchanged in its target range of 0.000-0.250%, and that it will not add new stimulus to the markets or the economy.

Wall Street had expected the Federal Reserve to launch new support for bond markets and, when the Fed chose against it, bond markets sold off, sending mortgage rates higher.

Thursday, mortgage rates, once again, slipped. This occurred after the European Central Bank emerged from a meeting with no clear plan to “save the Euro”. Markets believe the ECB will take some action, but because that action won’t happen right away, investors once more poured into the relative safety of mortgage bonds.

Lastly, on Friday, the U.S. Non-Farm Payrolls report showed 163,000 net new jobs added in July, far exceeding analyst expectations of 100,000 net new jobs. The surprise result sent stock markets soaring and bond markets sinking. The 30-year fixed rate mortgage rose all day, and is now at its highest level in close to 6 weeks.

Freddie Mac reported the 30-year fixed rate mortgage at 3.55% last week. It’s higher than that now.

This week, there isn’t much economic data on which for markets to move so expect to see rhetoric and momentum take center stage. Fed Chairman Ben Bernanke makes two public appearances and Eurozone leaders will continue to be in the news.

If you’re floating a mortgage rate right now, a prudent move may be to lock it.

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30-year fixed rate mortgage rateMortgage rates couldn’t fall forever, it seems.

This week, for the first time since mid-June, the 30-year fixed rate mortgage rate climbed on a week-over-week basis, moving 6 basis points to 3.55%, on average, nationwide.

According to Freddie Mac, 3.55 percent is the highest average rate at which the benchmark product has been offered in close to 4 weeks.

The Freddie Mac published mortgage rate is available for prime borrowers willing to pay a full set of closing costs plus an accompanying 0.7 discount points.

Discount points are a one-time, upfront mortgage loan fee to be paid at closing where 1 discount point is equal to one percent of your loan size. In this way, a Williams Bay home buyer who pays one discount point at closing will be responsible for an additional $1,000 in closing costs per $100,000 borrowed.

However, although Freddie Mac says that the average mortgage rate is 3.55%, not everyone who applies for a conforming mortgage will get access to that rate. This is because Freddie Mac’s published rates are the ones offered to “prime” borrowers, the definition of which often includes :

  • Top-rated credit scores, typically 740 or higher
  • Verifiable income using two year’s of tax returns 
  • Home equity of at least 25%

Borrowers not meeting the above criteria should expect slightly higher mortgage rates and/or discount points. In some cases, such as when an applicant’s credit score is below 680, mortgage rates may be higher by as much as 0.500%.

Although mortgage rates are up this week, though, the impact on home affordability is muted. Mortgage payments rose just $3 per month per $100,000 borrowed this week as compared to last week. 3.55% remains the third-lowest Freddie Mac rate of all-time.

Mortgage rates remain unpredictable and there’s no guarantee for low rates to last forever — much less through August. If today’s mortgage rates meet your needs, therefore, consider locking something in.

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Lake Geneva Mortgage - ECB meets ThursdayLake Geneva real estate mortgage markets booked major losses last week after European leaders spoke of their determination to preserve the European Union.  Lake Geneva mortgage rates jumped Thursday and Friday as investors sold positions of relative safety, including bonds, and moved their money into stock markets.

Mortgage rates closed the week at a 14-day high and, if not for last week’s GDP figures, conforming mortgage rates in Lake Geneva, Wisconsin would likely have closed even higher.

The Commerce Department said GDP slipped to +1.5% last quarter, down from +2.0% from January-March.  The slowdown suggests that the U.S. economy may not meet analyst’s 2012 projections, and gives the market hope that the Federal Reserve will add new stimulus at its scheduled, 2-day meeting this week.

The Fed meeting is just one of the story lines affecting mortgage rates this week.  For rate shoppers in Williams Bay, Wisconsin and nationwide, it will be a risky week to float a rate.

For a brief run-down of the events of the week :

  • Wednesday afternoon, the Federal Open Market Committee adjourns. Wall Street believes that the economy has slowed enough to justify new market stimulus. It’s unclear whether the Federal Reserve agrees.  If new stimulus is added, and if the package is sufficiently large, mortgage rates should drop. Otherwise, mortgage rates should rise.
  • Thursday, the European Central Bank meets, after which the ECB is expected to announce an aid package for Spain, and a general plan to hold the European Union together.  If the plan is well-received by markets, mortgage rates will rise.  If the plan is panned, mortgage rates will fall.
  • Friday, the Bureau of Labor Statistics releases its July Non-Farm Payrolls report.  Economists expect 100,000 jobs created in July. If the actual figure falls short, mortgage rates should fall.

It’s important to understand that each of these three events represents major risk to rate shoppers.  Mortgage rates will be volatile this week, and that volatility is expected to continue until mid-September, at minimum.

If you’re shopping for a mortgage, therefore, the longer you wait to lock, the bigger your mortgage rate risk.  Especially with rates at all-time lows; rates have been falling for so many weeks, there’s a lot of ground to cover on the way back up.

Freddie Mac Mortgage Rates

Another week, another new low for mortgage rates. 

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the 30-year fixed rate mortgage rate fell 3 basis points to 3.53% last week nationwide. The 3.53% mortgage rate is available to mortgage applicants who are willing to pay 0.7 discount points, on average, plus a full set of closing costs.

One year ago, the 30-year fixed rate mortgage rate was 4.52%. Today, it’s nearly one percent lower. For every $100,000 borrowed at today’s rates as compared to July 2011, a mortgage applicant will save $57 per $100,000 borrowed, or $684 per year.

Over 30 years of a loan, those savings add up.

30-year fixed rate mortgage rates have now dropped through 5 consecutive weeks, and in 11 of the last 12 weeks, a streak dating back to late-April. Depending where you live, however, you may not get access to 3.53% mortgage rates. As Freddie Mac’s survey reveals, mortgage rates vary by region.

Last week, mortgage rates by region were listed as follows :

  • Northeast Region : 3.56% with 0.7 discount points 
  • West Region : 3.49% with 0.7 discount points
  • Southeast Region : 3.58% with 0.7 discount points
  • North Central Region : 3.52% with 0.7 discount points
  • Southwest Region : 3.56% with 0.7 discount points

Homeowners and home buyers in California, Oregon and Washington, therefore, received the lowest rates in the country, on average. Owners and buyers in Florida and Georgia, by contrast, received the highest rates.

This week, though, mortgage rates are lower everywhere.

With Spain at risk for a sovereign default and China warning of slow growth, mortgage rates began the week by falling yet again. If you’re eligible to refinance, therefore, the timing may be right to lock a mortgage rate. Similarly, if you’re an active home buyer in Williams Bay , today’s low rates will bolster your maximum purchasing power.

Talk to your loan officer about capitalizing on the lowest rates of all-time. Rates throughout Wisconsin may not rise beginning next week, but when they do rise, they’ll likely rise quickly.

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Freddie Mac mortgage ratesMortgage markets improved last week on expectations for new Federal Reserve stimulus, plus ongoing concerns about the European Union’s future.

Mortgage-backed bonds climbed to new all-time highs, which helped conforming mortgage rates drop to new all-time lows.

The average 30-year fixed-rate mortgage rate is now 3.53% nationwide, according to government mortgage-backer Freddie Mac’s weekly mortgage rate survey. The 3.53% rate is available to mortgage applicants willing to pay 0.7 discount points plus a full set of closing costs where 1 discount point is equal to 1 percent of your loan size.

The 15-year fixed-rate mortgage rate dropped last week, too, falling to 2.83% nationwide, on average.

Even as mortgage rates in Williams Bay drop, however, rate shoppers should be wary of a potential rate reversal. This is because July’s rapid drop in mortgage rates, mostly, has been fueled by market speculation.

First, with employment data lagging, inflation pressures low, and slower-than-expected economic growth, Wall Street now believes that the Federal Reserve will launch its third round of quantitative easing next week, a move that would likely include large-scale mortgage bond purchases.

New, Fed-led demand for mortgage bonds would lead mortgage rates lower for homeowners and rate shoppers throughout Wisconsin.

And, second, investors are preparing for a potential sovereign debt default in Spain, the Eurozone’s fourth largest economy. The Greek economy, by contrast, which faces similar struggles, is 5 times smaller than Spain’s. A Spain default, too, would likely lead U.S. mortgage rates lower.

That said, if neither event comes to pass — if the Fed passes no new stimulus and Spain receives an ample-sized bailout — mortgage rates would be expected to rise as Wall Street re-adjusts its expectations for the future.

The change would happen quickly, too.

This week, markets will continue to take their cues from the Fed and the Eurozone, but with an eye toward U.S. housing data. The housing market is linked to economic growth so strong results may lead mortgage rates higher.

The June New Home Sales report is released Wednesday; the June Pending Home Sales Index is released Thursday.

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Retail SalesMortgage markets improved last week on slowing economic growth worldwide and investor thirst for “safe” investments.

China’s economy posted to its weakest growth since 2009 and economic activity in the Eurozone continued to sag. Both events resulted in a broad-based sell-off of equities and non-U.S. bonds. Mortgage bonds benefited from last week’s flight-to-quality as bond pricing moved higher.

When mortgage bond prices rise, mortgage rates fall.

According to Freddie Mac, the average 30-year fixed rate mortgage rate is now down to 3.56% nationwide for borrowers willing to pay 0.7 discount points plus a full set of closing costs. The 15-year fixed rate mortgage fell to 2.86%, on average.

Both mortgage rates are all-time records, rewarding today’s Delavan home buyers and mortgage rate shoppers. The principal + interest mortgage payment on a $200,000 mortgage is now just $904.80 per month.

Low rates may not last forever.

One reason why low rates may not last is that, also last week, the Federal Reserve released the minutes from its June 2012 meeting. In it, the Fed appeared more ready to add new market stimulus than Wall Street had expected. The market’s initial reaction was to push mortgage rates higher because new stimulus would encourage risk-taking among traders, and invite inflation.

This week will see the release of a number of key data points for the U.S. economy :

  • Monday : Retail Sales
  • Tuesday : Consumer Price Index
  • Wednesday : Housing Starts
  • Thursday : Existing Home Sales; Initial Jobless Claims

If any of these reports show better-than-expected results, mortgage rates are expected to rise. In addition, Federal Reserve Chairman Ben Bernanke begins a 2-day congressional testimony beginning Tuesday. The chairman’s words can move mortgage markets.

Mortgage rates remain at historical loans. If you have not yet locked a mortgage rate, talk to your loan officer soon.

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Lake Geneva Real Estate Unemployment RateLake Geneva mortgage markets improved last week as concerns for U.S. economic growth wrestled attention away, albeit temporarily, from the Eurozone.  Mortgage bonds improved to record prices, lowering mortgage rates across Lake Geneva, Wisconsin and nationwide.

The biggest news of last week’s holiday-shortened trading week was the Friday release of last month’s Non-Farm Payrolls report.

In it, the Bureau of Labor Statistics showed that the economy added 80,000 net new jobs in June, and that the initial tallies for April and May were overstated by a combined two thousand jobs.  Wall Street had expected to see at least 100,000 jobs created in June.

When the actual number of jobs fell short of expectations, stock markets sold off and bond markets gained.

According to Freddie Mac, last week’s 30-year fixed rate mortgage rate averaged 3.62% nationwide for borrowers with conforming mortgages willing to pay 0.8 discount points at closing, plus a full set of closing costs.

For every $100,000 borrowed on a 30-year fixed rate mortgage, you’ll pay just $456 per month — the lowest in history.

15-year fixed rate mortgages averaged 2.89% with 0.7 discount points.  Remember Walworth State Bank does NOT “typically” charge any discount points.

Both products set record-low mortgage rates, based on Freddie Mac’s data. However, by the week’s end, after the jobs report, both rates had moved lower still to the benefit of Williams Bay home buyers and rate shoppers.

This week, with little new economic data set for release, mortgage markets are expected to turn attention back to Europe.  Early Monday, Greece’s new government won a key confidence vote in Parliament which ends a period of uncertainty during which the nation-state was without a clear leader.

This is one step toward resolving the debt issues that have plagued Greece but not the last step.  How markets respond to Greece’s next actions will, in part, shape the direction of mortgage rates here in the United States. With optimism, mortgage rates will rise.

Should Greece falter, mortgage rates will fall.

Mortgage rates are expected to remain volatile for at least the next 3 weeks.  If you’re floating a mortgage rate or wondering whether it’s time to lock a rate with your lender, consider locking in.  With mortgage rates at 3.62% on average, rates have much more room to rise than to fall.