Archive for Greece
Home Affordability Getting A Springtime Boost From Greece
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Home affordability is receiving a boost from across the Atlantic Ocean this spring.
For the third time in as many years, a weakening Eurozone is pushing May mortgage rates to new lows throughout Wisconsin and nationwide.
The story centers in Greece and begins in 2010.
2 years ago, it was uncovered that successive Greece governments had purposefully misreported the nation-state’s economic statistics in order to meet European Union standards. The fraudulent data had permitted Greek governments to spend beyond their means while hiding deficits from EU auditors.
The realization that Greece was heavy in debt with little means to repay its creditors resulted in a massive bailout from the IMF and the rest of the Eurozone nations. The terms for Greece said that, in order to receive its €110 billion aid package, Greece would be required to enact strict spending controls.
This is known as “austerity” and the deal was met with outrage by the Greek public. There’s been general social unrest ever since and, on May 6 of this year, Greece held a special “early election” to elect all 300 members to its legislature.
No party won majority in the elections.
7 different groups garnered seats in the parliament last week with anti-austerity groups faring well. It’s spurred concern that Greece will end its bid for fiscal restraint, and that Greece may choose to leave the 17-nation Eurozone.
The uncertainty surrounding Greece is helping U.S. mortgage rates to make new lows. As concerns mount for the future of Greece — and the Eurozone, in general — global investors seek safer markets for their money.
The U.S. mortgage-backed bond market is one such market.
With the implied backing of the U.S. government, mortgage-backed bonds are viewed as nearly risk-less and investors clamor for safety of principal during uncertain times. The boost in demand drives bond prices up and bond yields down, resulting in lower mortgage rates for home buyers and refinancing households of Lake Geneva.
So long as Greece struggles to form its government and flirts with a sovereign debt default, mortgage rates should continue to face downward pressure. U.S. rates may not fall week after week, but analysts expect any rise in rates to be muted.
What’s Ahead For Mortgage Rates This Week : February 21, 2012
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Mortgage markets worsened last week as the Eurozone moved closer to a bailout agreement with Greece, and the U.S. economy displayed more signs of growth.
In response, mortgage rates climbed last week.
Rate shoppers should not be surprised that rates ticked north. Since mid-2011, weakness in Greece has helped keep mortgage rates low and the same is true for a weak U.S. economy. Wall Street has sought “safe assets” as protection from risk and that’s driven mortgage rates down.
Now, the safe haven buying that served to anchor low rates appears poised to reverse.
Last month, it was shown, consumer spending rose to record levels and the housing market surpassed analyst expectation again. Homebuilder confidence is now at a 4-year high and Single-Family Housing Starts topped one-half million units for the second straight month.
Conforming mortgage rates in Wisconsin rose for the first time in a month last week. Unfortunately, few shoppers knew because Freddie Mac’s weekly mortgage rate survey failed to capture the change. The survey deadline was Tuesday. Rates started rising Wednesday morning.
Freddie Mac’s weekly mortgage rate survey put the average 30-year fixed rate mortgage unchanged at 3.87% for borrowers willing to pay 0.8 discount points plus a full set of closing costs.
Rates are higher today.
Beyond Greece and the U.S. economy, inflation is another reason mortgage rates are up. Inflation is the enemy of mortgage rates and, an on annual basis, the core Consumer Price Index registered 2.3% — it’s highest reading since 2008. The Fed expects inflation to ease later this year but if gas prices stay high, the Fed’s forecast may be wrong.
This week is holiday-shortened. Look for Greece to dominate headlines (again) and watch for housing data toward the end of the week. Existing Home Sales is released Wednesday. New Home Sales is released Friday.
For now, mortgage rates remain low. It’s a safe time to lock a long-term rate.
What’s Ahead For Mortgage Rates This Week : February 13, 2012
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Mortgage markets were mostly unchanged last week as Greece — once again — was front-of-mind for Wall Street investors. The nation-state is attempting to avoid a debt default, and has been attempting to avoid default since May 2010.
Early in the week, Greece reached a deal with European Union leaders to secure additional financial aid. By Friday, however, the deal was in doubt, as the EU leaders declared that the Greek Parliament would have pass new austerity measures before the aid would be released.
Austerity measures have been unpopular in Greece, giving rise to riots among citizens and resignations among politicians. Markets responded to the potential undoing of the debt deal by seeking safety in bonds — including U.S. mortgage-backed bonds.
The Greek debt default story has helped fuel low mortgage rates in Wisconsin. Once a final deal is reached, mortgage rates are likely to rise.
For now, though, mortgage rates remain at all-time lows.
According to Freddie Mac’s weekly mortgage rate survey, the average, conforming 30-year fixed mortgage rate held firm at 3.87% last week for mortgage borrowers willing to pay an accompanying 0.8 discount points plus applicable closing costs. 1 discount point is equal to one percent of your loan size.
For borrowers unwilling to pay discount points and/or closing costs, average mortgage rates are higher.
This week, data returns to the U.S. economic calendar.
Greece will still be in play, but the health of the U.S. economy will determine in which direction mortgage rates will go. There are two inflation reports due — the Consumer Price Index and the Producer Price Index.
The former is a “cost of living” indicator for U.S. households; the latter measures the same for business. Inflation is bad for mortgage rates so if either report comes in unexpectedly high, mortgage rates are likely to rise.
The same is true for Tuesday’s Retail Sales report.
Retail Sales account for close to 70% of total U.S. economic activity. An unexpectedly strong Retail Sales figure will suggest that the domestic economy is improving and that, too, would pressure mortgage rates up.
If you’re shopping for a mortgage, or floating one with your lender, consider locking in this week. Mortgage rates don’t have much room to fall and there’s much room to rise.
What’s Ahead For Mortgage Rates This Week : February 13, 2012
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Mortgage markets were mostly unchanged last week as Greece — once again — was front-of-mind for Wall Street investors. The nation-state is attempting to avoid a debt default, and has been attempting to avoid default since May 2010.
Early in the week, Greece reached a deal with European Union leaders to secure additional financial aid. By Friday, however, the deal was in doubt, as the EU leaders declared that the Greek Parliament would have pass new austerity measures before the aid would be released.
Austerity measures have been unpopular in Greece, giving rise to riots among citizens and resignations among politicians. Markets responded to the potential undoing of the debt deal by seeking safety in bonds — including U.S. mortgage-backed bonds.
The Greek debt default story has helped fuel low mortgage rates in Wisconsin. Once a final deal is reached, mortgage rates are likely to rise.
For now, though, mortgage rates remain at all-time lows.
According to Freddie Mac’s weekly mortgage rate survey, the average, conforming 30-year fixed mortgage rate held firm at 3.87% last week for mortgage borrowers willing to pay an accompanying 0.8 discount points plus applicable closing costs. 1 discount point is equal to one percent of your loan size.
For borrowers unwilling to pay discount points and/or closing costs, average mortgage rates are higher.
This week, data returns to the U.S. economic calendar.
Greece will still be in play, but the health of the U.S. economy will determine in which direction mortgage rates will go. There are two inflation reports due — the Consumer Price Index and the Producer Price Index.
The former is a “cost of living” indicator for U.S. households; the latter measures the same for business. Inflation is bad for mortgage rates so if either report comes in unexpectedly high, mortgage rates are likely to rise.
The same is true for Tuesday’s Retail Sales report.
Retail Sales account for close to 70% of total U.S. economic activity. An unexpectedly strong Retail Sales figure will suggest that the domestic economy is improving and that, too, would pressure mortgage rates up.
If you’re shopping for a mortgage, or floating one with your lender, consider locking in this week. Mortgage rates don’t have much room to fall and there’s much room to rise.
What’s Ahead For Mortgage Rates This Week : November 21, 2011
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Mortgage markets went unchanged last week as Wall Street traded on new debt stress within the Eurozone, and stronger-than-expected economic data here at home.
Rates moved very little from Monday to Friday and the storyline’s not expected to change much this week for today’s rate shoppers.
According to Freddie Mac, conforming 30-year fixed rate mortgages remain priced at 4.000% with 0.7 discount points on average, where 1 discount point equals one percent of the loan size. For people who prefer “zero-point” mortgages, expect a mortgage rate above 4.000%.
By contrast, loans with 1 point or more are priced below 4.000 percent.
However, in this holiday-shortened trading week, mortgage volatility should be up, and rates may finally break from the 4.000 benchmark we’ve hovered since November 1.
What’s unclear is whether rates will rise or fall.
For 8 months, we’ve talked of how events in Greece have influenced the U.S. mortgage market and, how each time Greece moved to the precipice of default, the U.S. mortgage bond market improved, causing mortgage rates to fall.
Last week, similar default concerns emerged for Italy and Spain. This applied downward pressure on U.S. mortgage rates, but a strong retail sales report; a better-than-expected New Home Sales data; and soaring homebuilder confidence renewed talk of domestic inflation in 2012 and beyond.
Inflation erodes the value of the U.S. dollar and leads to higher mortgage rates.
This week, we get a full set of data :
- Monday : Existing Home Sales
- Tuesday : FOMC Minutes; GDP; 5-Year Treasury Auction
- Wednesday : Jobless Claims; Personal Income and Outlays; Consumer Sentiment
In addition, Wednesday marks the deadline for the congressional “super-committee” tasked with finding $1.2 trillion in federal budget savings over the next 10 years. The committee was formed in the wake of August’s downgrade of U.S. federal debt by Standard & Poors.
If Congress fails to meet its goal in time, stock markets should suffer and mortgage rates may fall.
What’s Ahead For Mortgage Rates This Week : November 14, 2011
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Amid a dearth of new U.S. economic data, Eurozone developments led mortgage markets down in last week’s holiday-shortened trading week. Mortgage rates across Wisconsin worsened slightly, increasing week-over-week for the first time in a month.
Freddie Mac reports the average 30-year fixed rate mortgage at 3.99% with an accompanying 0.7 discount points. Discount points are loan fees, and 1 discount point is equal to 1 percent of your loan size.
Greece has dominated mortgage market headlines since February. As the nation-state aims to reign in its national spending, it has also adopted harsh austerity measures. The combination is meant to prevent future debt defaults, but global investors remain concerned that problems in Greece may spill over into other Eurozone nations.
As those concerns have grown, U.S. mortgage markets have benefited. This is because U.S. mortgage markets are backed by the U.S. government, and investors treat the U.S. mortgage market as “safe” compared to other security-types.
Safe investments are in high demand during uncertain times, often improving in price. This pattern is known as Safe Haven Buying and it’s one reason why mortgage rates tend to fall when the economy is sagging. Mortgage rates move opposite of mortgage bond prices.
This week, U.S. economic data returns, but markets will still be watching the Eurozone. Sunday, Italy changed leadership, in part, to restore market confidence in its ability to get its debt load under control.
Expect developments in Italy to sway U.S. mortgage rates this week. In addition, rates will respond to a rash of economic data and Fed speakers :
- Tuesday : Producer Price Index, Retail Sales, 5 Fed speakers
- Wednesday : Consumer Price Index, Housing Price Index, 2 Fed speakers
- Thursday : Housing Starts, Jobless Claims, 1 Fed speaker
Mortgage rates remain near all-time lows, with not much room to drop. If you’re shopping for a mortgage rates, therefore, consider locking in. As Greece and Italy show signs of moving forward, expect Safe Haven Buying to recede, and mortgage rates to rise.
What’s Ahead For Mortgage Rates This Week : November 7, 2011
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Mortgage markets improved last week as optimism for a Greek Bailout program faded, triggering a global flight-to-quality assets. Fear of a Eurozone rift outweighed positive economic remarks from the Federal Open Market Committee and an in-line U.S. jobs report.
Although the Federal Reserve said the economy had “strengthened somewhat“, a statement backed up by Friday’s Non-Farm Payrolls data which — with revisions — met analyst expectations, concern that Greece may not receive its aid caused mortgage to fall.
Conforming mortgage rates dropped throughout Wisconsin Monday and Tuesday, pushing rates to near their lowest levels of the year. Rates remained low through Friday.
According to Freddie Mac’s weekly mortgage market survey, the average 30-year fixed rate mortgage is 4.00% nationwide, plus closing costs and an accompanying 0.7 discount points.
A “discount point” is a one-time loan fee paid at closing, where 1 discount point is equal to 1 percent of your loan size.
As an example, 1 discount point on a $300,000 home loan costs $3,000.
This week, with no new economic due for release, the fate of mortgage rates in Lake Geneva real estate again depends on what develops in Europe. If Greece cannot reach accord within its own parliament, and cannot enact the austerity measures as dictated by its aid package, mortgage rates should fall this week, too.
However, if Greece can reach agreement and move forward, it will appease investors worldwide and U.S. mortgage rates should resume rising. Likely by a lot.
Remember : The U.S. economy has shown slow, steady improvement of late and, normally, this would result in higher mortgage rates for consumers. That’s not what we’ve experienced, however. Instead, fears of a Greek debt default have dominated headlines.
As soon as markets are certain that Greece has a way forward, attention will return to the U.S. economy, and mortgage rates are expected to rise.
Therefore, float your mortgage rate with caution this week. Depending on global events, mortgage rates may rise or fall. Eliminate your interest rate risk. Lock your rate today.
What’s Ahead For Mortgage Rates This Week : October 31, 2011
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Mortgage markets moved across a wide range last week before, ultimately, finishing unchanged. The bailout of Greece both dominated headlines and dictated market direction.
It was a wild ride for rate shoppers.
Early in the week, mortgage rates spiked. Eurozone leaders expressed optimism that a deal for Greece’s solvency would be made, rhetoric to which Wall Street responded selling mortgage bonds.
When markets closed Wednesday, conforming mortgage rates in Wisconsin were at their highest levels since September.
However, when markets opened Thursday, rates began to reverse lower. Investors deemed the details of the Greece fuzzy, and, once again, sought safety in the U.S. mortgage bond market.
As such, rates fell through Friday afternoon, closing the week precisely where they started.
This week’s market action figures to be similarly busy. In addition to Friday’s release of the October Non-Farm Payrolls data, the Federal Open Market Committee starts a 2-day meeting Tuesday.
It’s the FOMC’s 7th scheduled meeting of the year.
The FOMC is the Federal Reserve’s monetary policy-setting group. It does not set mortgage rates for citizens of Lake Geneva mortgage , but it can exert an influence. For example, if the FOMC votes to increase the size of its Operation Twist, mortgage rates may respond favorably, causing rates to fall.
Conversely, if the FOMC scales back the size of its program because of inflationary concerns or otherwise, mortgage rates should rise.
The Federal Open Market Committee meeting ends at 2:15 PM ET Wednesday and mortgage rates are typically volatile in the hours surrounding the group’s adjournment. If you’re floating a mortgage rate or deciding whether to lock, keep this date and time in mind.
What’s Ahead For Lake Geneva Real Estate Mortgage Rates This Week: July 11, 2011
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Mortgage markets improved in roller coaster-like trading last week. And, not surprisingly, the week’s two big stories were the same two stories roiling mortgage markets since March — Greece and Jobs.
In both instances, rate shoppers won. Conforming mortgage rates in Wisconsin improved for the first time in 3 weeks last week.
Early in the week, mortgage rates fell as doubts resurfaced on the just-completed Greece aid package. Although an agreement had been reached by the Greek Parliament, investors are wondering if it’s a bona fide solution, or delaying an inevitable default.
Talk like this triggers a flight-to-quality, and last week, it led mortgage rates lower.
Then, mid-week, a strong preview of the Friday jobs report led to a reversal. Mortgage markets sold off sharply with the prospect of a blow-out Non-Farm Payrolls number. Analysts upped their estimates 50% — from 80,000 net new jobs created in June to 120,000 — and mortgage rates spiked in anticipation.
The rate rise was short-lived, however, because when the actual jobs report was released, it showed just 14,000 jobs added in June. Mortgage markets reversed and mortgage rates sunk to their best levels in 2 weeks.
This week, Greece should remain in the headlines, but there’s other rate-changing news, too:
- Tuesday : FOMC Minutes
- Wednesday : 10-Year Treasury Auction
- Thursday : PPI; 30-Year Treasury Auction; Jobless Claims
- Friday : CPI; Consumer Sentiment
If you’re still floating a mortgage rate, today marks a good week to lock. Mortgage rates could fall this week and next, but there’s more room for rates to rise than to fall.
Lock up today’s low rates while they’re still available.
Lake Geneva Real Estate Mid-Year Review: Were The Experts Right About The Market?
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The year is half-over. It’s an opportune time to take stock of analyst predictions made at the start of the year, and to recognize that the “experts” can be wrong as often as they are right.
For as much experience and authority an expert brings to the conversation, though, nobody can accurately predict the future.
As such, there’s often disagreement.
Looking back to December, some housing analysts called for a market rebound this year; while others called for a fall. With respect to mortgages, some said rates had nowhere to go but up; while others expected more dips.
As a layperson, how do you know who will be right?
In short, you can’t.
Predictions are a tricky business because they’re guesses about the future based on the world as it exists today. When the predictions listed earlier were made, the world was a different place.
A lot has changed since January:
- Slowing job growth has suggested to slower U.S. economic growth
- Food and energy costs have spiked, adding inflationary pressures to the economy
- Eurozone debt issues have grown, punctuated by a near-Greek default
- Tsunamis have caused widespread damage in Japan
- Earthquakes, floods and volcanoes have harmed economic output
None of these events had occurred as of December, when the original predictions were made. Yet, each of these developments has made a deep impact on housing, and on the economy.
So, what’s a Lake Geneva mortgage homeowner to do? Think of the present instead.
First, mortgage rates are low today — extremely low by historical standards. Second, home values have been slow to rebound through most U.S. markets. Combined, these factors have made homes more affordable than it any time in recorded history. It’s not only cheap to buy a home right now, it’s cheap to refinance one, too.
Analysts are saying the home prices will rise this year, and Lake Geneva mortgage rates will, too. Those predictions may ultimately be proven true. Until the future arrives, though, those predictions are just guesses.