Archive for Mortgage Rates
Fed Minutes Causes Lake Geneva Real Estate Mortgage Rates To Rise Suddenly
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The Federal Reserve has released the minutes from its last FOMC meeting, a 1-day affair held March 13, 2012. Lake Geneva real estate mortgage rates 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 Lake Geneva 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. The text shows a central bank softly divided on future U.S. economic policy, and in debate about whether existing market stimulus should be removed.
The Fed has said that it’s expecting high levels of unemployment and low levels of inflation in the coming months, an outlook that leaves little reason to introduce a third round of stimulus. This is the primary reason why mortgage rates in Geneva National have been climbing since the Fed Minutes’ release.
Since mid-March, mortgage rates dropped on speculation that the Federal Reserve would introduce a mortgage bond purchase program this quarter. Today, those expectations have reversed.
According to the minutes, the Federal Reserve believes that additional market stimulus would only be necessary “if the economy lost momentum”, or if inflation remained too far below 2 percent per year. Currently, Core PCE — the Fed’s preferred gauge of inflation — is running slightly below 2 percent.
The Federal Reserve’s next scheduled meeting is April 24-25, 2012 — its third of 8 scheduled meetings this year.
What’s Ahead For Lake Geneva Real Estate Mortgage Rates This Week: February 28, 2011
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Lake Geneva real estate mortgage markets improved last week as Wall Street’s concerns about the Middle East trumped its fears of inflation. Conforming and FHA mortgage rates in Wisconsin fell to a 3-week low.
Last week marked the second straight week in which mortgage rates fell, a streak that follows four straight weeks of climbing mortgage rates.
It’s been a bout of good fortune for rate shoppers and home buyers.
In addition, according to Freddie Mac’s weekly mortgage rate survey, the average spread between conforming 30-year fixed rate mortgages and 5-year ARMs has widened further.
The two benchmark products are now separated by 1.15%. It’s the largest interest rate gap in recent history; one that yields a monthly payment difference of $68 per $100,000 borrowed.
This week, it’s unclear in what direction mortgage rates will go.
On one side, there’s ongoing unease related to protests in Libya and its neighbors, and that’s driving safe haven buying.
“Safe haven buying” describes when investors flee risky situations and put their money in the safest places possible. Mortgage bonds are one such place, so when safe haven buying is in effect, bond demand is high so bond yields (i.e. mortgage rates) fall.
On the other side, inflation is ramping up.
Recent economic data shows that the economy is expanding, and the Federal Reserve is maintaining its accommodative growth policies. Therefore, this week, the key economic event will be Friday’s jobs report. If job creation is high, expect inflation fear to re-ignite, and Lake Geneva real estate mortgage rates to rise.
Another risk factor for this week’s rate shoppers is that tensions begin to settle in the Middle East, or that Wall Street gets more comfortable with rising oil prices. If that happens, safe haven buying will subside and mortgage rates will resume rising.
There appears to be more reasons for mortgage rates to rise this week than for them to fall. Plan accordingly.
If you have not locked a mortgage rate yet, this week may represent your last chance to get a low one. Talk to your loan officer and make a plan.
What’s Ahead For Lake Geneva Mortgage Rates This Week: October 4, 2010
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For the third straight week, Lake Geneva mortgage markets showed little conviction in the face of contrasting data. Mortgage bonds ended the week slightly better, but mortgage rates did not.
Conforming mortgage rates in Lake Geneva, Wisconsin were up-and-down all week before ending the week with a slight worsening. The inter-day volatility has come to characterize the current mortgage market.
In part, rates are jumpy because of data; it’s unclear when the economy is expanding or contraction — despite the “official call” of the recession’s end in June 2009.
Consider the conflicting reports from last week. Separate Consumer Confidence reports showed sentiment falling in September, but on the other hand:
- Initial jobless claims dropped 3%
- Household income is shown to be rising
- GDP is improving year-over-year
In other words, the economy is in recovery, but the average Lake Geneva real estate citizen isn’t believing it. That causes purse-strings to stay tight, thereby retarding economic growth.
Wall Street is struggling with the contrast, and constantly changing its outlook. It’s making mortgage rates tough to pin down and this week should reflect that. In addition to a home sales report and new consumer confidence data, the government prints its market-moving Non-Farm Payrolls report.
More commonly called “the jobs report,” Non-Farm Payrolls details the workforce, its size, and its Unemployment Rate. There’s expected to be little change from August, a month considered “fair” by recent employment standards. If the jobs report shows improvement and/or strength, look for mortgage rates to rise. If the report does deterioration and/or weakness, look for Lake Geneva real estate mortgage rates to fall.
The Non-Farm Payrolls will be released Friday at 8:30 AM ET.
What’s Ahead For Lake Geneva Mortgage Rates This Week: September 27, 2010
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Lake Geneva Real Estate Fed Funds Rate September 2007
Lake Geneva mortgage markets improved last week as markets digested a bevy of data from the housing sector, plus the scheduled Federal Open Market Committee meeting.
In back-and-forth trading, conforming Lake Geneva mortgage rates bottomed out Wednesday before rising through Friday’s afternoon close. Rates still managed to eke out improvement on the week overall.
According to Freddie Mac, Lake Geneva real estate mortgage rates remain near their lowest levels of all time.
Despite low rates, however, rate shoppers are finding it a challenge to lock the “best price.” This is because Wall Street is conflicted about the future of the U.S. economy and, as a result, mortgage pricing has been extra volatile.
For as much data that points to economic growth, there are numbers that suggest a pullback, too. Traders are undecided in either direction and mortgage pricing reflects it. It’s not uncommon for mortgage rates to vary by as much as 3/8 percent in a given week.
This week, without much new data due for release, prepare for even swifter swings in Lake Geneva rates. In the absence of “numbers,” momentum- and trend-trading should amplify the market’s normal drops and spikes.
A sampling of the week’s economic data includes Tuesday’s Consumer Confidence report and Case-Shiller Index, Thursday’s Jobless Claims and Gross Domestic Product data, plus Friday’s consumer income and spending figures.
Notably missing from the week’s economic calendar is the jobs report which is typically issued on the first Friday each month. The release is delayed a week to October 8.
If you’re still floating a Lake Geneva mortgage rate or have yet to commit to a refinance, consider that mortgage rates are primed to rise. They’ve been falling for 22 weeks and when the market turns, it’s expected to turn quickly.
Talk to me about your refinance options while mortgage rates are still low.
The Federal Open Market Committee adjourns from its 6th scheduled meeting of the year today, and 7th overall.
Upon adjournment, Federal Reserve Chairman Ben Bernanke will release a formal statement to the market. In it, the Fed is expected to announce “no change” to the Fed Funds Rate.
Currently, the Fed Funds Rate is within a target range of 0.000-0.250 percent. It’s been at this same level since December 2008.
Note that the Feds Funds Rate is not “a mortgage rate” — nor is it a a consumer rate of any kind. The Fed Funds Rate is a rate that defines the cost of an overnight loan between banks. And, although the Fed Funds Rate has little direct consequence to everyday Lake Geneva real estate homeowners, it is the basis for Prime Rate, the interest rate on which most consumer cards are based, plus many business loans, too.
Therefore, because the Fed Funds Rate won’t change today, neither will credit card rates. Mortgage rates, however, are a different story. Lake Geneva mortgage rates should change today — regardless of what the Fed does.
It’s more about what the Fed says.
In its statement, the Federal Reserve will highlight strengths and weaknesses in the economy, and threats to growth over the next few quarters. Depending on how Wall Street interprets these remarks, Lake Geneva real estate mortgage rates may rise or fall.
If the Fed’s comments signal better-than-expected growth, bond markets should lose and mortgage rates should rise. Conversely, if the Fed’s comments signal worse-than-expected growth, mortgage rates should fall.
If you’re actively shopping for a Lake Geneva mortgage, it may be prudent to lock your rate ahead of the Fed’s announcement today. The Fed adjourns at 2:15 PM ET. Call me to lock your rate.
The Fed meets 8 times annually.
Lake Geneva Home Affordability Gets A Boost From Weak Back-to-School Retail Receipts
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Lake Geneva Real Estate Retail Sale
The recent rise in Lake Geneva mortgage rates was slowed this week after the government released its Retail Sales report for August.
Prior to Tuesday, mortgage rates had been spiking across Wisconsin on the resurgent hope for U.S. economic recovery. The sentiment shift was rooted in reports including the Pending Home Sales Index and Initial Jobless Claims, both of which showed surprising strength last week.
August’s Retail Sales, though, after removing motor vehicles, auto parts and gasoline sales, failed to maintain the momentum. Its figures were actually in-line with expectations — it’s just that expectations weren’t all that high.
Wall Street now wonders whether the weak Back-to-School shopping season will trend forward into the holidays.
The doubt spells good news for Lake Geneva mortgage rates and home affordability.
Because Retail Sales is tied to consumer spending and consumer spending accounts for two-thirds of the economy, a weak reading tends to drag down stock markets and pump up bonds, and when bonds are in demand, mortgage rates fall.
This is exactly what happened Tuesday. The soft Retail Sales data eased stock markets down, and generated new demand for mortgage bonds. This demand caused bond prices to rise, which, in turn, caused mortgage rates to fall.
Lake Geneva real estate mortgage rates did not cut new lows this week, but they’re very, very close.
With mortgage rates at historical lows, it’s an excellent time to look at a refinance, or gauge what financing a new home would cost. Low rates like this can’t last forever.
The Math Of Choosing A Great Closing Date For Your Lake Geneva Real Estate Closing.
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Lake Geneva real estate closing dates and rate locks
Want a lower mortgage rate on your upcoming Lake Geneva real estate home buy? Think about moving up the closing date.
The reason is rooted in “rate locks,” a bank’s guarantee to honor a specific mortgage rate for a specific, finite period of time. Rate locks allow home buyers to reserve mortgage rates today even though their respective closings may be scheduled as far as a year into the future.
A rate lock is a contract. No matter what the “current market rate” is at the time of closing, the bank will honor the terms of the original rate lock.
It would be like making an agreement to buy Microsoft stock at a specific price 60 days from now. No matter what the price, you already know what you’re paying for it.
In this sense, rate locks are predictions about the future and, meanwhile, as we all know, the future can be a challenge to forecast. Lenders know this, too, of course, so it’s easy to understand why longer rate locks tend to be more expensive than shorter ones.
The longer the rate lock, the more risk to the bank.
To compensate for this “time risk,” therefore, lenders typically step-up pricing for rate lock guarantees as lock period lengthen.
- 15-day rate lock: The best of all pricing
- 30-day rate lock: 1/8 percent extra cost versus the 15-day rate lock
- 45-day rate lock: 1/4 percent extra cost versus the 15-day rate lock
- 60-day rate lock: 3/8 percent extra cost versus the 15-day rate lock
One percent of “extra cost” is defined as one percent of the borrowed amount.
Now, this incremental price chart is just a rough guideline; exact spreads vary from lender-to-lender. Overall, however, it’s fairly close.
That’s why it’s important to manage your closing date vis-a-vis your Lake Geneva mortgage rate. Closing in 30 days versus 31 can save you an eighth-percent in closing costs. Assuming a loan size of $200,000, that’s $2,500 saved.
So, when negotiating a closing date on a contract, keep in mind the math of mortgage rate locks. The shorter its length, the more money you might save.
Your Lake Geneva Mortgage ARM Is Adjusting Lower. Is There A Downside To Letting It?
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When Lake Geneva adjustable-rate mortgages are on the verge of adjusting, a common concern among homeowners is that their mortgage rates will adjust higher.
Well, this year, because of the math of how ARMs adjust, homeowners of Lake Geneva real estate and around the country are seeing that mortgage rates on ARMs can sometimes adjust lower, too.
Adjusting conforming mortgages are adjusting to as low as 3 percent.
As a quick review, here’s the timeline for most conforming adjustable-rate mortgages:
- There’s a “starter period” in which the interest rate remains fixed. This can range from 1-10 years.
- There’s a rate change after the starter period. It’s called the “first adjustment”.
- Subsequent, annual adjustments follow until the loan “ends”. This is usually after Year 30.
The adjustments each year are based on a math formula that’s included in the contract with your lender. It’s surprisingly basic. Each year, your new, adjusted mortgage rate is equal to the sum of some constant — usually 2.25 percent — and some variable. The variable is most commonly equal to the 12-month LIBOR.
As a formula, the math looks like this:
(Adjusted Mortgage Rates) = (12-Month LIBOR) + (2.250 Percent)
LIBOR is an acronym standing for London Interbank Offered Rate. It’s an interest rate at which banks borrow money from each other — very similar to our Fed Funds Rate here in the United States. And also like our Fed Funds Rate, LIBOR has been low lately.
As a result, adjusting mortgage rates have been low, too.
In 2009, 5-year ARMs adjusted to 6 percent or higher. Today, ARMs are adjusting to 3.000%.
Based on the math, you may want to let your ARM adjust with the market year. Or, if you plan to keep your home long-term and have concerns about adjustments in 2011 and beyond, it may be a good time to open a new ARM. The same forces that are driving down LIBOR and helping to keep Lake Geneva mortgage rates low overall, too.
Consider talking to me and making a plan. With Lake Geneva mortgage rates as low as they’ve been in history, most homeowners have options. Just don’t wait too long. LIBOR — and mortgage rates in general — are known to change quickly.
What’s Ahead For Lake Geneva Mortgage Rates This Week: September 7, 2010
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Last week was a roller-coaster ride in the conforming mortgage market. After opening the week by making new, all-time lows, markets reversed sharply on better-than-expected data in manufacturing and housing, and data from overseas.
Rates rose through Wednesday and Thursday, then Friday’s jobs report sent rates jumping.
Last week marked the first time that Lake Geneva mortgage rates worsened 3 days in a row since late-April.
The combination of the jobs report not posting as poorly as predicted, and light volume because of Labor Day, pushed rates higher by as much as a quarter-percent in some markets.
On the week, conforming mortgage rates for Lake Geneva real estate were unchanged but, depending on when you locked, there was great disparity. Tuesday’s rates were much better than Friday’s.
Meanwhile, this week, with little data due for release, Lake Geneva mortgage rates should remain unpredictable, moving as a result of momentum and outside influence. It makes for dangerous times for rate shoppers. Mortgage rates may fall, but, then again, they might rise, too.
Keep in mind that markets are in the midst of a 19-week rally and rates can’t fall forever. Mortgage bonds are likely overbought so when the selling begins, pricing should worsen quickly. This will cause Lake Geneva mortgage rates to spike.
Therefore, if you’ve been shopping for a mortgage or are just wondering if the time is right to refinance, call your loan officer and work the numbers together. Refinancing won’t make sense for everyone, but it may make sense for you.
Lake Geneva mortgage rates are still exceptionally low.
What’s Ahead For Lake Geneva Mortgage Rates This Week: August 30, 2010
Posted by: | CommentsSorry for the delay in getting this out, but I was dealing with a family emergency for the better part of last week. I hope it was worth your wait.
Lake Geneva Mortgage markets improved last week despite a major mortgage bond sell-off Friday afternoon. Prior to the jump, conforming mortgage rates had cut new, all-time lows by Thursday, only to lose up to 0.250 percent on the last day of the week.
Meanwhile, the same type of news that drove rates lower Monday through Thursday also contributed to rates rising Friday — revised projections for the U.S. economy.
Early in the week, “bad” news piled on which, in turn, lowered expectations for the economy and pushed Lake Geneva mortgage rates down:
- Existing Home Sales dropped 27% from June
- Single-Family New Home Sales dropped 12% from June
- Purchases of “big ticket” items plunged
Then, on Friday, two events revised the market’s expectations back higher:
- Q2 GDP was revised lower, but not as low as had been expected
- Fed Chairman Ben Bernanke said the economy will keep expanding through the end of the year and into 2011
When Chairman Bernanke talks, markets listen. His comments about the U.S. economy helped fuel that late-Friday surge in Lake Geneva real estate mortgage rates last week.
This week, the momentum could continue — depending on the data.
There’s a lot for markets to digest this week including key inflation figures from the government; home value data from Case-Shiller; Fed Minutes from the Federal Reserve; and, the always-important jobs report due Friday.
Since April, Lake Geneva mortgage rates have been on a downward trajectory and that may continue this week. Or, it may not. If you own a home and haven’t talked to me about a refinance, now is as good a time as any — Lake Geneva rates are at historic lows and could rebound at any time.
Last June, mortgage rates rose 1.125% in 10 days. Under the right circumstances, it could happen again.