Learn. Share. Connect. (52,314 Members)  - Join

Site Tools

Join Now or Sign In
for Full Access to All Features
Mortgage Rates
30 Yr FRM 4.83% -0.08%
15 Yr FRM 4.32% -0.04%
1 Yr ARM 4.35% -0.11%
5/1 Yr ARM 4.25% -0.04%
30 YR Tres 4.30% 0.01%
Fed Prime 3.25% 0.00%

Recent Polls

Do you expect the home buyer tax credit extension to contribute to a noticeable pick up in loan production?

Created By: Adam Quinones
  • Yes, I anticipate an increase in activity (26.9%)
  • Only a modest upturn in production (43.8%)
  • Nope. 2009 demand stole from 2010 demand (29.2%)
Receive Free Email Alerts
Stay up to date on breaking news and blog posts with our free News Alert Service

Thursday 3/12…Jobless Claims Come in Higher than Expected

by Victor Burek -
 Email Page (New!)   |     Print   |     Bookmark

Yesterday, mortgage backed securities managed to have a late day rally and closed 10 ticks higher or about .25 better in discount.  Some lenders repriced for the better yesterday while others held back and didn’t pass along the improvements.  So far this morning we are basically even with close yesterday and we should see par 30 year fixed rate mortgages anywhere from 4.75% to 5%.   

We did receive some economic data this morning and it appears to be a push.  First, we got the release of the weekly jobless claims.  Economists where expecting 645,000 people to have filed claims for unemployment last week; however, the number came in slightly worse at 654,000.  The continuing claims number came in higher at 5.317 million Americans that continue to file for unemployment which is a record high number and above the consensus.  So, the jobs outlook is still looking quite bad which is a positive for mbs since higher unemployment allows companies to hire new people without attracting them with higher pay and they do not need to pass along raises to current employees as they will be happy to just have a job.  This is known as wage based inflation and this is one of the biggest enemies to mortgage rates as higher inflation leads to higher interest rates.  So, wage based inflation is quite contained.   Next, we got the release of the monthly retail sales figures and to most economists surprise they came in considerably better which is a negative for mbs.   Economists where expecting retail sales to show a month over month decline of -.5%; however, the number came in quite better at -.1% and when excluding autos the reading came in at a .7% increase when economists where expecting a -.2% decline.    There was also a positive revision to January’s number for an increase of 1.8% versus the 1% reading.   Since jobless claims where slightly worse and retails sales better, we have a push.  We still get the release of business inventories in about an hour but historically not a market mover.   Lastly, there is another treasury auction later today of the 30 yr Treasury bond.  The added supply could put pressure on Treasuries and mbs to move lower in price which results in higher mortgage rates.  The auction yesterday of 10 year treasury notes was received rather well and caused a rally in treasuries which helped to spark the rally we had in mbs yesterday.  The 10 year treasury note reached a high yield yesterday of over 3.00 but moved considerably lower after the auction to a yield of 2.90. 

Later today there is a hearing on Capital Hill regarding accounting rules, specifically the mark to market and the uptick rule on shorting stocks.  I do not want to get into detail on these items in this blog as those are much more relevant to equity traders, but this could have an effect on mbs later today.  If there are changes to these rules, it could spark a stock market rally which could pull money out of the fixed income market, mbs and treasuries, and into the stock market.  If you do not have access to live mbs pricing, keep an eye on the stock market.  If you see the dow moving higher, that might be a sign to lock any short term loans as we will probably see the best rates of the week today.  So far this morning, the stock market is opened lower but has since turned positive and treasuries are currently moving lower in yield with the 10 year at 2.86.  I will get back to you later today with any relevant updates but so far so good.  Early reports from fellow mortgage professionals are showing mortgage rates to be about .25 better in discount that what we had yesterday at this time. 


    Rate this Post  

Comments

Join Now or Login to Post Comments

on
can somebody tell me is there a benifit to refinancing with your current bank or going to a diff bank? Are closing costs different? I am using HSBC but they want .375 more for a refi then a new mortgage
on
jk, you would benefit in shopping around. Rates are the same on purchases and refi's, so that should tell you whether you want to work with your current lender. I would suggest that you find a good broker in your area to assist you.
on
Thanks for doing this blog, it's incredibly informative. What's the outlook for the next 2 months? I'll be closing a 15yr refi at the end of April, right now I can get 4.5 with no points. Seems like that's been the floor of late, is there any reason to think it will get much lower than that?
on
Jeremy, what state are you in?
on
Victor, Is interest rate for re-finance a investment property a lot higher than re-finance your primary home? I have a single dwelling investment property that I tried to re-finance, but my broker said I properly need to pay 2 points to get 5.625%. Is it reasonable for investment property?
on
Can we ever hope to see a 30 year fixed rate at 4.5 % with no points in Texas
on
Thanks for the info. I was very excited to see the loan limits for Agency conforming loans raised on March 4. In CT my country limit went to $708k. However, it seems that banks are still pricing loans to the old limits - $511k (with the $625k max across the country). Question is, why wouldn't the banks acknowledge these new higher limits, and when might they? Thanks
on
suikam, yes rates are considerably higher for investment properties. Whisperer, i doubt we will see 4.5 with no points, but you can get that rate now by paying about 2 points with most lender. Jim, it will take banks time to get their systems updated with new limits but it will happen.
on
first of all great site!!!! Why is navy federal credit union so high in rates - 5% with 1 pt for 30 yr conv. I like your 4.5% with 2 pts. Should I look else where? I'm in VA.
on
Mike, i would suggest that you look elsewhere. I can refer you to a mortgage professional in VA if you like. email me at vburek@866whyross.com if you would like a referral. thanks for the compliment, hope the site helps you.
on
It's been a little while since I've posted. For those that are brokers, what is/has been your experience with Wells as of late? I've got approval on a re-fi that we locked about 3 weeks ago. They sat on the paperwork but now they want to push all the rate lock extension back on me. My broker said he has tried everything and they just tell him to go somewhere else then or pay .2125 for extension. I will admit that based on what I've seen here, my rate is incredible and I locked at a good time. I was at 4.5% @ .6125 pt with 1% orig from my broker. My new rate (the take it or leave it proposition) is 4.5% @ .825 pt with 1% orig. I'm "taking" it but wanted to see if other brokers here are having similar experiences.
on
When calculating LTV ratio's do they take Home Equity Lines into account? I always thought they did but I spoke to a lender today (one of the larger banks) and she said they would calculate my LTV at 62%. Taking the HELOC into acct the LTV is 76%. The pts she quoted me for the same rate was 1.25 less which is obviously significant. Thanks for any insight. I echo everyone's sentiments that this site is very helpful and I appreciate Victor and the other posters for taking so much time to help everyone out.