Mortgage Times
#1
03-07-2008, 02:37 PM
Mortgage Times
I had a few people ask me why I haven't been posting this information. I'm sorry, guys. I know some of you are actually interested in it.
I am having the busiest period ever at my firm and all kinds of other personal stuff going on. This is the season for all the work I do for the Colorado Disabled Athletics Association and the County Sheriff's Department where I work as a volunteer PIO. I have also gotten back into lecturing on contact management after several years from it and even had to so this morning.
Not an excuse, just an apology.
Mortgage Market News for the week ending March 7, 2008
Events This Week:
Employment Down
Inflation Steady
Manufacturing Weak
Pending Sales Flat
Events Next Week:
Tues 3/11
Trade Balance
Thurs 3/13
Retail Sales
Import Prices
Fri 3/14
CPI
Sentiment
Investors Push Up Mortgage Rates
In a week packed with major economic news, the biggest story for mortgage markets was the widening spread between mortgage backed securities and Treasury bonds. Issued by the US government, Treasury bonds are generally considered to be the benchmark for a "safe" security, since the risk of default is extremely low. During the week, the economic news was mixed, and Treasury rates barely changed. Mortgage rates, however, jumped by about half a point. Investors are demanding a higher return from mortgage backed securities, and the result is higher mortgage rates. In another unusual reversal, the mortgage market has been more volatile than the Treasury market, and wide swings in mortgage rates have become a daily occurrence.
On the economic front, the highly anticipated Employment report failed to meet even Wall Street's reduced forecast. Against expectations for a gain of 25K new jobs, the economy lost -63K jobs in February, and the figures for January and December were revised lower as well. This marked the largest monthly decline since March 2003. The Unemployment Rate surprisingly fell to 4.8%, but that reflects a large number of people who stopped looking for a job last month, meaning that they officially left the labor pool. Once again, the manufacturing and construction sectors showed the greatest weakness. Until November, the service sector had been steadily producing job gains of 100K or more per month, but even that sector barely produced any new jobs in February.
Big news came out from the Department of Housing and Urban Development (HUD). In accordance with the new legislation passed a couple of weeks ago, HUD released the new loan limits for FHA, Fannie Mae, and Freddie Mac, and they did it a week earlier than expected. The new minimum for FHA is $271,050 with a maximum of $729,750. The Fannie/Freddie minimum remains at $417,000 with a maximum of $729,750. The formula is based on 125% of each region's median price within the posted limits. 250 regions will be eligible for higher caps, and more than 70 regions will be eligible for the maximum. As a practical matter, it will still take some time for Fannie Mae, Freddie Mac, and FHA to prepare their systems and implement the changes.
[ul][*]Also Notable: [*]Pending Home Sales, a leading indicator for the housing market, were unchanged from December to January[*]The Bank of England and the European Central Bank both held interest rates steady as expected[*]Fed Chief Bernanke warned that the number of foreclosures may increase[*]American's percentage of equity in their homes fell below 50% for the first time last year[/ul]Average 30 yr fixed rate:
Last week:-0.15%
This week:+0.50%
Stocks (weekly):
Dow:11,996-372
NASDAQ:2,227-74
Week Ahead
The Economic Calendar will be much lighter next week. The highlight will be Friday's Consumer Price Index (CPI) report. Almost without exception, higher inflation leads to higher interest rates, and CPI is the most widely watched indicator. CPI looks at the price change for those finished goods which are sold to consumers. The other major economic data will be Retail Sales on Thursday. Consumers account for about 70% of economic activity, and this report is a major indicator of spending levels by consumers. Consumer Sentiment, Import Prices, and the Trade Balance will round out the week. Investors also will be focused on expectations for the Fed meeting on March 18.
admin@corefinancegroup.com. [/align]
I am having the busiest period ever at my firm and all kinds of other personal stuff going on. This is the season for all the work I do for the Colorado Disabled Athletics Association and the County Sheriff's Department where I work as a volunteer PIO. I have also gotten back into lecturing on contact management after several years from it and even had to so this morning.
Not an excuse, just an apology.
Mortgage Market News for the week ending March 7, 2008
Events This Week:
Employment Down
Inflation Steady
Manufacturing Weak
Pending Sales Flat
Events Next Week:
Tues 3/11
Trade Balance
Thurs 3/13
Retail Sales
Import Prices
Fri 3/14
CPI
Sentiment
Investors Push Up Mortgage Rates
In a week packed with major economic news, the biggest story for mortgage markets was the widening spread between mortgage backed securities and Treasury bonds. Issued by the US government, Treasury bonds are generally considered to be the benchmark for a "safe" security, since the risk of default is extremely low. During the week, the economic news was mixed, and Treasury rates barely changed. Mortgage rates, however, jumped by about half a point. Investors are demanding a higher return from mortgage backed securities, and the result is higher mortgage rates. In another unusual reversal, the mortgage market has been more volatile than the Treasury market, and wide swings in mortgage rates have become a daily occurrence.
On the economic front, the highly anticipated Employment report failed to meet even Wall Street's reduced forecast. Against expectations for a gain of 25K new jobs, the economy lost -63K jobs in February, and the figures for January and December were revised lower as well. This marked the largest monthly decline since March 2003. The Unemployment Rate surprisingly fell to 4.8%, but that reflects a large number of people who stopped looking for a job last month, meaning that they officially left the labor pool. Once again, the manufacturing and construction sectors showed the greatest weakness. Until November, the service sector had been steadily producing job gains of 100K or more per month, but even that sector barely produced any new jobs in February.
Big news came out from the Department of Housing and Urban Development (HUD). In accordance with the new legislation passed a couple of weeks ago, HUD released the new loan limits for FHA, Fannie Mae, and Freddie Mac, and they did it a week earlier than expected. The new minimum for FHA is $271,050 with a maximum of $729,750. The Fannie/Freddie minimum remains at $417,000 with a maximum of $729,750. The formula is based on 125% of each region's median price within the posted limits. 250 regions will be eligible for higher caps, and more than 70 regions will be eligible for the maximum. As a practical matter, it will still take some time for Fannie Mae, Freddie Mac, and FHA to prepare their systems and implement the changes.
[ul][*]Also Notable: [*]Pending Home Sales, a leading indicator for the housing market, were unchanged from December to January[*]The Bank of England and the European Central Bank both held interest rates steady as expected[*]Fed Chief Bernanke warned that the number of foreclosures may increase[*]American's percentage of equity in their homes fell below 50% for the first time last year[/ul]Average 30 yr fixed rate:
Last week:-0.15%
This week:+0.50%
Stocks (weekly):
Dow:11,996-372
NASDAQ:2,227-74
Week Ahead
The Economic Calendar will be much lighter next week. The highlight will be Friday's Consumer Price Index (CPI) report. Almost without exception, higher inflation leads to higher interest rates, and CPI is the most widely watched indicator. CPI looks at the price change for those finished goods which are sold to consumers. The other major economic data will be Retail Sales on Thursday. Consumers account for about 70% of economic activity, and this report is a major indicator of spending levels by consumers. Consumer Sentiment, Import Prices, and the Trade Balance will round out the week. Investors also will be focused on expectations for the Fed meeting on March 18.
admin@corefinancegroup.com. [/align]
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