Friday, January 24, 2014

Mortgage Time Mortgage Market News for the week ending January 24, 2014 Chinese Manufacturing Slows The driving force for mortgage rates this week came from an unexpected source. Chinese manufacturing data fell short of expectations, causing sharp losses in global stock markets. Investors shifted to relatively safer assets, helping mortgage rates end the week lower. On Thursday, China's PMI manufacturing index dropped to 49.6, below the consensus of 50.3. Readings below 50.0 indicate a contraction in the sector. China has been an important engine of growth for the world economy, so a slowdown would have significant implications for global markets. In fact, the news from China completely overwhelmed the strong results in Europe, which showed that manufacturing in the euro zone reached the highest level since the summer of 2011. The Chinese data caused concerns about the pace of global economic growth, and investors sold stocks. This resulted in an increase in demand for bonds, including mortgage-backed securities (MBS). This week's Existing Home Sales data showed that, despite a slowdown in the fourth quarter, 2013 reflected a year of solid gains. Over five million existing homes were sold in 2013, an increase of 9% from 2012, and the highest level since 2006. While the gains may be more modest, most analysts expect the improvement to continue in 2014 as well. The National Association of Realtors (NAR) projects a very small increase in home sales next year, but both Freddie Mac and the Mortgage Bankers Association (MBA) forecast home sales to increase about 5% in 2014.
The Week Ahead News from China likely will have an impact again next week. The next Fed meeting will take place on Wednesday. Investors will be eager to hear the Fed's views on the expected pace of reductions in bond purchases and what impact a slowdown in China may have. The most significant economic report next week will be Thursday's release of fourth quarter Gross Domestic Product (GDP), the broadest measure of US economic growth. In addition, New Home Sales will come out on Monday. Durable Orders, another important indicator of economic growth, will be released on Tuesday. Pending Home Sales will come out on Thursday. Personal Income, Core PCE inflation, and Chicago PMI manufacturing will be released on Friday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Tuesday, October 22, 2013

Mortgage Market News week October 18, 2013

Mortgage Time Mortgage Market News for the week ending October 18, 2013

Congress Reaches Deal Congress approved a deal on Wednesday to raise the debt ceiling and to fund the government for a few months. The news lifted both stocks and bonds. The S&P 500 index reached an all-time high. Mortgage rates also improved nicely after the deal was reported.

 The deal extends the government's borrowing authority until February 7, removing the risk of default. The deal also funds the government until January 15, ending the shutdown. It provides more time for negotiations, but it does not bring the two sides any closer to reaching a long-term agreement on the major fiscal issues. For mortgage markets, even the slight risk of default had been enough to prevent some investors from purchasing government bonds, including mortgage-backed securities (MBS). After the deal, these investors resumed their purchases of MBS, which lifted MBS prices and lowered mortgage rates.

Mortgage rates benefited from the agreement for another reason. Investors now think that the Fed will wait longer to begin to taper its bond purchase program. Fed officials have expressed reluctance to reduce monetary stimulus while future fiscal policy remains uncertain. If history is any indication, the debate in Congress over a longer-term budget and deficit reduction package likely will continue right to the extended dates. In addition, before tapering the Fed will want to see how much the government shutdown slowed the economy. The flow of economic data produced by the government will resume next week, but it will take some time to sort out the impact of the shutdown from the underlying strength of the economy.

 Also Notable: The NAHB Home Builders confidence index fell slightly from multi-year highs

The Fed's Beige Book reported "modest to moderate" economic growth

The Empire State index declined to the lowest level since May.

 The S&P 500 stock index rose to a record high

 Average 30 yr fixed rate: Last week: +0.03%

The important September Employment report, originally scheduled for October 4, will be released on Tuesday. The other postponed reports, including CPI and Retail Sales, will be released in coming weeks. The rest of the schedule for next week includes Existing Home Sales on Monday, Jobless Claims on Thursday, and Consumer Sentiment on Friday. New Home Sales was originally scheduled for Thursday, but the report may be delayed.

Thursday, February 25, 2010

IRS Home Buyer Tax Credit

Home buyer tax credit info enter into a binding contract to buy, a principal residence on or before April 30, 2010, Here is the tiny url link to the IRS for the $8,000 tax credit

September 1999 the catalyst to the current mortgage crisis

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.