Colorado Home Mortgage Banking

As expected the Colorado home mortgage market was off to a tough start, mainly still affected by the news from yesterday.  We had a couple of new economic reports come out today, both coming in lower then expected.  This should start sending Colorado home mortgage rates downward through today.  I expect that this movement will continue through early to mid next week sending Colorado home mortgage rates even lower.  If the economic data continues to be negative we will see much of the increases experienced this week go away by next week.  With that said we need to focus on historical data and historically Colorado home mortgage rates continue to come in lower then the two year average.  Colorado home mortgage rates reporting under 6% is still good, we have just become so accustom to low rates that we believe that this is the norm and it just isn’t.  I am still putting in a FLOAT recommendation, but be prepared to lock if we get anywhere near the 5.5% range.  Locking at 5.5% will always be a win win for you.  By looking at the economic data released today, our fear of inflation got some good news. Personal income and outlays were reported this morning.  This report measures a consumers personal income and the source of that income while calculating a persons spending habit and what they are spending their income on.  This report is generated once a month and is a good measurement with other reports to help gauge which direction inflation will move.   Rising income and spending numbers can depict a growing economy, however it will also indicate inflation is on the rise.  Colorado home mortgage rates do not respond well to inflation and luckily for Colorado home mortgage rates the news worked to its advantage today.  However we will need to continue to monitor these  reports closely, because it also sends a message to those impacting Monetary Policy (Feds) that we still have room for more short term interest rate reduction.  When the Fed’s lower short term interest rates investors begin to respond to their fears on inflation.  Investors know to well that making money cheaper will only create more spending, which is what the Federal Reserve wants to do.  If spending becomes too prevelant inflation will get out of control, making a fixed investment less valuable and in return increasing Colorado home mortgage rates.  The Federal Reserve has taken the position that they will do just about anything to keep us spending including lowering interest rates to an unhealthy level.  Colorado home mortgage rates will respond well to the level of concern related to the economy, but if inflation runs wild expect a very large increase to Colorado home mortgage rates.  So far so good, but lets keep a very close watch on any report signaling inflationary pressures.  Recommendation: FLOAT lets see what next week brings us.  Remember to check out www.coloradohomemortgageloan.net Daniel

Mortgage rates took a hit today leaving some of us wondering if rates will continue to go up.  For the 5th day in a row Mortgage rates increased slightly.  Rates are currently up .375% from Monday and will probably remain that way through tomorrow.  All week we have been saying that the Economic reports due out this week will speak volumes on how mortgage rates will react.  Investors have been pricing in certain expectation into the market and those expectations were confirmed today on a number of reports coming out.  Jobless claims, Corporate Profits, and GDP all came in as expected and investors reacted with confidence.  Investors worked quickly to begin searching for higher returns outside of the bond market creating a drop in Mortgage Backed Securities.  Though investors took the news positively, we should probably take another look at the economic reports posted today.  Jobless claims, Corporate Profits, and GDP all came in lower then the previous quarters and even scarier came in right in line with the same numbers we faced during our 2001 recession.  Why investors are so confident, makes no sense to me.  We are experiencing economic data similar to economic data’s reported during our last two recessionary times.  Mortgage rates should be reacting quite well, but so far that is not the case.  Another report used to measure pressure on inflation is the Personal Consumption Expenditure report which came in low, 20% lower then expected.  The signs all point to mortgage interest rate decreases, but like everything else in this world nothing is certain.  What I am sure of is that typically I do not lock on Friday’s due to lack of activity.  Lets keep the FLOAT recommendation alive until early next week, but lets use caution, we may have to just bite the bullet and lock, we don’t want to have rates moving up like they did 6 weeks ago before making a locking decision.  Good luck and God Bless.

Daniel

I am off to a late start today, sorry about that.  Today’s Colorado Mortgage rates should see rates increase slightly based on the economic news and the close of the futures market early this morning.  As stated before the real battle until the 27th is whether or not Colorado Mortgage rates will be impacted by bad economic news or the fear of inflation.  Colorado Mortgage loan programs are impacted in there locking ability by the Mortgage Backed Securities market which hates any mention of inflation.  We have seen a number of economic reports come out in the last few weeks most of them indicating a slow down in the economy which as sehnt Colorado Mortgage rates to its lowest points of the year.  The lack of activity created by the fact that Economic reports are limited this weeks has investors looking at other sources to get the jump on the rest of the market.  Although Colorado Mortgage investors tend to be conservative, none of them want to fall short when it comes to their investments.  So when the media begins to talk about inflation of if economic data of any kind comes in good, Mortgage backed securities drop and the interest rates increase.  You should still be able to get into a good Colorado Mortgage loan for under 6% just about anywhere, as long as your broker does not price it too high.  I locked a couple people today at 5.5% and will be quoting people this afternoon around 5.625%-5.75% depending on how much further the Securities market drops.  Although there seems to be very little activity with Mortgage Backed Securities the activity currently showing has driven Colorado Mortgage rates up.  The biggest news of the day came in New home sales that came in .05% higher then expected sending a small sign of good economic news in the future.  On the 27th we should get a big snap shot as GDP numbers are released, which is the biggest indicator on Recessionary pressures.  Recommendation for your Colorado Mortgage loan is to: LOCK for the short run if you want to gamble on bad ecomonic news to come then,  feel free to float.  The risk reward for Floating does not appeal to me, yes you might save an 1/8th or even a 1/4 off your rate in the next week, but if the news is positive and the media begins to talk about how great a job the Federal Reserve has done to stop recessionary presures then your rate will increase quickly.  Colorado Mortgage Rates are low and locking in will be the only guarantee to have the rate you were looking for.