Colorado Home Mortgage Banking

The last couple of days have been ugly for those trying to lock their Colorado Home Loan.  We saw Colorado Home Loan rates increase about .375% - .500% depending on the lender in just two days.  If you look at the previous couple days blogs you will see why rates increased, but I will also give you a quick recap.  Inflation will always play havoc on Colorado Home Loan rates.  After the Producer Price Index report came out on Tuesday, investors began to sell off their Mortgage Backed Securities in great numbers.  The supply obviously reduced the price, which in return increased Colorado Home Loan rates.  On Wednesday the Consumer Price Index came out and it read as expected.  Normally this would be good news for Mortgage Backed Securities, but news in the stock market created another sell off of Mortgage Backed Securities.  Reports of several key companies indicating better then expected Profit earnings, sent hope of economic recovery.  This allowed investor the confidence needed to invest in the stock market and in return funnelled monies out of the Mortgage Backed Securities Market.  Due to this Colorado Home Loan rates again loss some ground yesterday.  Today we have had three economic reports come out.  These reports in themselves are not market movers, but together will have impacts on the market.  Jobless Claims, Leading Indicators, and Philadelphia Fed Index all came in at or below expectations.  The numbers show that we still have some major work to do to get out of the current economic down turn and should start seeing rates improve again.  Its scary how quickly rates can move up, but over the last year we have seen much of the rate increases drop back down over time.  The key is to lock in at the right time.  I always say that 5.5% is the bench mark Colorado Home Loan rate to lock and so far that philosophy has done well for clients locking at that rate.  FLOAT remains my recommendations and hopefully over the next few days rates will start coming back in line.  Today the Mortgage Backed Securities market appears to be flat probably recovering from the selling frenzy that took place over the last couple of days.  A Flat market is a good market because the bleeding has stop at least for now.  We may see a small dip before we see a recovery, mainly due to volumn in the market.  Light volumn typically drops pricing in the Mortgage Backed Securities market.  Colorado Home Loan rates will begin its recovery as soon as we have any reports stimulating volumn in the market again.  We had a couple of good days for the stock market, but we are not out of the woods when if comes to negative economic reports and the moment that information hits the market again will be the moment we see Colorado Home Loan rates drop.   We have very light reporting on economic indicators over the next 2 weeks.  April 30th will be a big day for Colorado Home Loan rates so we will need to keep a close eye on what reports will be released.  For now unless we have big positive news for the stock market things should start recovering.  A good way to monitor what Colorado Home Loan rates are doing is to see whether the stock market is up or down.  Odds are if stocks are down Interest rates are down.  If stocks are up the interest rates will be up as well.  With very little economic news to report the biggest driver will be the stock market.  Colorado Home Loan rate recommendation remains as FLOAT. Call me anytime if you have questions, until then best of luck and God Bless.

Daniel

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