Mortgage rates forecast september 2011 ; Mortgage rates hit record lows this week, reflecting continued market and U.S. employment concerns, Freddie Mac's chief economist said Thursday.
Rates on 30-year fixed-rate mortgages averaged 4.12% for the week ending Sept. 8, down from 4.22% last week and 4.35% a year ago. The mortgage's previous low was set the week ended Aug. 18, when the rate averaged 4.15%.
Concerns about euro-zone sovereign debt and a weak U.S. payrolls report for August put downward pressure on yields on Treasury bonds, enabling fixed mortgage rates to hit new lows, according to Frank Nothaft, vice president and chief economist of Freddie Mac. Fixed mortgage rates are closely related to yields on 10-year Treasury notes.
"On net, the economy added no new jobs last month and was the weakest reading since September 2010," Mr. Nothaft said. "Meanwhile, the unemployment rate remained at 9.1%, marking its 31st consecutive month of being above 8%, the longest such stretch in 70 years."
Mortgage rates haven't been above 6% since November 2008, according to Bankrate.com. When the 30-year fixed-rate mortgage was 6.33%, a $200,000 mortgage would have had a monthly payment of $1,241.86. A mortgage rate of 4.35% on the same size loan would mean a monthly payment of $995.62, according to the news release.
Fifteen-year fixed-rate mortgages averaged 3.33%, down from 3.39% last week and 3.83% a year ago, according to Freddie Mac.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.96%, unchanged from last week. The ARM averaged 3.56% a year ago. And rates on 1-year Treasury-indexed ARMs averaged 2.84%, down from 2.89% last week and 3.46% a year ago.
To obtain the rates, the 30-year fixed-rate mortgage required payment of an average 0.7 point, while the 15-year fixed-rate mortgage and both ARMs required payment of an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest. source online.wsj.com
Showing posts with label Mortgage. Show all posts
Showing posts with label Mortgage. Show all posts
Thursday, September 8, 2011
Thursday, August 4, 2011
Mortgage Rates Eat Macaroni and Cheese August 4, 2011
Mortgage Rates Eat Macaroni and Cheese August 4, 2011 ; Mortgage rates are feeling the effects of a slowing US economy but a strong corporate earnings report from Kraft (famous for their macaroni and cheese) will likely keep current mortgage rates from falling significantly today (though they may fall slightly). Despite the fact that today’s employment data was weak, investors seem focused on tomorrow’s monthly Non-Farm Payroll (NFP) report.
I have typically recommended extreme caution by home purchasers and refinancers lately as it relates to rate locks. However, today, given the virtually universal expectation for a weak NFP report, those with a higher risk tolerance might consider waiting until tomorrow.
Kraft announced higher earnings, raised its guidance for the remainder of 2011 and indicated that it is splitting into two companies. There is no truth to the rumor that the two companies will be known as “Macaroni” and “Cheese”. Kraft is indicative of many US firms that have managed the weak US economy extremely well by cutting expenses and raising productivity. However, at some point these lean and mean companies will need additional employees to continue to grow.
The weekly jobless claims report this morning completely erased the memory of last week’s surprise drop in initial claims. Not only did the report document that just over 400,000 folks applied for first-time unemployment claims, but the revisions to last week’s report took it back over the crucial 400,000 person threshold.
The economic slowdown is not limited to the US. In fact it appears to be a truly global phenomenon. Reports from China, Japan and Europe confirm that growth has slowed worldwide. The Bank of England, which has raised interest rates as of late, decided today to leave rates unchanged as a strategy to leave more liquidity in the system to support growth. Japan, still facing the devastating effects of the earthquake and tsunami, has intervened in the currency market to attempt to reduce the value of its currency to make goods produced there more competitive. Governments are doing what they can to try to stimulate growth. Does the US have any such efforts left in its arsenal?
Tomorrow’s NFP report could be a turning point toward historically low interest rates or it could simply signal more of the same for rates…movement within a relatively small range. No one expects a surprise gain in employment levels tomorrow which would be a harbinger of higher rates. However, with the healthiness of corporate balance sheets and earnings, that turning point toward meaningfully higher rates may not be too far away. Come September, when kids are back in school, and corporate execs are back at work, and barring a decent into recession, I would not be surprised to see the US economy begin to accelerate.
I have typically recommended extreme caution by home purchasers and refinancers lately as it relates to rate locks. However, today, given the virtually universal expectation for a weak NFP report, those with a higher risk tolerance might consider waiting until tomorrow.
Kraft announced higher earnings, raised its guidance for the remainder of 2011 and indicated that it is splitting into two companies. There is no truth to the rumor that the two companies will be known as “Macaroni” and “Cheese”. Kraft is indicative of many US firms that have managed the weak US economy extremely well by cutting expenses and raising productivity. However, at some point these lean and mean companies will need additional employees to continue to grow.
The weekly jobless claims report this morning completely erased the memory of last week’s surprise drop in initial claims. Not only did the report document that just over 400,000 folks applied for first-time unemployment claims, but the revisions to last week’s report took it back over the crucial 400,000 person threshold.
The economic slowdown is not limited to the US. In fact it appears to be a truly global phenomenon. Reports from China, Japan and Europe confirm that growth has slowed worldwide. The Bank of England, which has raised interest rates as of late, decided today to leave rates unchanged as a strategy to leave more liquidity in the system to support growth. Japan, still facing the devastating effects of the earthquake and tsunami, has intervened in the currency market to attempt to reduce the value of its currency to make goods produced there more competitive. Governments are doing what they can to try to stimulate growth. Does the US have any such efforts left in its arsenal?
Tomorrow’s NFP report could be a turning point toward historically low interest rates or it could simply signal more of the same for rates…movement within a relatively small range. No one expects a surprise gain in employment levels tomorrow which would be a harbinger of higher rates. However, with the healthiness of corporate balance sheets and earnings, that turning point toward meaningfully higher rates may not be too far away. Come September, when kids are back in school, and corporate execs are back at work, and barring a decent into recession, I would not be surprised to see the US economy begin to accelerate.
Mortgage Rates August 4 2011
Mortgage Rates August 4 2011 ; Renewed economic worries had mortgage rates falling sharply, with the benchmark conforming 30-year fixed mortgage rate now 4.54 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.39 discount and origination points.
The average 15-year fixed mortgage dropped to a new low of 3.68 percent while the larger jumbo 30-year fixed rate retreated to 5.06 percent. Adjustable rate mortgages moved lower also, with the average 5-year ARM sliding to 3.23 percent and the 7-year ARM falling to 3.52 percent.
The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.54 percent, the monthly payment for the same size loan would be $1,018.13, a difference of $223 per month for anyone refinancing now.
SURVEY RESULTS
30-year fixed: 4.54% -- down from 4.74% last week (avg. points: 0.39)
15-year fixed: 3.68% -- down from 3.83% last week (avg. points: 0.31)
5/1 ARM: 3.23% -- down from 3.34% last week (avg. points: 0.38)
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets
Loan Type - Interest Rate - APR - 8/4/11
30-Year Fixed 4.375% 4.559%
30-Year Fixed FHA 4.250% 5.251%
15-Year Fixed 3.375% 3.691%
5-Year ARM 2.750% 3.083%
5-Year ARM FHA 3.250% 3.311%
Jumbo Loan Rates - APR - 8/4/11
30-Year Fixed 4.625% 4.760%
5-Year ARM 3.250% 3.211%
The average 15-year fixed mortgage dropped to a new low of 3.68 percent while the larger jumbo 30-year fixed rate retreated to 5.06 percent. Adjustable rate mortgages moved lower also, with the average 5-year ARM sliding to 3.23 percent and the 7-year ARM falling to 3.52 percent.
The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.54 percent, the monthly payment for the same size loan would be $1,018.13, a difference of $223 per month for anyone refinancing now.
SURVEY RESULTS
30-year fixed: 4.54% -- down from 4.74% last week (avg. points: 0.39)
15-year fixed: 3.68% -- down from 3.83% last week (avg. points: 0.31)
5/1 ARM: 3.23% -- down from 3.34% last week (avg. points: 0.38)
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets
Loan Type - Interest Rate - APR - 8/4/11
30-Year Fixed 4.375% 4.559%
30-Year Fixed FHA 4.250% 5.251%
15-Year Fixed 3.375% 3.691%
5-Year ARM 2.750% 3.083%
5-Year ARM FHA 3.250% 3.311%
Jumbo Loan Rates - APR - 8/4/11
30-Year Fixed 4.625% 4.760%
5-Year ARM 3.250% 3.211%
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