We have moved our blog!
July 21st, 2011. Published under Uncategorized. No Comments.
For multiple reasons we have decided to move our blog into our main site over at providential.com. We will keep this blog going in case you have any bookmarks, but everything old and new is now available at our new blog. See you over there!
What’s Ahead For Mortgage Rates This Week : July 11, 2011
July 11th, 2011. Published under Mortgage Rates. No Comments.
Mortgage markets improved in roller coaster-like trading last week. And, not surprisingly, the week’s two big stories were the same two stories roiling mortgage markets since March — Greece and Jobs.
In both instances, rate shoppers won. Conforming mortgage rates improved for the first time in 3 weeks last week.
Early in the week, mortgage rates fell as doubts resurfaced on the just-completed Greece aid package. Although an agreement had been reached by the Greek Parliament, investors are wondering if it’s a bona fide solution, or delaying an inevitable default.
Talk like this triggers a flight-to-quality, and last week, it led mortgage rates lower.
Then, mid-week, a strong preview of the Friday jobs report led to a reversal. Mortgage markets sold off sharply with the prospect of a blow-out Non-Farm Payrolls number. Analysts upped their estimates 50% — from 80,000 net new jobs created in June to 120,000 — and mortgage rates spiked in anticipation.
The rate rise was short-lived, however, because when the actual jobs report was released, it showed just 14,000 jobs added in June. Mortgage markets reversed and mortgage rates sunk to their best levels in 2 weeks.
This week, Greece should remain in the headlines, but there’s other rate-changing news, too:
- Tuesday : FOMC Minutes
- Wednesday : 10-Year Treasury Auction
- Thursday : PPI; 30-Year Treasury Auction; Jobless Claims
- Friday : CPI; Consumer Sentiment
If you’re still floating a mortgage rate, today marks a good week to lock. Mortgage rates could fall this week and next, but there’s more room for rates to rise than to fall.
Lock up today’s low rates while they’re still available.
Mid-Year Review : Were The Experts Right About The Market?
July 8th, 2011. Published under The Economy. No Comments.
The year is half-over. It’s an opportune time to take stock of analyst predictions made at the start of the year, and to recognize that the “experts” can be wrong as often as they are right.
For as much experience and authority an expert brings to the conversation, though, nobody can accurately predict the future.
As such, there’s often disagreement.
Looking back to December, some housing analysts called for a market rebound this year; while others called for a fall. With respect to mortgages, some said rates had nowhere to go but up; while others expected more dips.
As a layperson, how do you know who will be right?
In short, you can’t.
Predictions are a tricky business because they’re guesses about the future based on the world as it exists today. When the predictions listed earlier were made, the world was a different place.
A lot has changed since January:
- Slowing job growth has suggested to slower U.S. economic growth
- Food and energy costs have spiked, adding inflationary pressures to the economy
- Eurozone debt issues have grown, punctuated by a near-Greek default
- Tsunamis have caused widespread damage in Japan
- Earthquakes, floods and volcanoes have harmed economic output
None of these events had occurred as of December, when the original predictions were made. Yet, each of these developments has made a deep impact on housing, and on the economy.
So, what’s a homeowner to do? Think of the present instead.
First, mortgage rates are low today — extremely low by historical standards. Second, home values have been slow to rebound through most U.S. markets. Combined, these factors have made homes more affordable than it any time in recorded history. It’s not only cheap to buy a home right now, it’s cheap to refinance one, too.
Analysts are saying the home prices will rise this year, and mortgage rates will, too. Those predictions may ultimately be proven true. Until the future arrives, though, those predictions are just guesses.
Economy Expected To Have Added 80,000 Jobs In June
July 7th, 2011. Published under The Economy. No Comments.
Friday morning, at 8:30 AM ET, the Bureau of Labor Statistics releases its June Non-Farm Payrolls report. If you’re currently shopping for a mortgage, or floating a mortgage rate, be prepared. Mortgage rates can change following the monthly report’s release.
Often, by a lot.
More commonly called “the jobs report“, Non-Farm Payrolls reports on the U.S. workforce by sector, summarizing its findings in terms of total workforce size, and as a national Unemployment Rate. Jobs are considered a keystone in the continuing U.S. economic recovery.
More working Americans means:
- More consumer spending, a boost to businesses
- More tax collection, a boost to governments
- More personal savings, a boost to households
For June, analysts expect the government to report 80,000 net new jobs created, and no change in the 9.1% Unemployment Rate.
Although these figures are slightly below than what can be considered “strong growth”, that’s not what should concern rate shoppers. Mortgage markets react to a deviation from estimates more than to the actual results themselves.
This is because Wall Street placed bets in advance of the jobs report’s release. If jobs growth tallies more than 80,000, therefore, it signals better news for the economy than what was expected. This will push banks and investors towards equities, and away from bonds — including the mortgage-backed kind.
With less demand for mortgage bonds, mortgage rates will rise.
Conversely, if jobs growth is less than 80,000, mortgage rates should fall.
Mortgage rates remain near their lows for the year, but if the June Non-Farm Payrolls report beats estimates of 80,000 jobs made in June, look for mortgage rates to spike. The safe move is to lock today.
What To Know Before You Move To A New Neighborhood
July 6th, 2011. Published under Personal Finance. No Comments.
As home buyers , we tend to research homes a lot. We look at square footage; at upgrades; at landscaping; at community statistics; and, at every other “number” on which we can get our hands.
But those are just statistics. What about the home’s “feel”?
In this 5-minute piece from NBC’s The Today Show, you’ll learn a dozen complementary home-shopping techniques to help you review and evaluate a home for purchase. Each is focused on findings you won’t see listed on a website.
For example, instead of scheduling your second showing for the same time of day as your first one, revisit a home during an “opposite” time. if you originally saw the home in daylight, go see it at nighttime. If you first saw a home on the weekend, go see it during the work week.
By seeing a home in two distinct settings, you can get a better feel for what the home and neighborhood are really like.
Some of the other tips from the video include:
- Visit during Rush Hour and on a Saturday night. This will help you gauge sound levels of the street.
- Go to Google Maps and study the aerial shot of the home. What’s nearby?
- Talk to neighbors. They’ll share everything about the neighborhood with you — good and bad.
When you buy a home, you committing to more than just the property. You’re committing to the neighborhood, too. Armed with the methods described in this video, you’ll be better prepared to make a good decision.
What’s Ahead For Mortgage Rates : Week Of July 5, 2011
July 5th, 2011. Published under Mortgage Rates. No Comments.
Mortgage markets worsened last week as Wall Street’s renewed optimism pushed equities to their best one-week gain in 2 years. The change in sentiment was bad news for rate shoppers, however, as investors pored into stocks at the expense of bonds.
Last week, for the first time since February, mortgage rates rose 5 days in a row. By the time bond markets closed for the 3-day weekend, conforming fixed mortgage rates had climbed to their worst levels since mid-May.
Mortgage rates are now at 7-week highs.
The biggest reason for last week’s mortgage rate turnaround is that lawmakers in Greece approved a national austerity plan. Reaching an accord on spending cuts and tax increases was a necessary step for the nation-state to avoid defaulting on its debt and falling into bankruptcy.
Until last week, it wasn’t clear whether the Greek Parliament would reach this agreement, and this fear is why mortgage rates were down through May and June. Faloout from a default would have created global economic uncertainty and uncertainty tends to be good for mortgage rates.
With agreement reached, though, that uncertainty is minimized. Mortgage rates are reversing.
This week, the big news will be June’s Non-Farm Payroll report, set for release Friday morning. If jobs growth is stronger-than-expected, stock markets should continue to post gains and mortgage rates should continue to rise.
The jobs report is a market-mover. If you’re floating a mortgage rate and wondering whether to lock, it may be prudent to lock ahead of Friday’s release.
