The Federal Housing Finance Agency (FHFA) announced that it has rescinded the upfront fees based on borrowers’ DTI ratios/credit scores for loans acquired by Fannie Mae and Freddie Mac.
Rates starting the day are down from Friday. See graph below. down is higher rates. The movement only represents about a 0.125-0.250 change in rate.
Monday Monday…. Make it a great week.
There is some interesting chatter in the Mortgage News channels and broadcasts that the Feds might know what they are doing and we will have a soft landing.
Time will tell.
Its Friday and the middle of May already. Have a fantastic weekend and always happy to take your call, email or txt.
The April Producer Price Index or PPI is a measure of wholesale inflation, while the Consumer Price Index CPI measures the Price paid by consumers.
We are seeing a different take from the Producer or Manufacturer regarding inflation.
Overall producer inflation increased 0.2%, less than the expected 0.3%. Our year over year has declined from 2.7% to 2.3%. This is huge and very good news. The Peak was 11.7%.
We are seeing rate improvement as expected. Have a great rest of your week.
The Consumer Price Index (CPI) Which measures inflation on the consumer level, reported at 0.4% inline with expectations and more importantly a decrease in inflation or 0.1% to 4.9% year over year.
I often get phone calls with the same question “what are rates today”
This is what we look at everyday. Green is rate improvement, Red the opposite. What is fascinating is how cyclical it is (UMBS 30yr 5.5% chart). Up is lower rates.
If I keep looking back, let’s say 6 months, I get this chart.
It’s not just what’s the rate, it’s when is the rate, when should I lock, or should I float for a few days. Ask your lender these hard questions, then ask me and let’s see what the difference is.
Its Wednesday, headed to a Real Estate weekly meeting this morning.
Tomorrow Morning the highly anticipated April Consumer Price Index report will be released.
This could be the beginning of when we feel inflation would start to make additional progress and potentially a rate drop.
Year over Year inflation numbers means we are replacing last year’s April 2022 with this year’s April 2023 number. If this year’s inflation number is lower than last year’s April inflation number, the total inflation calculation will go down.
Sunday evening, JPM Chase and Goldman Sachs released their estimates and they felt inflation reading would not see much of a change.
Below is the buyer activity survey.
Have a great rest of your week.
Coco Chanel once described luxury as “a necessity that begins where necessity ends” — a maddening phrase for any old-school economists whose models can’t understand why people spend $30,000 on a timepiece that tells the same time as a $30 watch. The answer, of course, is a combination of two very human things: because they can, and because it feels good. -Chartr
Have a fantastic week and always feel free to reach out anytime.
More Jobs were added in April than in previous months despite the Federal Reserve’s efforts. Unemployment rate drops to 3.4%
Another data point for the unemployment rate.
The economy is stubborn, this is a good thing, but the Feds are not happy this morning…..
I love graphs, they tell you so much with so few words. But first lets quickly understand the difference between the Fed Funds rate and the Mortgage Rate.
Fed Funds Rate is the rate banks borrow overnight to satisfy liquidity requirements set by regulators. Banks then pass that rate to its clients affecting short term lending:
Mortgage Interest Rates reference the yield on the 10-year Treasury bonds.
When the Fed raises rates, Mortgage rates typically go down.
This is the 10 Year Treasury bond vs the Fed Rate.
Let’s now look at the 30 Year Mortgage vs the 10 Year Treasury Rate
In conclusion…. When you hear the Feds are raising rates, run to your lender to get pre-qualified for a Mortgage or ask about refinancing your loan.
Have a great rest of your week and always feel free to reach out.
We just don’t know. Producer Price Index – PCE is down sharply from 11.7 to 2.7%. Inflation is down and the low and mid level regional bank issue that could create more strain and potential banking crisis. They make up 40% of all loans.
Rates have improved this week. I will hang onto that.
With Sunday’s news of the downfall of First Republic Seized by regulators into FDIC receivership, my first thought was how is this going to affect the bond market.
Typically this type of disruption would mean bond prices drop as well as interest rates. This did not happen. We saw minimal change at best. The market is calling this a piece of Ice not an Iceberg.
The Feds are expected to raise the Fed rate by 0.25 basis points Wednesday.
Rate average this year.
Headed into a meeting this morning, have a fantastic week.
Mortgage News 