The FOMC left the Fed Funds Rate at 5.250% yesterday, signaling controlled growth in the months ahead. Most notable was the press release’s inclusion of "tentative signs of stabilization" with respect to the housing market and the removal of references to high energy prices. Because the FFR did not change, the FFR-derived Prime Rate also [...]

It’s all eyes on the Fed today as the market sits patiently, waiting for the 2:15 P.M. EST press release. Despite strong 2006 Q4 growth figures and a five percent spike in oil prices yesterday, there is an eerie calm while markets wait for the FOMC’s press release. In its December 2006 press release, the [...]

60 days ago, markets put a 36% probability that the Fed would lower the Fed Funds Rate by March 2007. Today, that probability is zero. If you’re wondering why mortgage rates have ascended so quickly, that’s part of your answer — inflation expectations are changing. Rates increased again on Monday and today the market catches [...]

After a week of bludgeoning in which mortgage rates rose as much as 0.50% on the heels of a supposed housing sector rebound, don’t expect the fireworks to stop anytime soon. This Monday and Tuesday will be quiet with respect to economic releases, but Wednesday through Friday will be jammed-packed with mortgage-rate-moving data. The highlights [...]

Mortgage bonds continue their slide after yesterday’s outright hysteria. Today’s New Homes Sales showed a 4.8% jump in December to an annualized pace of 1.12 million homes. This is about 14% higher than July’s pace and some economists are wondering if "housing stability" just turned into "housing rebound". Home supply plummeted from 7.2 months to [...]

Existing Home Sales showed weaker-than-expected numbers this morning, but that hasn’t stopped the slide in mortgage-backed securities. This is a counter-intuitive movement so let’s take a deeper look. First, the supply of homes dropped from 7.3 months to 6.8 months. With less supply, there is a tendency for home values to stabilize and that is [...]

With the Federal Open Market Committee scheduled to meet for two days beginning January 30, the Fed has entered "blackout mode" and no Fed speakers are slated for the next week. Combine Fed Silence with lack of economic data, and market are moving on emotion and gut feel. That’s bad news for rate shoppers because [...]

Adding complexity to the home financing process, The Tax Relief and Health Care Act of 2006 includes new tax code for homeowners. The act grants itemized deductions for private mortgage insurance (PMI) and government mortgage insurance (MIP) expense premiums paid in 2007. For all loans originated in the 2007 calendar year, mortgage insurance is tax-deductible [...]

Last week, economic data showed that the economy continues to grow at a healthy pace and that last year’s fears of an economic recession may have been overblown; wholesale and consumer prices were up 1.1% and 2.5% annually, respectively. With no clear recessionary indicators present in the market, long-term mortgages such as the 30-year fixed [...]

Today’s University of Michigan Consumer Sentiment survey showed that Americans are feeling terrific about the state of the economy. The index jumped to 98.0 in January from last month’s 91.7 level. On a broader level, this is not an important piece of data for mortgage markets. The idea is that a more confident consumer will [...]