Mortgage Rates and Tame CPI (Consumer Inflation)

August 11th, 2017

Suggestions that can change during the day: Mortgage Bond prices are stalling at the 2017 highs, while mortgage rates are at the 2017 lows. Locking is recommended.

Rates Effective August 11th, 2017 12:30 PM EST

No origination on all posted rates.  Call for other rates. **Rate Assumptions below the news

Conforming loans $424,100 and under

30-Year Fixed Rate 3.875% (3.961%APR)

15-Year Fixed Rate 3.250% (3.397% APR)

After close Commentary: MBS traded near the flat line for most of the session as traders were loathe to take on any new positions at such frothy levels. MBS are near the highs seen in November with mortgage rates at the 2017 lows. This morning's tame inflation data couldn't light a fire to fuel any kind of rally today. The 3.5% Fannie Mae 30-yr coupon closed near unchanged at at 103.28. The Dow gained 14.31 points to 21,858.32, the S&P 500 was up 3.11 points to 2,441.32, while the NASDAQ closed at 6,256.55, +39.68 points. WTI oil closed at $48.82/barrel, +$0.23. 10-yr T Note yield 2.18%. Next week's economic calendar is on the heavy side with reports on housing, manufacturing, and consumer spending. Have a great weekend!

Late morning Commentary:  The Bureau of Labor Statistics reported on Friday that when stripping out volatile food and energy, the Core Consumer Price Index (CPI) was unchanged in July from June. The Core CPI continues to remain tame and has been moving lower since earlier in the year. The Core CPI rose by 1.7% year-over-year and is moving in the opposite direction of where the Fed wants to see inflation. While Core Personal Consumption Expenditures (PCE) is the Fed’s favorite inflation gauge, the Core CPI is a close second. The Fed’s inflation target is 2.0%, and both the Core PCE (1.5%) and the Core CPI are moving in the opposite direction of that number.

A recent poll of economists by Reuters reveals that the current U.S. economic expansion will continue for at least another two years, but the economy will not grow as much as the Trump administration predicted. Of the 54 surveyed, 34 of those said the expansion has two more years to go, with 21 of the 34 saying it would last at least two to three years and 13 said more than three years. The Trump administration predicted Gross Domestic Product would rise by 3% annually, but the latest poll sees growth of 2.1% to 2.5% each quarter to the end of 2018.

9:53 AM ET  3.5% Fannie Mae 30-yr coupon down 3 bp at a price of 103.19  down 16 bp when rates were set yesterday at 10:00 am et Open 103.22 High 103.44 Low 103.12

**Mortgage Bonds had their monthly coupon rollover after the close of trading last night, with the effect being being -19bp for the Fannie Mae 30-year 3.5% coupon.  This has no effect on yields.

After a Google Search of: What is a Bond Coupon Rollover?

This is what I found: The Bond Coupon Rollover is an event that happens every month at which time the current month's coupon is closed out and any new loans are placed with next month's coupon.

For more info go to the followng link: http://activerain.com/blogsview/1595309/what-is-a-bond-coupon-rollover-

Dailey Moving averages we are currently above: 100  $102.82 200  $102.67   25 102.92  and below 50 102.97   Others numbers psychological numbers 103.00 , 103.19, 103.34

Fri, Aug 11 8:40 AM Stock futures reverse into positive territory after this week's tame inflation data could keep interest rates on hold by the Fed.
Fri, Aug 11 8:38 AM The Core CPI year-over-year 1.7% from the 2.2% in February.
Fri, Aug 11 8:36 AM Year-over-year CPI 1.7%, down from the February high of 2.7% as inflation continues to edge lower.
Fri, Aug 11 8:35 AM July Consumer Price Index (CPI) 0.1% vs 0.2% expected. Core CPI 0.1% vs 0.2% expected.
Fri, Aug 11 8:33 AM MBS trade near unchanged while Treasury prices push higher.
Fri, Aug 11 8:11 AM WTI oil $48.37/barrel, -$0.20.
Fri, Aug 11 8:04 AM U.S. dollar index 93.38, +0.08.
Fri, Aug 11 8:02 AM The Consumer Price Index will be released at 8:30.
Fri, Aug 11 7:51 AM MBS look to open modesty higher.
Fri, Aug 11 7:51 AM 10-yr yield edges lower to 2.19%, lowest since late June.
Fri, Aug 11 7:50 AM Stock futures lower as the North Korean fears linger.
Fri, Aug 11 7:49 AM President Trump again warns North Korea on threats to the U.S. and allies.
Fri, Aug 11 7:47 AM Mortgage Bonds had their monthly coupon rollover after the close of trading last night, with the effect being being -19bp for the Fannie Mae 30-year 3.5% coupon

**Rate Assumptions

Actual payments will vary based on your individual situation and current rates. The above rates are subject to change.

  • Some products may not be available in all states.
  • Jumbo Rates (loans over $424,100) not be available to first time home buyers.
  • Lending services may not be available in all areas.
  • Some restrictions may apply.
  • Based on the purchase/refinance of a primary residence with no cash out at closing.
  • We assumed (unless otherwise noted) that: closing costs are paid out of pocket; this is your primary residence and is a single family home; debt-to-income ratio is less than 30%; and credit score is over 780; and an escrow account for the payment of taxes and insurance.
  • The lock period for your rate is 30 days.
  • The loan to value (LTV) ratio is 70%. If LTV > 80%, PMI will be added to your monthly mortgage payment for all conventional loans.
  • Rates assume a credit score of at least 780.
  • Please remember that we don’t have all your information. Therefore, the rate and payment results you see from this calculator may not reflect your actual situation. National Bank of Commerce offers a wide variety of loan options. You may still qualify for a loan even if your situation doesn’t match our assumptions. To get more accurate and personalized results, please call (205) 266-5669 to talk to John Marbury.
  • 30-Year Fixed-Rate Mortgage: The monthly payment on a $200,000 30-year Fixed-Rate Loan at 3.875% and 70% loan-to-value (LTV) is $940.47 with 0 points due at closing. The Annual Percentage Rate (APR) is 3.961%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.
  • 15-Year Fixed-Rate Mortgage: The monthly payment on a $200,000 15-year Fixed-Rate Loan at 3.250% and 70% loan-to-value (LTV) is $1405.34 with 0 points due at closing. The Annual Percentage Rate (APR) is 3.397%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply

Johnmarbury.com has attempted to verify the information contained on this post.  However any aspect of such may change without notice.  Johnmarbury.com does not provide investment advice and does not represent that any of the information or related analysis is accurate or complete at any time. Forgive my spelling and grammatical mistakes due to writing skills that are lacking and the need to communicate quickly.  

Contact

John Marbury
jmarbury@nationalbankofcommerce.com
NMLS# 740833
Phone:205-266-5669
Fax: 866-217-4174

813 Shades Creek Parkway
Birmingham, Alabama 35209
 

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As a loan officer (mortgage broker 1989-2006) since 1985, I have seen a lot of changes over the years. The only consistency in the mortgage business and life is change. This is the reason that we believe it is necessary to move quickly and to be early. Let us know if you have any questions or if we can help in any way.

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