Mortgage Rates, North Korea & Money move to Safe Havens

September 5th, 2017

Rates Effective September 5, 2017 10:30 AM EST

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

**15-Year Fixed Rate 3.125% (3.271% APR)

Conforming loans $424,100 and under

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

Suggestions that can change during the day: Ongoing North Korean tensions push Stocks lower and Mortgage Bond prices higher. Floating is recommended to begin the week.

After close Commentary: MBS opened higher and never really looked back in today's session and continued to climb the further Stocks traded into the red. The gains took place in response to North Korea's nuclear test, which took place on Sunday at noon local time. There were no economic reports released today. The Bond closed higher by 34bp to end at 103.81. Stocks fell on the North Korean news along with concerns on tax reform, the debt ceiling and on some plain old fashioned profit taking. The Dow lost 234.25 points to 21,753.31, the S&P fell by 18.70 points to 2,457.85, while the NASDAQ dropped by 59.75 points to end at 6,357.57. WTI oil closed at $48.66/barrel, +$1.35. 10-yr yield 2.06%, the lowest close since November 10. The ISM Service Index will be released tomorrow along with the Fed's Beige Book.

Late morning Commentary:   Analytics firm CoreLogic reported this morning that home prices, including distressed sales, rose 6.7% from July 2016 to July 2017. From June, home prices increased 0.9% month over month. CoreLogic says the "combination of steadily rising prices along with very tight inventory of unsold homes should keep upward pressure on home prices for the remainder of the year." Looking ahead, CoreLogic forecasts that prices will increase 5% on a year-over-year basis from July 2017 to July 2018 with a 0.4% gain from July 2017 to August 2017.

Rising tensions in North Korea over the weekend are playing a big role in the safe haven push out of Stocks and into U.S. Bonds. U.S. Ambassador to the United Nations Nikki Haley said on Monday it was time for the U.N. Security Council to impose "the strongest possible measures"on North Korea over its sixth and largest nuclear test because "enough is enough."
September is typically the worst month of the year for Stocks, with the S&P 500 falling 60% of the time and 0.5% on average. This is worth following considering all of the headline risk abound - inept Congress, debt ceiling, tons of global central bank activity and of course - North Korea.

Gas prices continue to spike due to many refineries shutting down in the Gulf Coast after Hurricane Harvey ripped through the area. The national average price for a regular gallon of gasoline surged to $2.64 on Monday, up $0.27 in the past week. A year ago the price was $2.20. The highest recorded price on record was $4.11 hit back on July 17, 2008. The last time the national gas price average was $2.50 was two years ago in August of 2015. 

11:52 AM ET  3.5% Fannie Mae 30-yr coupon up 28 bp at a price of 103.75  up 6 bp when rates were set today at 10:00 am et Open 103.56 High 103.78 Low 103.56

Dailey Moving averages we are currently above:  200 $102.57  100  $102.97   50 103.03  and 25 103.28 Others numbers psychological numbers New First level of Support 103.47,  New Second Level of support $103.34

First level of resistance $103.69 low of 11/10/16 Second level of resistance $103.90 half of the trading range of 11/10/16.  The Presidential election was 11/08/16.  On that day the MBS closed at $104.91

Tue, Sep 05 10:55 AM CoreLogic also reported that while mortgage interest rates remain low, affordability cracks are emerging as over a third of U.S. top cities are now overvalued.
Tue, Sep 05 10:50 AM The 10-yr yield falls to 2.08%.
Tue, Sep 05 10:44 AM The national average price for a regular gallon of gasoline at $2.64, spiking $0.27 in the past week due to refineries shutting down in the Houston area.
Tue, Sep 05 10:40 AM MBS at session highs holding solid gains.
Tue, Sep 05 10:38 AM Dow -135 points as investors sell on the North Korean tensions and also on profit taking with Stocks at lofty levels.
Tue, Sep 05 9:39 AM The New York Fed will purchase up to $2.05B in Fannie/Freddie 30-yr 3% and 3.5% coupons beginning at 11:115 a.m. ET.
Tue, Sep 05 9:31 AM Stocks open lower. Dow -75 points on North Korean tensions.
Tue, Sep 05 8:35 AM CoreLogic reports that home prices, including distressed sales, rose 6.7% year over year in July 2017 compared with July 2016 and increased month over month by 0.9% in July 2017 from June 2017.
Tue, Sep 05 8:21 AM WTI oil +$0.81, at $48.11/barrel.
Tue, Sep 05 8:19 AM There is a near zero percent chance of a hike to the short term Fed Funds Rate at the September 20 Federal Open Market Committee meeting.
Tue, Sep 05 8:18 AM September is typically the worst month of the year for Stocks, with the S&P 500 falling 0.5% on average.
Tue, Sep 05 8:17 AM There are no economic reports due for release today and the rest of the week's calendar is on the light side.
Tue, Sep 05 8:16 AM S&P futures cuts some losses after Brainard's comments.
Tue, Sep 05 8:11 AM Fed Governor Lael Brainard (dove, voter) just says the central bank may have to slow the pace of interest rate hikes due to low inflation levels.
Tue, Sep 05 8:10 AM The U.S. dollar index 92.52, -0.25.
Tue, Sep 05 8:09 AM The 10-yr T Note yield edges lower to 2.14% from 2.15% on Friday after the tepid Jobs Report for August.
Tue, Sep 05 8:05 AM U.S. Ambassador to the United Nations Nikki Haley said on Monday it was time for the U.N. Security Council to impose "the strongest possible measures" on North Korea over its sixth and largest nuclear test because "enough is enough."
Tue, Sep 05 8:01 AM MBS look to open near unchanged to slightly higher as S&P futures decline due to ongoing North Korean headlines and tensions.

***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 3.125% and 70% loan-to-value (LTV) is $1393.22 with 0 points due at closing. The Annual Percentage Rate (APR) is 3.271%. 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
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Phone:205-266-5669
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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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