Mortgage Rates & the Great Unwind Begins this week

October 10th, 2017

Rates Effective October 10th, 2017 10:30 AM EST

*30-Year Fixed Rate 4.000% (4.087%APR)

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

Conforming loans $424,100 and under

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

Suggestions that can change during the day: Mortgage Bonds are edging higher to begin the holiday shortened week. Carefully floating is recommended.

After close Commentary: The Fannie Mae 30-yr 3.5% coupon closed at its midway point in today's trading range closing near unchanged, despite the Dow hitting a fresh record high. The Bond closed at 102.94, unchanged. Stocks rose after Wal-Mart announced a $20B share buyback. The Dow closed at a fresh record high of 22,830.68, +69.61 points, the S&P closed at 2,550.64, up 5.91 points while the NASDAQ gained 7.52 points to end the session at 6,587.25. WTI oil closed at $50.92/barrel, +$1.34. 10-yr yield 2.35%. There are no economic reports due for release tomorrow. The Treasury will offer $24B 3-yr Notes tomorrow, results at 11:30 a.m. ET while it will also offer $20B 10-yr Notes, results at 1:00 p.m. ET.

Article about the Great Unwind: http://www.npr.org/sections/thetwo-way/2017/09/20/552363602/feds-unwinding-of-crisis-programs-expected-to-push-up-interest-rates-very-gradua

From blog 9/22/17: https://www.johnmarbury.com/blog/10279/mortgage-rates--the-great-unwind-

What is the Great Unwind? 

Defined by TheGuardian https://www.theguardian.com/business/2017/sep/20/federal-reserve-financial-crisis-stimulus-sell-off-interest-rates 

info from the article: The Federal Reserve has announced it will begin the great unwinding of the gargantuan stimulus programme it began close to a decade ago in the teeth of the worst recession in living memory.

Late morning Commentary:   Fannie Mae reported its September Home Purchase Sentiment Index (HPSI) on Monday revealing overall housing confidence is up on rising renter optimism. The Fannie Mae HPSI increased 0.3 points in September to 88.3, matching the all-time high set in June. Americans who feel that it is a good time to buy a home rose last month. Renter respondents also showed increased optimism on purchasing a home. “The biggest driver for the increase in the HPSI is the rebound in the good time to buy sentiment, which outweighed the largest drag—a sizable reduction in the net share of consumers expecting home prices to rise over the next year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

The NFIB Index of Small Business Optimism fell in September from 105.3 to 103.0, led by a big drop in sales expectations, not just in the storm-affected states, but across the nation. Within the report it showed that the number of small business owners who expected better sales plunged a net 12 points last month. Owners who think that it’s a good time to expand dropped a net 10 points. The NFIB says that the index remains very high by historical standards.

Analytics firm CoreLogic reports that the U.S. foreclosure rate remained at a 10-year low in July as the housing market continues to improve. The report showed that in July 2017, 4.6% of mortgages were delinquent by at least 30 days or more including those in foreclosure. That is below the 5.5% rate in July 2016. In addition, as of July 2017, the foreclosure inventory rate was 0.7% lower from 0.9% in July 2016. 

Tue, Oct 10 8:49 AM The NFIB Index of Small Business Optimism fell in September from 105.3 to 103.0 led by a big drop in sales expectations, not just in hurricane-affected states, but across the country.
Tue, Oct 10 8:46 AM CoreLogic reports that July 2017 U.S. foreclosure rate remained at a 10-yr low.
Tue, Oct 10 8:34 AM The Fannie Mae Home Purchase Sentiment Index® increased 0.3 points in September to 88.3, matching the all-time high set in June.
Tue, Oct 10 8:18 AM U.S. dollar index 93.17, -0.33.
Tue, Oct 10 8:17 AM There are no economic reports due for release today.
Tue, Oct 10 8:16 AM Quarterly earnings will be in focus this week.
Tue, Oct 10 8:12 AM 10-yr yield 2.35%, just below Friday's close of 2.36%.
Tue, Oct 10 8:11 AM The Treasury will offer a total of $56B in Notes and Bonds this week beginning on Wednesday.
Tue, Oct 10 8:09 AM The week features data on wholesale inflation from the Producer Price Index and consumer inflation from the Consumer Price Index.
Tue, Oct 10 8:06 AM MBS open near unchanged as the holiday shortened week begins.

***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 4.000% and 70% loan-to-value (LTV) is $954.83 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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