8/16/16

August 16th, 2016

What Is Going On With Interest Rates?  #wigowir

10:09 AM ET New Rates have been posted

30-Year Fixed 3.375% (3.457% APR) No Origination Fee  

15-Year Fixed 2.750%   (2.892% APR) No Origination Fee

7-1 ARM 30 year 3.000% (3.341% APR) No Origination Fee

  • 30-Year Fixed-Rate Mortgage: The monthly payment on a $200,000 30-year Fixed-Rate Loan at 3.375% and 70% loan-to-value (LTV) is $884.19 with 0 points due at closing. The Annual Percentage Rate (APR) is 3.457%. 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 2.750% and 70% loan-to-value (LTV) is $1357.24 with 0 points due at closing. The Annual Percentage Rate (APR) is 2.892%. 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.
  • 7-1 30 year ARM for $200,000 with an Initial Interest Rate of 3.000% (3.334% APR) your monthly payments for years 1 – 7 would be $870.41 and for years 8 -30 monthly payments would be $886.87 (based on the current Index  of  1.210% Plus Margin of 2.25% to $417,000 and 2.5% to $900,000).  Monthly payments do not include taxes and insurance and the actual payment obligation will be greater.  Your variable interest rate is subject to a floor of your Initial Interest Rate.  Your variable interest rate can increase or decrease after the seventh year by 2 percentage points annually and can increase 4 percentage points over your Initial Interest Rate over the term of your loan.  The index for this loan program is the average of the interbank Offered Rates for One Year Denominated Deposits in the London Market (LIBOR)

For more rates and details click: http://www.johnmarbury.com/page5.html/

 

Commentary:

When the price of Mortgage Backed Securities (MBS) on the Chart above goes down Rates Go Up.  Currently the price is going down.  The Green Line or 25 day moving average was our friend and floor of support.  Now is our enemy and the ceiling of resistance.  The Black Line or 50 day moving average is now the floor of support.  Notice on the candle how we touch this line only to be bounced higher.  Today prices are lower from the better than expected July Housing Starts which is the highest it has been in 5 months and the second highest level since the recession.  The housing starts figure is led by multi-family units. 

For more information call (205-266-5669) or email (jmarbury@nationalbankofcommerce.com) John.

Thanks!

Below is the news when it happened and the market’s reaction.  All Times are Eastern Standard Time. 

 

10:19 AM
MBS at session lows.

10:05 AM
Stocks continue to cut losses, MBS drifting lower.

9:50 AM
Stocks trying to cut some opening losses.

9:37 AM
Stocks open lower, Dow -76 points.

9:07 AM
New York Fed President Dudley says an interest rate hike in September is possible. There is now a 12% chance of a hike in September, up from 9% before Dudley's comments.

9:02 AM
The 3% Fannie Mae 30-yr did test support at the 50-day Moving Average (103.51), but quickly bounced back to support at the 25-day.

8:54 AM
Building Permits -0.1% from June to an annual rate of 1.152 million, inline.

8:53 AM
July Housing Starts +2.1% from June to an annual rate of 1.21 million units vs the 1.167 million expected.

8:49 AM
The 3% Fannie Mae 30-yr coupon drops below support at the 25-day Moving Average.

8:42 AM
MBS quickly give up gains after better-than-expected Housing Starts and the Core CPI annual rate hovering just above 2% at 2.2%.

8:32 AM
July CPI unchanged, inline. Core CPI 0.1% vs the 0.2% expected.

Core CPI annually 2.2%, below the 2.3% in June.

8:28 AM
The minutes from the July Fed meeting will be released tomorrow at 2:00 p.m. ET.

July CPI set to be released along with Housing Starts/Building Permits at 8:30.

WTI oil continues to edge higher +$0.26 to $46/barrel.

Fed Fund Futures show just a 9% chance of a hike to the Fed Funds Rate at the September meeting and a 37% chance of a hike in December.

Stock futures lower a day after the Dow (18,636), S&P (2,190) and the Nasdaq (5,262) closed at record high levels.

10-yr T Note yield 1.53%.

Mortgage Bonds gaining back some of yesterday's losses.

Bond prices improve as the dollar drops. U.S. dollar index 94.61, -0.98.

 
 

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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