Thursday's Suggestion Locking is Recommended

June 8th, 2017

Suggestion: Mortgage Bond prices are modestly lower, while Stocks trade near unchanged,and mortgage rates at near 6 month lows, locking  is recommended.

Overview:  Mortgage rates continued to edge lower this week as Bond prices rose and yields declined. The 30-year fixed rate mortgage fell to 3.89% from 3.94% in the previous week with 0.5 in points and fees. A year ago the rate was 3.60%. A spokesperson from Freddie Mac said recent mixed economic data and increasing uncertainty are continuing to push rates to the lowest levels in nearly seven months.

Americans filing for first time unemployment benefits fell in the latest week and remain near multi-decade lows as the sector continues to gain strength. Weekly Initial Jobless Claims fell 10,000 to 245,000 but were above the 240,000 expected. First time claims have remained below the 300,000 mark for 118 straight weeks, the longest stretch since 1970, when the labor met was smaller. The four-week moving average, which irons seasonal abnormalities, rose 2,250 to 242,000 last week. Those who continue to claim benefits after an initial week declined 2,000 to 1.92 million in the week ended May 27.

CoreLogic reported on Thursday that due to rising home prices, 91,000 residential properties regained equity in the first quarter of 2017. The number of mortgaged residential properties with equity is now at 48.2 million. CoreLogic went on to report that approximately 3.1 million homes, or 6.1% of all residential properties with a mortgage, were still in negative equity at the end of the first quarter of 2017. "Since home equity is the largest source of homeowner wealth, the increase in home equity also supports consumer balance sheets, spending and the broader economy.” said Frank Martell, president and CEO of CoreLogic.

What Is Going On With Interest Rates?  #wigowir

 

Below is the news when it happened and the market’s reaction.  For a full view of the day start at the bottom and work your way up. If want to know what just happened start at the top. All Times are Eastern Standard Time.  When the price of Mortgage Backed Securities (MBS) goes down rates go up, and when the price goes up rates come down. Remember in the bond market Bad News is Good News and Good News is Bad news.

 


Not a lot of movement in MBS today despite the ECB headlines and the testimony from former FBI Director Comey on Capitol Hill. The Fannie Mae 30-yr 3.5% coupon closed at 103.28, -6bp and sitting right on support at the 200-day Moving Average. Stocks also produced a lackluster session. The Dow closed at 21,182.53, the S&P at 2,433.79, both near unchanged while the NASDAQ gained 24.38 points to end at 6,321.76. WTI oil closed at $45.64/barrel near unchanged. 10-yr yield 2.19%. There are no economic reports due for release tomorrow.
Thu, Jun 08 3:17 PM Despite Stocks trading near unchanged, MBS flat to lower in rangebound trading.
Thu, Jun 08 12:54 PM At midday, MBS lower, Stocks modestly higher. 10-yr yield 2.20%
Thu, Jun 08 11:08 AM Next week, the Treasury will sell $24B 3-yr Notes and $20B 10-yr Notes on Monday, $12B 30-yr Bonds on Tuesday.
Thu, Jun 08 10:43 AM Comey: reasons for my firing doesn't make sense. Not much impact on the Mortgage Bond markets during his testimony.
Thu, Jun 08 10:26 AM Comey: no doubt the Russians interfered with 2016 election.
Thu, Jun 08 10:24 AM Former FBI Director Comey says the president did not ask him to stop the election probe.
Thu, Jun 08 10:08 AM Freddie Mac reports that the 30-yr fixed-rate mortgage fell to 3.89% this week from 3.94% with 0.5 in points and fees.
Thu, Jun 08 9:58 AM CoreLogic reports that nearly nine million borrowers have regained equity in their homes since the height of the crisis in 2011.
Thu, Jun 08 9:45 AM The S&P pushes into positive territory.
Thu, Jun 08 9:34 AM The S&P trades near unchanged soon after the opening bell on Wall Street.

 9:08 AM ET  3.5% Fannie Mae 30-yr coupon down 3 bp at a price of 103.31  down 12 bp when rates were set yesterday at 10:00 am Open 103.25  High 103.34  Low 103.22

 

Numbers to watch for:

Currently Buying Opportunities for Traders

102.79  50 day moving average

102.91 25 day moving average

103.00  Traders keep their eye on round numbers and this is one them with lots of zeros    

103.12  Traders keep their eye numbers that have been resistance or support in the past.  This is one of them.

103.20 200 day moving average

Currently Selling opportunities for Traders

 

103.59  High of 11/17/16

104.12  High of 11/10/16

 

Thu, Jun 08 9:01 AM Home flipping finance volume increased in the first quarter of 2017 to its highest point in nine years.
Thu, Jun 08 8:57 AM The New York Fed will purchase up to $1.625B in Fannie/Freddie 30-yr 3.5% and 4% coupons beginning at 11:15 a.m. ET.
Thu, Jun 08 8:50 AM The ECB did not discuss tapering its balance sheet.
Thu, Jun 08 8:40 AM ECBs Draghi says inflation still subdued.
Thu, Jun 08 8:33 AM Weekly Initial Jobless Claims decline 10K to 245K vs 240K expected.
Thu, Jun 08 8:23 AM Stock futures shedding gains.
Thu, Jun 08 8:17 AM Weekly Initial Jobless Claims will be released at 8:30.
Thu, Jun 08 8:15 AM U.S. dollar index 96.91, +0.20.
Thu, Jun 08 8:11 AM U.S. dollar index $45.47/barrel, -$0.25, a one-month low.
Thu, Jun 08 8:07 AM MBS open lower as the Fannie Mae 30-yr 3.5% coupon sits on support at the 200-day Moving Average.
Thu, Jun 08 8:03 AM Former FBI Director Comey will be on Capitol Hill beginning at 10:00 a.m. ET in front of the Senate Intel Committee.
Thu, Jun 08 8:02 AM The U.K. elections are underway where the Conservatives are expected to win.
Thu, Jun 08 8:01 AM The ECB leaves interest rates unchanged but omits phrasing that rates may be cut again.
Thu, Jun 08 8:01 AM MBS look to open modestly lower.
Thu, Jun 08 8:01 AM 10-yr yield at 2.20% from yesterday's close of 2.17%.

 

 

 

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. On October 5th we started posting our rates and leaving them on the site for you to refer back to. This will allow  you see where actual rates have been along with the news that caused the fluctuations on the rate sheet.  I ask that you forgive my spelling and grammatical mistakes. This is due writing skills that are lacking and the need to communicate quickly.  Most of the information posted on this blog along with the charts and indexes are available all during the day to the subscribers of www.themortgagemarketguide.com  The cost of subscription is very reasonable.

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