Mortgage Rates & Tame Inflation

August 1st, 2017

Suggestions that can change during the day: Tame inflation lifts Mortgage Bond prices above key technical levels. Carefully floating is recommended.

Rates Effective August 1, 2017 10:56 AM 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 4.000% (4.087%APR)

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

After close Commentary: After some early morning selling, MBS jumped today on tame inflation data (Core PCE) and a mixed June Personal Income & Spending report. The benchmark 3.5% Fannie Mae 30-yr coupon rose by 19bp to end the session at 103.12 and above all of the moving averages below. Stocks rose on strong earnings. The Dow closed at yet another record high of 21,963.92, +72.80 points. The S&P closed at 2,476.35 up 6.05 points, while the tech heavy NASDAQ gained was up 14.81 to 6,362.93. WTI oil closed at $49.16, -$1.01. 10-yr T Note yield fell to 2.25%. July ADP Private Payrolls will be released tomorrow morning.

Late morning Commentary:  Data analytics firm CoreLogic reported on Tuesday that home prices, including distressed sales, rose 6.7% from June 2016 to June 2017 due in part to the continued theme: limited homes for sale on the market. On a monthly basis, prices were up 1.1%. “Home prices are marching ever higher – up almost 50% since the trough in March 2011," said Frank Martell, president and CEO of CoreLogic. "With no end in sight, affordability is rapidly deteriorating nationally and especially in some key areas such as Denver, Houston, Miami and Washington.”

Inflation remained tame in June; the low levels could keep the Federal Reserve from raising the short-term Fed Funds Rate anytime soon. The Fed's favorite inflation gauge, the Core Personal Consumption Expenditure, rose 1.5% annually in June, which is below the Fed's target range of 2%. The report also showed that Personal Incomes were unchanged during the month, while Personal Spending was up 0.1%, matching expectations.

Construction spending across the nation declined in June due in part to a decrease in investments in public projects, reports the Commerce Department. Construction spending fell 1.3% in June to $1.21 billion, the lowest number since September 2016. Investments in public construction projects declined 5.4% during June, the biggest decline since March 2002. In addition, private construction projects fell 0.1%, while private residential construction fell 0.2%.

9:17 AM ET  3.5% Fannie Mae 30-yr coupon down 6 bp at a price of 102.88  up 3 bp when rates were set today at 10:00 am et Open 102.88 High 102.88 Low 102.84

Dailey Moving averages we are currently above: 100  $102.67 200  $102.75    25 102.74  and below 50 102.95   Others numbers to watch High of 5/16/17 $102.78  

Tue, Aug 01 8:47 AM The year-over-year Core PCE 1.5%, below the Fed's target range of 2%.
Tue, Aug 01 8:35 AM CoreLogic reports that home prices, including distressed sales, rose 6.7% in June 2017 from June 2016, +1.1% from May 2017 to June 2017.
Tue, Aug 01 8:33 AM June Core PCE in line at 0.1%.
Tue, Aug 01 8:31 AM June Personal Income 0.0% vs 0.3%. Personal Spending 0.1%, in line.
Tue, Aug 01 8:23 AM S&P futures higher on strong earnings season. Apple earnings after the close today.
Tue, Aug 01 8:22 AM U.S. dollar index 92.86, +0.14.
Tue, Aug 01 8:21 AM 10-yr yield 2.30%, near unchanged.
Tue, Aug 01 8:17 AM MBS open flat to lower ahead of the 8:30 ET release of June Personal Income & Spending and Core PCE.

**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 4.087%. 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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