Mortgage Rates finally got some releif Wednesday through Friday as Bond Prices bounced of levels of support. I recommend cautiously floating, not locking into rates for the long term. Positive economic reports helped Bonds reverse direction. Consumer inflation for February was higher than consensus estimates and consumer sentiment was lower than analysts expected. Mortgage Bonds moved higher from the start and ended near the best levels of the day on Friday. The 3% coupon finished at $102.72, up 31bp. Remember, Mortgage Rates move in the opposite direction of Bond Prices.
The Dow’s ten day winning streak ended as the average lost 25.03 points to close at 14514.11. The S&P 500 was lower by 2.53 points, to end at 1560.70, while the Nasdaq dropped 9.86 points, to finish the session at 3249.07. Oil was last seen at $93.51/barrel up 48 cents. There are no major economic reports due out Monday.
Freddie Mac’s Primary Mortgage Market Survey showed the 30-year, fixed-rate mortgage for the week ending March 14 rose to 3.63%, up from 3.52% a week earlier, but down from 3.92% last year. The 15-year, FRM averaged 2.79%, up from 2.76% last week, but down from 3.16% a year ago. The survey’s rates factor in a cost of 1.50 points. Meanwhile, the 5-year Treasury-indexed adjustable-rate mortgage averaged 2.61% this week, down from 2.63% last week and down from 2.83% a year earlier. Additionally, the 1-year Treasury-indexed ARM averaged 2.64%, up from 2.63% a week ago and a drop from 2.79% last year.
“Fixed mortgage rates rose this week (March 4th) on stronger signs of jobs growth and consumer spending. The economy added 236,000 new workers in February which helped push down the unemployment rate to 7.7%,” said Frank Nothaft, vice president and chief economist of Freddie Mac.
The Average Mortgage in 2012
While we’re on the subject of credit, take a look at real estate blog Keeping Matters Current’s use of stats (from mortgage automation company Ellie Mae) to describe the average mortgage loan in 2012:
- Time to close — 48 days.
- Down payment — 21%.
- Credit score — 748 (37% of 200 million Americans have scores of 748 or higher.)
- Debt to income — Monthly house payment, 23%; total household debt, 34%.
- Interest rate — 3.90%.
Housing News
The Time & Place to Buy
By LISA PREVOST Published: March 7, 2013, New York Times
As both mortgage rates and housing prices head higher, home buyers may be wondering whether they ought to settle for whatever property they can get now, rather than risk paying more later. The answer depends on where you’re buying. Interest rates aren’t expected to rise much this year, but the same cannot be said for prices. Economists in recent interviews agreed that the rate for a 30-year fixed mortgage was unlikely to rise much above 4 percent this year. House prices, however, are rising nearly everywhere, and nowhere as rapidly as in the Sunbelt states. Read more
Economic News
First-time Jobless claims Fell by 10,000 to 332,000 in the week ended March 9, the fewest since mid January, according to data today from the Labor Department in Washington. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 350,000. The four-week average declined to a five- year low. “The rate of job destruction is pretty low,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida, who projected the number of claims would drop to 338,000. “The labor market is in continued-recovery mode, though there is still a lot of ground to make up.”
Retail sales increased 1.1% in February, up from 0.2% in January. This marked the biggest gain in the retail sales number in 5 months.
The retail sales report is a measure of the total receipts of retail stores from samples representing all sizes and kinds of business in retail trade throughout the nation. It is the most timely indicator of broad consumer spending patterns and is adjusted for normal seasonal variation, holidays, and trading-day differences.
Consumer Sentiment falls to 71.8 vs the 77.6 expected and down from 77.6 February.
CPI a bit hotter than expected at 0.7% vs the 0.5% expected. Core inline at
0.2%. Empire Manufacturing better than expected at 9.2 vs 6.5.
Sources: CNBC, Bloomber, MMG, Housingwire, NY Times