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Thursday, December 18, 2014

Mortgage Bond Market Analysis - Beat-down Edition

It's forgotten Thursday - day after "Hump" day and day before TGIF.  So far this day is forgettable relative to the performance of the benchmark bond.  Initial jobless claims came in a tad lower than expected at 289K vs. 295 expected.  This good news follows yesterday's beat-down which was, in part, spurred by the recovery of the Russian Rubel.  Yesterday also got a lift from the Fed when Yellen basically said that while they won't raise the Fed Funds rate for  a little while, it is on the horizon as economic statistics are all starting to look better.

After Yellen's comments in the afternoon we saw a lot of volatility.  There were three 20+ point swings with one of 31 basis points (up) and the next of 35 basis points (down).  Obviously there is dissent or confusion in the market as to the true strength of the recovery as well as the timing of the rate increases.  The FNMA benchmark bond closed down 27 basis points yesterday and with the good news regarding the jobless claims, sellers are winning the day so far with the benchmark bond currently down 27 basis points at 103.87 which is 1 basis point below the 1st level of resistance.  Here's the chart:

I'm not one to say I told you so (o.k., sometimes I am) but I do always say that for news / data releases like FOMC speeches and jobs data (jobless claims are every week on Thursday morning at 5:30 a.m. Pacific time), it's usually a good bet to lock ahead of these things to be safe.  Between the losses from yesterday and this morning, we are looking at an increase in rate of .125% or an increase in fee of about .5 points.  In the case of locking loans, I think it's better to be safe than sorry, especially if you have the option of floating down if rates get significantly better.

Please feel free to share your thoughts in the comments section and subscribe to my blog.  Call me if I can help with anything mortgage-related - 702-812-1214.  Make it a great day.

Tuesday, December 16, 2014

Mortgage Bond Market Analysis - What's going on with the volatility this morning?

Good day and sorry for the late post, but...we have some good news regarding the mortgage bond market this morning.  Despite some good news on the economic data front with housing starts and building permits both coming in above the million mark (but below expectations), the benchmark bonds are performing well.  Thanks to an implosion of the Russian Ruble last night, the FNMA benchmark bond is currently up 28 basis points on the day (it was down 27 basis points yesterday).

There has been quite a bit of volatility as it has bounced off the 1st level of resistance twice and the 1st level of support once.  It is currently 10 basis points off its high at 104.35 and 19 basis points off its recent lows for the day; it is one basis point above the first resistance level.  The RSI is not overbought but it is getting close.  Here's the chart:

It really is a great time to lock your interest rate if you have a loan closing soon.  The CPI is coming out tomorrow along with the Fed's interest rate decision - they will probably hold tight for now but they may give some hints as to if and when they might start raising interest rates in 2015 - some Fed officials are thinking around June while others are pushing for a later date.  Thursday we have initial and continuing jobless claims along with Leading Economic indicators and Philly Fed Manufacturing index.

Please feel free to share your thoughts in the comments section or contact me if I can help with anything - 702-812-1214.  Make it a great day.

Friday, December 12, 2014

Mortgage Bond Market Analysis - It's My Wife's Birthday edition

Happy Birthday to my beautiful wife.  Apparently the bond market likes the fact that my wife made it another year because it's been rallying this morning.  The PPI came in quite benign which is good for the bond market but the Michigan Consumer Sentiment Index had a reading of 93.5 vs. estimates of 89.5.  This kind of reading would usually adversely impact rates but with oil being as low as it is (which helps keep production and transportation costs lower) the market is still rallying.  The other oddity with such high consumer confidence is the fact that we aren't seeing follow through in related areas like great retail sales numbers - if consumer confidence is high, you would think they would be spending money and buying stuff.

At any rate, the benchmark bond is currently at 104.30 which is right at the 2nd level of resistance and is 15 basis points off its high for the day but is still up 24 basis points.  Here's today's chart:

We have some data releases everyday next week except for Friday.  If I had a loan to lock, I would lock now and take advantage of the recent gains but for those who might want to roll the dice (I live in Vegas) you can choose to float but make sure you are watching the market closely for any sudden moves that could erase our recent gains and negatively impact your rate.  Please feel free to share your thoughts in the comments section.  Call me if I can help with anything mortgage related:  702-812-1214.  Make it a great weekend.

Thursday, December 11, 2014

Mortgage Bond Market Analysis - Good economic news = benchmark bond sell-off

Good  morning and happy Thursday to you.  There wasn't a lot of data but what there was was good.  The Retail Sales (ex-auto) came in at .5 vs. expected of .2 and previous of .4 - this is negative for pricing.  The initial jobless claims came in a bit below expectations at 294K vs. 295K expected and previous of 297K.  This isn't a real big deal but being below 300K is a good thing.  The import price index is -1.5 vs. expectations of -1.8 so prices and inflation are under control - maybe too good.  The Fed's target inflation rate is about 2% and if prices are going down, that's good for consumers but not necessarily the economy.

The stock market was down big yesterday which is why bonds benefited and received a bid pushing their prices higher and the yields / rates lower.  This morning the benchmark FNMA 3.5 mortgage bond is currently down 19 basis points, 12 points of the morning lows, 25 basis points below the 1st level of resistance and 24 basis points above the 1st level of support.  Here's this morning's chart:

Tomorrow will bring us the PPI and the University of Michigan's consumer sentiment index (not much coming out of the University of Michigan in terms of decent football or basketball so at least they have this, right?).

It's a great time to lock to be safe.  If you decide to float, make sure you watch the market closely.  Some experts are predicting a Santa Clause rally in the stock market which would most likely mean higher rates.  Feel free to contact me if I can help with anything mortgage-related:  702-812-1214.  Make it a great day and please share your thoughts in the comments section or share the blogpost with friends and associates.

Sports note:, My alma mater, the University of Utah, took on BYU in basketball last night at BYU and the #13 Utah Utes won in a thriller, 65-61.  Next up is Kansas in Kansas on Saturday.

Tuesday, December 9, 2014

Mortgage Bond Market Analysis - What's going on?

Happy Tuesday Morning - if you're not invested in Greece or China.  So there's very little economic data and what data there is surprised to the up (good) side yet the benchmark bond is continuing yesterday's rally.  So what gives? While we were sleeping, the global equity markets were getting rocked. The two main culprits were China and Greece and the China stock market was down 5%+ and Greece’s down 11%+ (would be the equivalent move of 900-1000 points on the Dow). Apparently the powers that be in China sensing their economy is in a bit of a downturn and concerns over defaulting loans banned investors from using low-grade corporate bonds as collateral for short-term financing (that took a little air out of the bubble). Then separately of course Greece’s government decided to bring forward a parliamentary vote for president. The vote will now take place, two months ahead of schedule. The bleeding has of course found its way to the US and the Dow is down 192 (1%) and bonds are getting the benefit. Not sure they deserve it on their own but they are the world’s safe investment vehicle.  Here's today's chart:

The lack of data continues tomorrow so the market will again depend on direction from other sources like economic news from different parts of the world.  For now the benchmark bond is up 10 basis points, 18 off the high for the morning.  It's 3 basis points below the 1st level of resistance and 18 below the 2nd resistance level.  It's a good time to lock but if you decide to float, watch the market carefully because you never know when a big sell-off will happen.

Loan limits announced (and more):  FHA announced that their floor (maximum loan amount for low cost counties) is 65% of the conforming loan limit ($417,000) or $271,050.  The actual loan limits for individual counties have not been released yet - Clark County, Nevada is currently $287,500 and Salt Lake County, UT is currently $300,150.  

On a related note, FNMA and FHLMC have decided to offer financing to qualified borrowers with just 3% down.  This program went away shortly after the melt down, came back for a little while, when away again, and now, surprise, it's back.  This is a great alternative to FHA financing for those who qualify.  Here are some differences to keep in mind:  1) rates on conventional loans are very credit score driven and there are also loan level pricing adjustments for loan amount and LTV so the rates for the 97% LTV program will likely be a fair amount higher than FHA (.5% - .75% in my estimation).  2)  There is no upfront mortgage insurance on conventional loans. 3) The mortgage insurance rate for conventional financing at 97% is probably about .5% lower than FHA's annual mortgage insurance rate - this will roughly offset the higher interest rate, and 5) mortgage insurance for conventional loans automatically cancels when the loan balance reaches 78% of the original purchase price - FHA's is life of the loan unless you put 10% down (then it's 11 years).

This is a lot to digest but all in all the news is good - there's another good option for people to finance their home purchase.  I'm available if you have any questions or need a mortgage approval to purchase a home - 702-812-1214.  Make it a great day and feel free to share your thoughts in the comments section and share this post with your friends and associates.

Monday, December 8, 2014

Mortgage Bond Market Analysis - Happy Monday Edition

I lied.  I said there was no data today.  There is a tiny bit of data - the Labor Market Conditions Index - and it came in at 2.9 vs. previous of 4.0.  This may be having a slight impact on the buying in the bond market but the benchmark bond has been trending up all day.  Some weak economic data out of Japan and China are providing the current stimulus to the bond market.  Here's the chart:

Here are’s top 5 housing predictions for 2015:

1.       Millennials to drive household formation. Households headed by Millennials are expected to see significant growth in 2015, particularly as the economy continues to make gains. Millennials are expected to drive two-thirds of household formations over the next five years, according to®'s report. The forecasted addition of 2.5 million jobs next year, as well as an increase in household formation, are the two factors that® points to in driving more first-time home buyers to the housing market.
2.       Existing-home sales on the rise. Existing-home sales are projected to rise 8 percent year-over-year in 2015, as more buyers enter the market. Distressed properties will make up a smaller share of that growth, unlike in 2012, when a similar increase in existing-home sales was mostly driven by distressed properties.
3.       Home prices will rise. Home prices are expected to continue to edge up in 2015, with® forecasters predicting a 4.5 percent gain. "While first-time home buyers have many economic factors working in their favor, increasing home prices will make it more difficult to get into high-priced markets such as San Francisco and San Jose, Calif.,"® notes in its report. "As a result, first-time home buyer activity is expected to concentrate in markets with strong employment and affordability, such as Des Moines, Iowa; Atlanta; and Houston."
4.       Mortgage rates to inch up to 5 percent. In the middle of 2015, mortgage rates are expected to increase as the Federal Reserve increases its target rate by at least 50 basis points before the end of the year. That will likely bring the 30-year fixed-rate mortgage to an average of 5 percent by the end of 2015. (It's currently averaging 3.89 percent, according to Freddie Mac.) The 1-year adjustable-rate mortgage, on the other hand, is expected to rise more minimally. "Lower ARM interest rates will influence an uptick in buyer interest for adjustable and hybrid mortgages,"® notes. "While still at historic lows, rate increases will affect housing affordability for first-timers trying to break into the housing market and will be another factor pushing them to less-expensive locales."
5.       Housing affordability will decline. Affordability for homes, based on home-price appreciation and rising mortgage interest rates, will likely fall by 5 to 10 percent in 2015. However, the decline in affordability likely will be offset by an increase in salaries next year for many households. "When considering historical norms, housing affordability will continue to remain strong next year,"® notes.

Best news of the day (although it is not a done deal yet):  The House of Representatives passed some retroactive tax extenders for one year (hey we will take it). The Senate is expected to vote later this week and the most notable parts of the bill are:

1.       Section 163 Deduction for Private Mortgage Insurance. Allows taxpayers, subject to an income cap, to deduct premiums paid for private mortgage insurance. The deduction for PMI is expected to save home owners $919 million for tax year 2014.
2.       Bonus Depreciation. Extends the 50% bonus depreciation.
3.       Section 179 Expensing. Increases the maximum expensing amount to $500,000 for qualified property on up to $2 million in property placed in service.
4.       Short-sale mortgage debt forgiveness. The provision would extend through 2014 the exclusion from gross income of a discharge of qualified principal residence indebtedness due to a short sale.

Thanks for reading and please feel free to share your thoughts in the comments section and share this post with your friends / associates.  Don't hesitate to call me if I can help with anything mortgage related (whether I'm handling the loan or not).  Most of all, make today great. 

Friday, December 5, 2014

Mortgage Bond Market Analysis - Great Employment Report Edition

Good morning and TGIF.   Anytime an economic report is coming out that might adversely impact the benchmark mortgage bond, I always recommend locking in advance of the release.  Typically the data points that have the biggest impact on bond prices / rates are employment-oriented reports like the weekly jobless claims numbers that are released every Thursday and the monthly employment reports that are released on the first Friday of every month.  Well today is the first Friday and the non-farm payrolls came in at 321K vs. expectations of 232K and previous of 243K.  This is a huge beatdown and in a normal month, the sell-off in the bond market would likely be much worse.

December's not a normal month.  Bond traders understand that these numbers aren't real and probably won't be until February's employment report because there are a whole lot of seasonal workers that are figured into these numbers and most of them will probably not keep their jobs beyond the holiday season.  Additionally, an hour and a half after the employment data was released, we got the factory orders which came in much lower than expected at -.7 vs. expectations of +.1 and previous of +.5.  In reality, we have a mixed bag of data and a sell-off that equates to the benchmark bond now down 28 basis points.  Here's the chart:

Should I lock?  That's always the million dollar question and no one has a crystal ball but from the charts we can see a couple of things:  1) the trend for today looks to be down (top right - "Daily Chart") and 2) the low for the day approached the first level of support and bounced off so it's very possible that we finish the day somewhere between where we are now and 103.61 which is the support level.  If the traders decide to sell with a little more enthusiasm, the 2nd level of support at 103.52 could be tested.  I think the weak data on factory orders will temper the selling.  Additionally, there is no real data until next Thursday.  There is a bond auction on Wednesday that could impact pricing / rates but it could be quiet until then so you may be o.k. to float.  That said, rates are still fantastic and locking now wouldn't be a bad thing.

As always, please feel free to share your thoughts in the comments section and subscribe to my blog so you don't miss any of the reports.  Don't hesitate to call me if I can help you with anything mortgage-related even if I'm not handling the loan - 702-812-1214.  I hope you have some fun stuff planned for your weekend.  Make it a great one.

Wednesday, December 3, 2014

Mortgage Bond Market Analysis - Hump day edition

Happy Hump day (Geico Hump Day commercial).  December is a month that is about joy for Christians and Jews alike as we both celebrate important holidays but as far as the benchmark mortgage bond is concerned, there hasn't been any joy so far in December.  With no economic news on Monday, we saw a 29 basis point sell-off which was probably due to profit taking.  Yesterday we had one piece of economic data (construction spending) which came in higher than expected and the selling continued with a 24 basis point decline.

Hump day brought us ADP Private payrolls which came in below expectations at 208 vs. 221 expected and 233 previous but then we had the ISM Service Sector index coming in at a robust 59.3 vs. expectations of 57.5 and previous of 57.1  and we are seeing a bit more selling.  The market has rebounded off its lows for the morning and the benchmark bond is currently down only 1 basis point.  Here's the chart:

As you can see, the benchmark bond is now below the 1st level of resistance.  The RSI is also no longer overbought.  Tomorrow will bring us the jobless claims numbers and then on Friday we will get the all important non-farms employment report.  If you aren't a risk-taker, you may want to lock ahead of these reports - after all, rates are GREAT.

On a side note, for you college basketball fans, there are a couple of great games on tonight.  #2 Wisconsin plays #4 Duke and #8 Wichita State plays my alma mater, #25 Utah.  This is such a great time of year with the holidays coming up which means the kids will be off of school, lots of great college basketball and all of the college football bowl games.  Don't even get me started about all of the great food.  Please call me if I can help with anything mortgage-related.  Make it a great day.

Monday, December 1, 2014

Mortgage Bond Market Analysis - December 1st Edition

Happy December 1st - it's the start of the last month of the year.  I hope you had a great Thanksgiving.  It's hard to believe that this year is almost over.  There's only one piece of data this morning - The ISM Manufacturing index came in at 58.7 vs. expectations of 58 and previous of 59.  This is not going to have much of an impact on the benchmark bond.  Black Friday had no economic data points but investors / traders were in the mood to shop as they were buying bonds and pushing the price up 43 basis points to close at 104.36.

The only data point this morning is the ISM Manufacturing index and it came in at 58.7 vs. expectations of 58 and previous of 59.  The Relative Strength Indicator (RSI) is overbought so there is a possibility that traders may decide to take some profits off the table and sell - they need $$$ to fund their gift purchase.  As of this writing, the FNMA benchmark bond is up 1 basis point and is just below the 2nd level of resistance.  There is a plethora of economic data this week including ADP Private Payrolls on Wednesday, Continuing and Initial Jobless claims on Thursday and the employment report on Friday - the latter two usually have the biggest impact for bond traders.  There's other data releases as well but these are the biggest ones.  Here's today's chart:

A final check of the benchmark bond before I sign off shows it even on the day.  Please feel free to contact me if I can help you with anything mortgage-related - 702-812-1214.  Thanks and make today great.

Wednesday, November 26, 2014

Mortgage Bond Market Analysis - The Day Before Thanksgiving edition

Happy Hump Day and more importantly, Happy Thanksgiving.  There was a fair amount of data released today including the jobless claims numbers (which were not on the list to be released).  Here's how everything shook out:  Durable Goods orders ex-transportation were -.9 vs. expected of .5 and previous of .2 but the overall durable goods orders number came in at .4% vs. expectations of -.6% .  Chicago Purchasing Manager's Index came in below expectations at 60.8 vs. expected of 63 and previous of 66.2 (anything over 50 shows growth).  The Michigan Consumer Sentiment reading came in at 88.8 (highest final reading in 7 years) but below expectations of 90 and above the previous reading of 86.9.  Weekly jobless claims came in at 313K vs. expectations of 288K - this is a big miss and is the first time over the 300k level in about 10 weeks.

Personal spending came in at .2% vs. .4% and New Home Sales (MOM) came in at .7 vs. expectations of .4.  New Home Sales came in at 458 vs. 470 expected and previous of 455.  Pending home sales (MOM) were down 1.1 vs. expectations of increasing .5.  And that is all of this morning's data.  Here's a look at the chart:

With all of that data and not a lot of tradas (I went for the lame rhyme), the benchmark FNMA bond is currently up 12 basis points and is slightly above the new 2nd level of resistance of 104.00 at 104.06.  The RSI is still overbought but the bias may be changing a bit since it's a little lower than yesterday.  It's a great time to lock.  Additionally, you could float if you have the time but always keep a sharp eye on the market and hope that your loan officer watches it closely as well - or you can use me as your loan officer because I watch the market closely as well as doing lots of other things.  At any rate (pun intended) have a happy and safe Thanksgiving.  If you need an approval or have any questions regarding mortgages, I will have my laptop with me and can help out as needed - 702-812-1214.

Tuesday, November 25, 2014

Mortgage Bond Market Analysis - Can't wait for Thanksgiving edition

Happy Tuesday morning.  We have a mixed bag of data.  The FNMA benchmark bond is currently down 5 basis points (probably a little profit-taking) on a number of data points.  The first to hit was GDP which came in at 3.9 vs. expectations of 3.3 and previous of 3.5.  This news which shows a decent economy (in spite of a week job market) was then offset by the consumer confidence numbers which came in FAR below expectations (96) at 88.7 (it was also below the previous of 94.1).  Additionally, the Richmond Fed Manufacturing Index came in at 4 vs. estimates of 16.5 and a previous of 20 - this is a HUGE miss.  The Case-Schiller Home Price index came in at 4.9 which was a bit above expectations of 4.6 and below the previous month's reading of 5.6.

The Relative Strength Index (RSI) is overbought so there is a signal for investors to sell in the face of some mixed data.  Here's the chart:

There's another cornucopia of data coming out tomorrow with durable goods orders, Chicago Purchasing Manager's Index, University of Michigan's Consumer Sentiment Index, Pending Home Sales and New Home Sales.  They can all have an influence on the bond market but the jobs data points are still by far the most influential and since Thursday is a holiday, we won't get our biggest report of the week:  initial and continuing jobless claims.  Next week will provide us with not only the regular Thursday jobless claims reports but since it will have the 1st Friday of the month, we will also get the employment report - these reports will be skewed with some holiday employment numbers figured in so it will make it more difficult for traders to decipher the true information.

Feel free to contact me if I can help with anything mortgage-related - 702-812-1214 - but for now you're probably o.k. to float if your loan isn't closing for a few weeks; if you are closing within 15 days, I'd take advantage of these great rates.  As always, make sure you keep your finger on the pulse because the market can move against you quickly so it's important to work with a loan officer who can react quickly.  Make it a great day.

Monday, November 24, 2014

Mortgage Bond Market Analysis - Monday morning holiday week edition

Good morning and HAPPY Monday.  Holiday weeks like Thanksgiving usually have light trading in both the stock and bond markets as traders often take advantage of the built-in holidays to take a vacation.  With no economic news and a rather narrow trading range - probably because of light volume as well as no data - the FNMA benchmark bond is up 2 basis points as I write this.

The Relative Strength Index is approaching overbought which means investors my start thinking about selling.  If you've read my blog before, you know that selling mortgage (or any) bond pushes the price down and rates up since price and yield / rate move inversely.  There is a fair amount of data on docket for tomorrow with GDP, Case-Schiller, Richmond Fed Manufacturing Index and Consumer Confidence.  I expect that investors, at least those that are working today, are waiting for some direction from tomorrow's (and Wednesday's) data.  Here's today's chart:

Well a quick check on the benchmark bond before I sign off for the day revealed some improvement as it is now up 11 basis points.

What are you doing for Thanksgiving?  Are you traveling or staying home?  Do you have some fun traditions?  Please share in the comments section.  I'm heading to my sister-in-laws to be with lots of family.  Can't wait to see my nieces and nephews and relax with the fam playing games and EATING.  Be safe and feel free to contact me if I can help with anything mortgage-related - I'll have my laptop.  702-812-1214.  Happy Thanksgiving.

Friday, November 21, 2014

Mortgage Bond Market Analysis - Friday with no economic news edition

TGIF.  Do you have some good plans for the weekend?  My alma mater (the University of Utah) has a basketball game tonight and a football game tomorrow so I'll be enjoying those games in addition to watching my son play in his 8th grade AAU games tomorrow night.

The benchmark bond is having some follow-through from yesterday's solid close; it's currently up 8 basis points (3 basis points off of its high for the day).  There is no economic news today so investors are playing a guessing game about where the economy is headed from here.  From a technical standpoint, the benchmark bond is not overbought but it is trying to break through the 2nd resistance level and I doubt it will do that with any impunity today since there's nothing to drive it - barring some big geopolitical event.  Here's the chart:

There is no data released on Monday but Tuesday and Wednesday both have a full plate (reference to Thanksgiving).  We won't get the jobless claims number on Thursday because of the holiday and then only the Chicago Purchasing Manager's Index is released on Friday - which will be a light trading day (along with Wednesday) anyway.  Light trading days are usually more volatile (almost always more volatile).  The big news to watch out for after the Thanksgiving week is going to be the results of Black Friday.  If the consumers are out in droves spending lots of money for the Christmas season then the benchmark bond (as well as other bonds) will likely sell off (especially if the economic data is good) thinking that this is one more sign of a recovery.

It's time for my ride.  Please like, comment and share and feel free to contact me if I can help with anything mortgage-related - 702-812-1214.  Make it a great weekend.

Thursday, November 20, 2014

Mortgage Bond Market Analysis - week before Thanksgiving edition

Happy Thursday to you.  Data came out today like stuffing out of a turkey (yeah, I love Thanksgiving and can't wait for the dinner).  Existing home sales came in at 5.26m vs. estimates of 5.16 which is bad for the benchmark bond (and rates).  Leading Economic Indicators came in at .9% vs. estimates of .6% and the biggie was the Philly Fed business outlook was 40.8 vs. estimates of 18.3 - all bad for the benchmark bond.

On the flip side, initial jobless claims came in at 291k vs. estimates of 285k.  While the job market isn't where it needs to be, as long as claims are under 300k, that is basically good.  That said, it is weaker than expected and there is still trouble in Europe so that is helping our cause today.  The benchmark bond is currently 14 basis points off its high but is still up 16 basis points from yesterday's close at 103.47 - 1 basis point above the 1st level of resistance.  Here's the chart:

There is no economic data on docket for tomorrow and next week will be a light trading week with the holiday which means that any news, good or bad, will likely be amplified.  It's a great day to lock but there's nothing wrong with floating just as long as you can keep your finger on the pulse and be ready to lock just in case something big happens and the market moves against you.  Please feel free to share your thoughts in the comments section.  Make it a great day.

Wednesday, November 19, 2014

Mortgage Bond Market Analysis - hooray for building permits edition

Happy humpday morning to you!!  After today, we'll be on the down side to the weekend so that's our consolation prize to a crappy morning for the bond market.  The housing starts numbers were good for the bond market, relatively speaking, since they were a miss with the actual at 1009 vs. expectations of 1025 and previous of 1038.  What's punching us in the gut this morning is the building permit number which came in at 1080 vs. expectations of 1040 and previous of 1031.  The future is looking up - as far as building is concerned and that's good for our industry since it means people are buying homes (resale as well) but when the economy improves, rates go up.

As I write this, the benchmark bond has improved a little bit vs. what you'll see on the chart; it is currently only down 15 basis points which means it is up 16 basis points off the low and is now 9 basis points above the first level of support.  Here's the chart:

Finally, here is an article from the DS News about where Freddie Mac's economists see housing and interest rates heading in 2015 based on their estimations for the broader economy:  Analysts predict continued improvement for housing.

Please feel free to share your thoughts as well as share the article with your friends and associates.  I'm available to help with anything mortgage related - 702-812-1214.  Make today great.

Tuesday, November 18, 2014

Mortgage Bond Market Analysis - pedaling against the wind

Their was good news on the economic front this morning yet the benchmark bond is up 13 basis points as of this writing in spite of it.  PPI MOM was up .2 vs. expectations of -.1 and ex-food and energy it was up .4 vs. .1.  Normally when important data far exceeds expectations, you would expect the benchmark bond to sell off driving rates higher but the bond market showed its resiliency this morning by shrugging off that data and inching higher.  At 103.52 it's 6 basis points above the 1st level of resistance.

Tomorrow's data brings us building permits and housing starts followed by the initial and continuing jobless claims on Thursday - all of these data points can influence bond prices but the jobless claims have the biggest potential to move the market.  With the start of the holiday shopping season nearing (or even started for some of you), seasonal hiring has begun so the employment and jobless claims numbers will be skewed for the next couple of months. Here's today's chart:

Please feel free to comment, like and share and to contact me if I can help with anything mortgage related:  702-812-1214.  I'm licensed in Nevada, Utah and California.

Friday, November 14, 2014

Mortgage Bond Market Analysis - TGIF edition

Good morning and happy Friday.  The benchmark bond has shrugged off the early morning propensity to sell which was driven by better-than-expected economic data.  Investors are pushing bond prices higher, albeit slightly.  It is currently up 6 basis points and is hovering above both the 1st level of resistance as well as the 10 day moving average.  Closing above these levels might indicate a possibility of some follow through on Monday; of course we had a nice Friday last week and did an about face on Monday so sometimes momentum works and sometimes it doesn't.  Here's the chart:

It's a good time to lock if you have a loan closing soon but if you have some time, I wouldn't be afraid to float heading into Monday.  If you do float, make sure you stay on top of the market so that you can lock quickly if it turns against you.

Please feel free to share your thoughts in the comments section and share this with your friends as well as like and subscribe.  Make it a great weekend.

Thursday, November 13, 2014

Mortgage Bond Market Analysis - and other related news

So what the heck is going on in the mortgage bond market this morning?  To start with, the initial jobless claims came in 10K higher than expected at 290K.  While this is positive for the benchmark bond, it's not that big of a miss and the overall claims are still good as far as the economy is concerned - anything below 300K is good.  The fact that New York Fed President Dudley spoke this morning and expressed his thoughts that the Fed should wait to raise rates is probably the biggest impetus as to why we are experiencing some buying of the benchmark bond which is good for rates.

From a technical standpoint, the benchmark bond is really looking for direction.  The economic date from Europe is horrible and investors aren't really confident in a recovery (especially as far as jobs is concerned) over here but the stock market continues to set record highs nearly every day as of late so there is confusion on whether to buy or sell.  Yesterday the bond buying started off strong but the sellers won the day with the benchmark bond closing down 10 basis points.  This morning we saw a moderate open which then sold off and is now flirting with the 1st level of resistance again.  Rates continue to be great and it's always a good time to lock when bond prices are up.  Here's the chart:

Is the 3% down payment conventional loan coming back?  While nothing has been announced, there was an article in talking about how the U.S. Mortgage Insurance trade association believes that the 97% LTV conventional loan is a good loan and should be available to the home-buying public.  They give four reasons as to why they believe this - they left out the obvious 5th reason - more profits for them.  Here's the article:  Low down payment home loans.

I'd love for you to share your thoughts on any of these items.  Please like and share my post as well.  If you know someone who is self-employed and making good money but doesn't show it on the tax returns, we may have a solution with our bank-statement program.  Feel free to contact me for anything mortgage related:  70-812-1214.

Wednesday, November 12, 2014

Mortgage Bond Market Analysis

It's another quiet day for economic data and we are seeing a bit of a rebound from Monday's 31 basis point beating - a day with NO data.  Today we have wholesale inventories which came in at .3 vs. expectations of .2 and previous of .6.  This has little to no effect on the mortgage bond market.  The benchmark bond (the FNMA 3.5) is currently up 7 basis points which is 22 basis points off it's high for the day.  On the government side, the GNMA 3.5 is up 40 basis points which is 11 basis points off its high for the day.

Like I always say, rates are great.  Tomorrow we will get the jobless claims numbers (initial and continuing) and I'm guessing that these numbers will come in relatively strong since those who may have otherwise had to file unemployment claims will have found seasonal employment.  Going forward, all employment numbers will be skewed because of the temporary seasonal employment so it will be hard to get an accurate read on how the labor market is actually doing until early 2015.  That said, employment data could still move the market so you may want to lock ahead of the release (5:30 a.m. PST tomorrow morning) if you want to be safe.  Here is the chart:

An article from talks about some demographics of people purchasing homes and the interesting part addresses the millennials (18-33) who are showing reluctance to get into the housing market.  It's a good read and may be something to think about with regard to some marketing ideas:  Millennials Still Grapple With First-time Homebuying.

Please feel free to share your thoughts in the comments section as well as to like and share the post.  Contact me if I can help with anything mortgage-related:  702-812-1214.  Make it a great day.

Friday, November 7, 2014

Mortgage Bond Market Analysis - Friday edition

Non-farm payrolls disappointed which is REALLY good for the benchmark bond.   They came in a a relatively wimpy 214K vs. estimates of 231K and previous of 256K.  This shows that the economic recovery continues to be very lethargic.  This is the first big move for the benchmark bond since October 15th.  It is also no longer oversold.  Where we go from here (even just for the day) is anybody's guess.  Is there enough momentum to push it to an even higher close or do investors sell off such that it closes up marginally?  How it closes could give us some insight to what may happen next week.

For those who rolled the dice on this one and waited to lock until after the data came out, you got a reward.  For those who locked prior to the data, you still got a great rate and you may be able to float down at some point depending on your lenders float down policy.  Of course, you can always call me and see what kind of rate I can get you - 702-812-1214.  Here's today's chart:

By the time I copied the chart there was a 6 basis point sell-off - no big deal unless it's the start of a bigger sell-off.  At the current price of 103.59 it is only 21 basis points below the October 15th close.  Today would be a great day to lock if you have a loan closing soon but if you have some time, you might want to float into next week and see if we get some follow-through.  If you decide to float, make sure you are judicious about checking on rates so that you don't get hit with a big down day that erases all of the gains - sometimes that can't be anticipated but sometimes if you catch it in time, you can lock before a your lender has a price change.  The key is for your loan officer to have access to the mortgage bond market so that he gets alerts as to price swings.

I'll be up in Utah through Tuesday so I may not be able to post anything on Monday and Tuesday.  Please feel free to share your thoughts in the comment section.  Please like, share and subscribe.  Make it a great day and a better weekend.  Utah is playing Oregon in college football tomorrow night - I hope the Utes will give them a respectable game and MAYBE pull of a big upset.

Wednesday, November 5, 2014

Mortgage Bond Market Analysis

ADP Private Payrolls came in at 230K vs. expectations of 220K.  This is causing investors to sell which is pushing rates slightly higher.  The support and resistance levels have been adjusted downward through this slow downturn and the benchmark bond is still oversold although it looks like the bias might be changing.  If this happens and investors believe it then there could be some serious selling.

Thursday and Friday should give us more insight as to the employment portion of the recovery - if jobless claims are down tomorrow and non-farm payrolls are up on Friday, expect a couple more days of selling.  Any big surprises could move the market in a big way.  Depending on your tolerance for risk, you may want to lock your rate today in advance of the data releases tomorrow and Friday. Here's today's chart:

It's important to remember that even though we've had a steady decline over the last 15 trading days, bond prices are still strong which means rates are still really great even from a short term perspective.  Of course if you look at it from a historical perspective, rates are incredibly low.  If it would me, I wouldn't be greedy and I 'd lock today but the decision is always up to you.

Please feel free to share your thoughts on the subject.  Please like, subscribe and share.  Make today great.

Tuesday, November 4, 2014

Mortgage Bond Market Analysis - Election Day Edition

It's election day and that means one thing - another edition of my mortgage bond market analysis.  As I write this, the benchmark bond is up 5 basis points after closing down 12 basis points yesterday.  It has retreated 51 basis points since the close on October 15th - again this has been a very slow decline and the benchmark bond is oversold.

Tomorrow we will start to see the tip of the iceberg with the typically inaccurate ADP private payrolls.  We follow that up with the jobless claims numbers on Thursday and then the monthly non-farm payroll / employment report.  This report may be the beginning of including some seasonal workers so it may not be as accurate as we would like.  If numbers come in higher than 231 there could be some sell-off pushing rates higher.  If the numbers really surprise and are higher than last months 248, the sell-off could be substantial - at least relatively speaking.  With the small movements that we've had, I think the bond market is looking for some direction; it's hard to believe that it's oversold (even though it technically is) having only gone down 51 basis points over the last 14 trading sessions (including today) which is just 4 basis points per day.  Here's the chart:

I would contemplate locking before the end of today if you are ultraconservative and are afraid of what might happen to rates depending on what happens in the elections.  If you are moderately conservative, I'd at least lock before Thursday's jobless claims numbers.  If you are neutral then you may want to lock by Thursday's close to be ahead of Friday's employment numbers which come out early.  If you like to live on the edge, lock after the employment numbers are released.  I wish I had a crystal ball but that's as good as it gets - remember that the market is oversold so there could be a desire for investors to buy.  That said, there could be nothing but good news economically which would be bad for rates.  It's always your call.

Please feel free to share your thoughts in the comments section below.  Please like, share and subscribe and make it a great day.

Monday, November 3, 2014

Mortgage Bond Market Analysis - Happy November Edition

The mortgage bond market is off to a rocky start this month with the benchmark bond currently down 14 basis points on the day at 103.22 and 58 basis points over the last 13 trading days.  The benchmark bond is oversold and could get a lift from investors who may start to believe that this is a good buying opportunity - I'm not confident that will happen since I believe it is oversold more because of the prolonged decline not because of how much it has declined.  Considering how big the run-up was, I think we could break through some support levels especially if the economic data and geopolitical climate become more positive.

Here's a look at the chart today:

There's a fair amount of economic news / data releases on the calendar this week with some of the highlights being the ADP private payroll report on Wednesday, the jobless claims on Thursday and the employment report on Friday - this is the biggie.  If Friday's report has a number over the expected 231K then we could see some sell-off in the bond market with rates moving higher.  Additionally, jobless claims numbers have been on the decline and some good numbers (for the economy, not rates) on Thursday could also provide impetus for a sell-off of the benchmark bond.

Rates are great and there is reason to float but I would only float in the very near term - I'm not a gambling man so I would most likely lock my loan (if I were in the process of doing one) before Thursday's jobless claims numbers and certainly before Friday's non-farm payroll report.  Please feel free to call me if I can help with anything mortgage related.  I'd also love to have you share your thoughts in the comments section.  Please like and subscribe as well.  Make it a great November.

Friday, October 31, 2014

Mortgage Bond Market Analysis - Halloween Edition

Happy Halloween.  The benchmark bond got a scare this morning when the Chicago PMI came in at 66.2 vs. estimates of 60.  This is a strong reading and the knee-jerk reaction was to recommend locking.  Personal consumption expenditures came in just below expectations at 1.4 vs. 1.5.  Rates are great right now but it's a bit frightful trying to guess where they might go from here with a recent slide (albeit greater in time than in price magnitude) pushing the RSI to oversold, it would be tempting to think we might get a rebound such that we should float.  Behind the mask, though, we might find that bond prices have further to fall in the near-term, pushing rates higher.  As low as we are right now and with an economic recovery hopeful sometime in my lifetime (I'm not even 50), I would think that rates are bound to go up over the next year or so unless the Fed decides to put another quantitative easing costume on the bond market again which I don't think will happen.

Next week will be very telling because we get the employment report on Friday - jobs numbers over 200K will show that we are starting to get some legs to this ghostly recovery.  The employment reports in December and January will be skewed by the seasonal hiring so it will be hard to know exactly what the economy is doing based on those numbers.  The retail sales will be interesting to follow this holiday season because the consumer confidence numbers have been very high recently which should translate into a strong holiday season for retailers.  Here is today's bond chart:

My month on the bike:  October was my best month on my bicycle since September of 2012 when I road 719 miles.  I road 655.41 miles this month in 21 days on the bike - 31.21 miles per day.  I averaged 18.6 miles per hour and climbed over 33,600 feet.  My goal is to put another 600 miles on the bike in November but as the temperatures drop along with being out of town for about 10 days, it's going to be a challenge.  How was your October and what are your goals for November?

Please feel free to contact me if I can help with anything mortgage related.  Have a happy and safe Halloween.  Please like, comment, share and subscribe.

Thursday, October 30, 2014

Mortgage Bond Market Analysis - Halloween Eve

The mortgage bond market has been frightfully calm over the last week and a half and the volatility is nothing more than a ghost of weeks past; it could be lurking just around the corner ready to put some fear into us should the economy show more significant signs of improvement.  Since October 15th when the benchmark FNMA 3.5 closed at 103.8, we are down to 103.45 two weeks later and trading in a very narrow range.  October 15th and a couple of days after that provided us with some MASSIVE volatility which resulted in some wild price swings but since then the market has been eerily calm.

The geopolitical landscape has calmed down along with economic news that hasn't been earth-shattering in either direction.  I think that the bond market is tip-toeing through the alley hoping not to stir up any ghosts or goblins - of course, some would say the same of the economic recover which is a main reason why we are where we are as far as interest rates are concerned.  Here is the current bond chart:

The slide in the stock market played a part in the run-up for the benchmark bond through the 15th and then a minor recovery in the stock market in addition to some stabilization in the geopolitical climate (including some calming of the nerves regarding Ebola) has factored in to the recent decline of the benchmark bond.

Please feel free to comment, like, share and subscribe.  I always like to get input from readers.  Have a great day and contact me if I can help you with anything mortgage related.  Until tomorrow - make it a great day.

Monday, October 20, 2014

Mortgage Bond Market Analysis - Happy Monday

Happy Monday.  I hope you had a great weekend.  I did.  I took my son to Garden Grove, California for an AAU basketball tournament and his 8th grade team won their division.  I love to share experiences like that with him.

On the mortgage bond front, there is no data this morning and still a bit of a positive bias until the benchmark bond hits the resistance level and then it tops out.  It has been toying with the 103.80 resistance level for 4 days in a row now and hasn't managed to close above that level.  If it can close above the 1st resistance level, there's room for more improvement.  That said, there's also plenty of room for prices to fall consider the support level is at 103.36 and the benchmark bond has been over bought since September 25th.  Here's the chart:

I'll be up in Salt Lake City on Business through Wednesday evening so I doubt I'll be able to post anything  until Thursday.  Please feel free to contact me at 702-812-1214 for any information you may need on the direction of interest rates or mortgage programs.

Please like, comment, share and subscribe and make it a great week.

Friday, October 17, 2014

Mortgage Bond Market Analysis - the All Quiet on the Western Front edition

The Benchmark bond is taking a breather after two days of high volatility.  The economic data has been a mixed bag over the last two days with no definitive information about where the economy is headed from here.  This morning, the data was mostly positive if not super strong with housing starts (beat expectations and previous month) and building permits (came in slightly below expectations but above last month) both coming in above the 1000 level and the Michigan Consumer Confidence reading was also up a couple of points vs. expectations and 1.8 points vs. last month.

RESISTANCE:  good for weight training, not good for the benchmark bond.  The first level of resistance at 103.8 has proven to be very strong with the benchmark closing below it on Wednesday after being well above it (121 basis points higher, in fact) and then closed below it again yesterday after another strong start that pushed the price above the 2nd level of resistance for the 2nd day in a row.  The more times it tries to break it and can't, the stronger that resistance level gets.  The bond got to within 5 basis points of the 1st level of resistance this morning and has since sold of a bit to where it is currently down 15 basis points.  Here's the chart:

I expect that we will see a relative quiet day compared to the last two where we got lots of improvement and worsening alerts in addition to trend reversal notifications.  There isn't a ton of data on tap for next week but I think bond traders will be looking for any direction they can latch on to including getting some influence from the current geopolitical climate and the global economy.  A quick look at the bond market as it stands right now shows a bit more selling with the benchmark bond now down 19 basis points.

Riding time:  It's time for a ride and then I'm off to California for a quick trip tomorrow for my son's basketball tournament.  What are you doing for exercise and / or fun this weekend?  Enjoy and be safe and please feel free to comment, share and subscribe.

Thursday, October 16, 2014

Mortgage Bond Market Analysis - The What the Heck Just Happened edition

HOLY COW!!  It has been a crazy ride over the past couple of days.  Yesterday started up about 84 basis points and then shot up even further to up 154 for a high then down to where it was only up about 22 basis points and ending the day up 33.  All in all rates went down about .375% and then back up about .25% and the initial up and down swing happened in about an hour so actual rates were never published with what they could have been.  There were about 9 or 10 various rate alerts and trend reversals due to tame inflationary news on one hand coupled with other week economic data and unsettling statements from Putin served as the catalyst for the big move up in bond prices.  By the end of the day the stock market had recovered much of its losses and the money had flowed out of the bond market as a result with the price of the benchmark bond closing 121 basis points off of it's high for the day.

More craziness this morning:  This morning the benchmark bond was up as high as 67 basis points with the thought that maybe the sell-off in the latter part of yesterday was an over-reaction and probably some betting that the initial jobless claims report would be week.  The report came in surprisingly strong and other economic news this morning surprised to the upside, for the most part, and the benchmark bond has sold off since.  It is currently of its lows of being down 21 basis points as it is currently down 4 as of this writing.  Here is a look at the chart from a few minutes ago:

Lots of volatility yesterday and today and with the geopolitical news adding to the instability, it's anyone's guess as to what will happen next.  We've seen a mixed bag of economic data over the last couple of days but the volatility will likely decrease from the craziness we saw yesterday and early this morning.  Rates are still amazing and much lower than any bond market expert would have anticipated at the beginning of the year.  It's a great time to lock in a low rate.  Please like, comment and share - I'd love to hear your thoughts on what's going to happen with rates.

Tuesday, October 14, 2014

Mortgage Bond Market Analysis - Sorry for the week off version

It's Tuesday morning and the mortgage bond market is starting the shortened week (it was closed yesterday for Columbus Day) off strong thanks to another big down day in the stock market yesterday.  The yield on the 10-year treasury is well below where the experts thought it would be at this time of year considering the Fed is nearly complete with the tapering of the quantitative easing program and the though of an improved economy.  The fact that the economy hasn't improved nearly as much as most hoped for and that the global economy, especially in Europe, is very week is driving these low rates.  Also helping the benchmark bond is the fact that there's a lot of other global issues with ISIS and Hamas, the issues with Russia, the Ebola virus as well as other things.  Here's the chart:

As you can see in the chart, the benchmark bond has bumped off of both resistance levels this morning and is 12 basis points of its high for the day.  The Relative Strength Index is overbought (and has been since September 25th) so it's hard to think that there is much left, if any, in this great run.  The current price is well above all of the moving averages as well so I would look for some profit taking if nothing else in the near future.

This week's economic data:  Tomorrow we get the PPI (ex-food and energy) and on Thursday we get initial and continuing jobless claims along with capacity utilization, industrial production, Phillie Fed Manufacturing survey, and NAHB Housing Market index.  On Friday we get housing starts, building permits, University of Michigan Consumer Sentiment index and a speech from Janet Yellin.  The data most likely to impact rates one way or the other is the numbers for jobless claims.  I always say "don't be greedy."  We've had some great improvement in the bond market over the last 3 weeks - if you have a loan closing in the near future, I would consider locking - especially before Thursday's data release.

Inspiration:  I had an idea to add this section - don't know if I'll do it every time but I wanted to add a little more to these posts.  I love sports and my main activity to get and stay fit is bike riding.  I also love music - I write and produce in my home studio and I love watching YouTube videos of young musicians.  So the nature of this section will be to either share my accomplishments in the hope of inspiring you or to share something from YouTube or other similar source to provide inspiration which hopefully carries over into your work performance.  For some background I haven't ridden nearly as much over the past two years as I did the previous three.  Last year I rode a total of 1,940 miles - this year I'm just over 2,500 miles so I'm well ahead of last year.  Last month was my biggest month in two years with 540 miles and I'm trying to beat that this month (I missed 4 days at the beginning of the month on a hunting trip and will miss 5 more on a business trip).  I have ridden 335 miles so far and hope to be at 432 after Friday's ride.  I set a personal best time for my 35.58 mile route yesterday with an average speed of 18.8 mph - beating my old time by 1:20 and I followed that up with my 3rd best time this morning on my 25.97 mile route with an average speed of 19.1 mph.  Time to get busy building relationships and helping people finance their homes.  What are your goals and achievements in exercise, music or the business world - or anything else for that matter?  Make it a great week and feel free to call me if I can help with anything mortgage related:  702-812-1214.

Wednesday, October 1, 2014

Mortgage Bond Market Analysis - Hump Day Version

It's hump day and it's also the day before the jobless claims numbers are released and two days before the employment report - both of which could influence interest rates.  The ADP private payroll numbers came in a bit better than expected at 213 vs. 210 expected and 202 previous, but most people know to take this number with a grain of salt.  Construction spending was down -.8 vs. expected of +.4 and previous of 1.2.  ISM Manufacturing index also came in below expectations at 56.6 vs. 58 expected and 59 previous.  What does all of this mean?  It's PARTY TIME - the benchmark bond is currently up 42 basis points and we are at our highest level in over three weeks.  Rates are looking really good right now and I highly recommend locking and taking advantage of this move since the jobless claims and employment report could easily take it all away.  Of course, they could also surprise to the downside and impact rates positively.  No one has that crystal ball but we do know that we have seen significant improvement in the mortgage bond market over the last couple of weeks and now is a great time to lock.  Here's the chart:

In addition to the upcoming economic data releases tomorrow and Friday, there is also the fact that the benchmark bond is overbought which means investors could start to sell and take some profits and there is some pretty strong resistance at the current price point.

I won't have access to a computer tomorrow or Friday - I'll be out in the woods camping with a friend of mine.  I'm excited to see what happens with the data the next two days.  Lock now or roll the dice?  That's the question.  Please like, comment, share and subscribe.  Make today great.

Tuesday, September 30, 2014

Mortgage Bond Market Analysis

Happy Tuesday - the benchmark bond started the day down more than it was up yesterday but that trend reversed when the three pieces of data that were released all came in worse than expected:  1) Case-Schiller Home Price Index came in at 6.7 vs. expectations of 7.5 and previous of 8.1, 2) Chicago Purchasing Manager's Index came in at 60.5 vs. expectations of 61.9 and previous of 64.3, and 3) Consumer Confidence came in at 86 vs. expectations of 92.5 and previous of 92.4.  None of these will move the benchmark bond a whole lot but they did help to get it off the lows.  As I write this it is currently down 7 basis points for the day.  Here is the chart (the bond moved down a bit after I took this picture):

My thoughts on where we are headed from here:  The benchmark bond is testing some fairly strong resistance levels after a nice run-up over the last several days.  Additionally, the market is overbought so there is a good chance we could see some sell-off.  Barring some really dour reports on jobless claims on Thursday and the employment report on Friday, look for the benchmark bond to sell off and rates to move hire.  I recommend locking before the close of business on Wednesday - you could get a pleasant surprise on Thursday or Friday but I wouldn't count on it.

Personal note:  I will be out of town on Thursday and Friday with no access to the internet so there will be no report on the jobless claims or employment data until next week.

Tuesday, September 23, 2014

Mortgage Bond Market Analysis

Not much happening in the mortgage bond market this morning with little news on the economic front - the Richmond Fed Manufacturing Index came in at 14 vs. expectations of 12, this isn't a market mover.  We are seeing a bit of follow through from yesterday; the benchmark bond was up 17 on the day at its highest so far and is currently up 9 basis points.  The key thing to watch is where the benchmark bond closes; it is currently 3 basis points above the 1st level of resistance and if it closes above this resistance level, it could be a sign that investors might have confidence to push it even higher with rates moving lower as a result.  Here is the current chart:

Economic News on the docket:  Tomorrow we have new home sales numbers which typically isn't a rate mover but a solid number could have a negative impact.  Thursday we will get the initial and continuing jobless claims and these are the most closely watched numbers of the week (except for the first Friday of the month which brings the employment report) and could impact rates one way or another if there is a surprise.  Also on Thursday are the Durable Goods Orders which gives us a look into what consumers are doing relative to buying big ticket items.  We finish off the week with GDP and Michigan's Consumer Sentiment Index.

Please feel free to share your thoughts as well as like and share this post.  Please also subscribe so that you will get updates as I post them. I am licensed to provide mortgages in California, Nevada and Utah so feel free to contact me if I can help you with a mortgage.  Make today GREAT!!

Monday, September 22, 2014

Mortgage Bond Market Analysis - Happy Monday

After a decent day for the benchmark mortgage bond on Friday, we are seeing a little follow-thru.  Bonds are improving marginally on some weakness in stocks (sometimes they trade together, sometimes they don’t). The real reason is some snippets from the Chinese government that they will provide little stimulus. That has stocks under pressure in Asia, Europe and here and coupled with this morning’s existing home sales which were a miss at 5.05m units on expectation of 5.20mm units has mortgage bonds +16bps and outperforming treasuries which are currently yielding 2.56%. The bigger picture is that small bounce we’ve had (we are still down 60bps for the month of September)  has the indicators showing bonds are relatively in balance (not oversold much anymore). Rates could certainly improve from here (especially if we get more negative news from Europe) but for the moment, it looks like this is the sandbox we are playing in.  Here's the graph for this morning:

While the benchmark bond is not technically oversold anymore, it is still very close to that line so there is some decent potential for more improvement to rates but I would be very cautious in floating and be ready to lock with any kind of good economic news - especially if it's significant.  

Please like, comment (I always love to get readers' thoughts) and share and feel free to call me if I can help with a mortgage - 702-812-1214.

Friday, September 19, 2014

Mortgage Bond Market Analysis - TGIF version

It's Friday and TGIF.  We're one day away from another great weekend of college football and my Utes are taking on the Michigan Wolverines in The Big House and I'm hoping we come out with a win.  Oh wait, this would be a post for another blog.  I guess I should talk about the mortgage bond market here.

Well after we finally had a day where we closed up, we started the morning with some follow-thru and were up about 15 basis points when investors apparently decided that since it's Friday, perhaps they should sell and take some profits so that they could have some pocket money for the weekend.  Even after the leading economic indicators came in at .2 vs. expected of .4, the benchmark bond remained underwater.  Never fear, it's nothing a little Honey Nut Cheerios can't cure - after I was done having my nutritious breakfast, I saw that the bond had reversed it's trend and was up 10 basis points.  Here's the current chart:

The benchmark bond is currently 2 basis points below its high for the day and 9 basis points below the 1st level of resistance - it's up 14 basis points as I write this.  If it could close above this, it could be a buy signal to investors.  Providing additional ammunition to buy mortgage bonds is the fact that according to the RSI, it is still oversold.  We've seen a mixed bag of economic data over the past week so that doesn't help provide investors with any sense of direction.  For now, you may want to take advantage of the small gains from yesterday and today and lock your loans and just enjoy a great weekend.  Of course, you may be the type that wants to wait and see if we get any more gains on Monday.  So which is it?  Please feel free to share your thoughts in the comments section and like and share this with your friends.  I'm happy to help with any questions regarding mortgages.  Make it a great weekend.

Thursday, September 18, 2014

Mortgage Bond Market Analysis

Will today be a reversal of fortunes?  Both Tuesday and Wednesday saw the Benchmark bond get off to a promising start with early morning price increases in the 20+ basis point range only to see investors sell off throughout the day to end down.  This morning on some stronger-than-expected initial and continuing jobless claims, the benchmark bond is starting the day down - it is currently down 12 basis points.  Here is the chart:

The silver lining in this rain cloud of a two-week down-trend is that the bias has yet to change - in other words, the RSI is still showing as oversold.  If analysts think that the fundamentals of the market have changed and that rates will necessarily move higher and stay there, then the bias would change and we wouldn't be oversold.  This means there is a possibility of a bounce - not a guarantee, but a possibility.  The put the recent movement in perspective, the bond price as declined 168 basis points since its high on August 29th, 35 of that was due to the monthly roll-over so there has been a net decline of 133 basis points which translates into an increase in rate of about just under .375% - that's a pretty big jump in just under 3 weeks.  Rates are low, very low, from a historical perspective so I wouldn't feel bad if I locked now, but I would consider locking now because there's no real sign that we will get the benefit of any sustained bond-buying.

Leading Economic Indicators is the only economic data on tap for tomorrow and that isn't typically a big influence on bonds though it is expected to come in a half point lower than last month (.4 vs. .9).  The market is currently only down 7 basis points which is a 5 point improvement from when I started writing this - maybe today is the day for a reversal of fortunes.  Please feel free to comment and like my posts as well as share them with your friends and subscribe.  Make today great.

Wednesday, September 17, 2014

Mortgage Bond Market Analysis

It's humpday morning and the benchmark bond is following in yesterday's shoes, which is to say that it is currently off the morning highs - in this case by 9 basis points, up 10 for the day.  Yesterday it got up as high as 23 basis points and had given it all back by the end of the day closing down 5.  There was really no economic news driving the market yesterday and there isn't much to influence it today with all of the CPI numbers coming in slightly below expectations and having a minimal positive impact on pricing.  The National Association of Home Builders released their housing market index and it came in at 59, 3 points higher than their expected 56.  This is the highest reading since 2005 but doesn't typically have much of an influence on mortgage bond pricing.  Here's a look at today's chart:

With some mixed economic data over the last week and not much going on in the world (other than the Ebola virus break out and the typical middle-eastern stuff with ISIS), the markets are looking for direction.  The Relative Strength Index (RSI) is still oversold so from a technical standpoint, we could see some buying as investors may look at current prices as an opportunity.  However, it's been oversold for a few days and we haven't seen a whole lot of buying yet so they may be waiting to see if tomorrow's jobless claims are higher than expected again.  If they are - especially if they are considerably higher (don't count on it) - then we could see some buying and that would be good for rates.  For now, float with caution.  Be ready to lock if any news comes out that would give the market a reason to sell off.  The 200 day moving average will provide support at 101.45 (20 basis points below the current price) and then there's another support level at 101.31 - if the benchmark bond sells through that, it could get really ugly. Please feel free to share this with your friends and leave your comments.  I'm happy to help with any mortgage-related questions as well - 702-812-1214.

Tuesday, September 16, 2014

Mortgage Bond Market Analysis

It's an uneventful Tuesday as far as economic data and the benchmark bond are concerned.  The bond is up a bit for the 2nd day in a row which is good news but it is 9 basis points off the high for the day and is not having any luck holding the price above the resistance.  The good news is that it's still oversold which means investors might be enticed to buy in the hopes of a nice run up and a quick profit.  With the geopolitical concerns from ISIS and other groups in various regions of the world - including reports of some infiltration through Mexico, one would think that the bonds would get a bit of a bid but for now there's nothing too exciting to report relative to good news on the interest rate front. I would take 6 or 7 more days in a row of the benchmark bond being up 14 basis points a day - hopefully it ends the day up that much or more - but a really strong up day might encourage some follow-through from smaller investors.  Here's a look at the current chart:

The Producer Price Index numbers all came in exactly as expected.  We get the consumer versions tomorrow and then on Thursday we get the weekly initial and continuing jobless claims numbers which typically pull the most weight with rates, one way or the other.  If I needed to lock a loan and had 21+ days until my closing, I'd probably float with caution - it's important to be ready to lock quickly should the market start to turn.  If my loans was closing within 15 days, I would lock now; to keep things in perspective, rates are still VERY low, historically speaking.

Saturday, September 13, 2014

Arbitrage and self-directed retirement accounts could lead to retirement success

As a Certified Mortgage Planner and a former Series 7 licensee, I pay special attention to the asset portion of the mortgage loan application of my clients.  Over my 19 years I've notices that only a very small percentage of people are on track (or even close) for a successful retirement.  Most of my clients have enough for a down payment and a little bit in reserves after the transaction closes and there is a bigger percentage of clients who are buying move-up homes that have enough for 20% down and a fair chunk left over after that but not much in the way of liquid investments such as a 401(k), IRA (traditional or Roth) or any other investment account.

Arbitrage:  If you watch the Granthem Investment video series, you will hear Bryan say that he recommends that you do what the banks do, don't do what the banks tell you to do.  The main way that banks make their money is by arbitrage which is to say that banks borrow money from people who deposit their money in money market and savings accounts as well as CDs.  They pay a paltry fee for this - check the yield on your savings account - then they turn around and loan money out for credit cards, car loans, mortgages and such at much higher interest rates and make huge profits.  If you have money sitting idly in a home in the form of equity, you may be able to access it and get it working for you by investing it in any number of things - I prefer very safe investments if you are going to pull money out of your house (or in the case of purchasing a new home, you can choose to put less money down and keep more money for investing - I have a great example on the Granthem Investment videos).  Money in your home in the form of equity is illiquid and isn't providing you with a return on investment.  Pulling that money out gives you the opportunity to diversify and get more assets to work for you.  In such a case, I recommend investing in private money mortgages or indexed universal life policies.

Diversification is great because it spreads the risk.  However, it's important that you diversify with investments that all have the potential to provide a good return AND you want to account for the likelihood of higher taxes down the road as much as possible.  There's a wide variety of traditional investment accounts such as brokerage accounts for trading stocks, bonds, mutual funds, options and such.  Additionally, there are retirement versions of brokerage accounts such as your company's 401(k) as well as individual retirement accounts (IRAs) including the traditional and the Roth - I prefer the Roth because while there is no tax deduction for the contribution you make now, your investments grow tax free and when you start taking money out, there's also no tax on it.  One thing to note about IRAs is that the earliest you can withdraw money from them without a 10% penalty is when you turn 59.5; you have to begin withdrawals on the April 1st after you turn 70.5 - I recommend leaving the money in to let it grow as long as possible - if you have it invested in something decent (see my video series with Bryan Granthem about a safe investment with a solid return - - this is episode 2), you could double your money or more with that extra 11 years that you leave the money in your IRAs.

Some ideas for diversification:  There is a wide variety of investment choices and it's important to become as knowledgeable as possible on the various choices.  Some of the more traditional investment options include individual stocks, bonds, mutual funds and options - options are tied to stocks and are a more risky investment so it's extra important to do lots of homework about the various options and their strategies.  Real estate is a great option because there are a few good strategies to choose from including fix and flip (it's important to have a great Realtor and contractor) as well as investment properties which can provide monthly income, appreciation and tax benefits.  Traditional retirement accounts allow you to invest in stocks, bonds, mutual funds and options (depending on the type of account) and they have some tax benefits in that the investments grow tax deferred; hence, if you have 100 shares of Apple and sell it for a huge profit after quarterly earnings far exceeded expectations thanks to the iPhone 6+, you don't have to pay capital gains tax on this profit in an IRA (traditional or Roth).  Self-directed IRAs are also a great thing because you can invest in real estate as well as do things like fund private mortgages - see the Granthem Investment series of videos on YouTube.  If you don't know about the Solo 401k, you need to learn about this - it's amazing.  The final investment type I will cover here is live insurance / annuities.  There are some great options that allow you to have access to your money anytime without penalty AND your investments grow tax-deferred and you get to access your money tax free.  The investment vehicle that I use for this is the Universal Indexed Live policy.

Side note on asset protection:  It's very important to protect your assets; even if you don't have much wealth currently, it's important to have a trust.  If you own investment properties, you should have an LLC (in Nevada, you should have a Series LLC).  There's a lot of reasons why you should have a trust and possibly an LLC and strategies on how to use them but that is for another post - I work with some great estate planning attorneys and I'm happy to make a recommendation.

I can recommend any of the professionals that I have talked about above - I have worked with a great contract who I would highly recommend as well as a number of great Realtors.  I also have a great life insurance agent who can help with those types of investments and Bryan Granthem can help you set up self-directed retirement accounts and help you with private mortgage investments.  The key is to take action and get started and I'm happy to review your personal situation and discuss your options and pair you with the right professionals.  Here's episode 1 of the Granthem Investment Series:

I would also recommend that you watch episode three of How to Avoid the Most Common and Costly Mortgage Mistakes:
Please feel free to leave comments and questions and share this with your friends.  Don't forget to subscribe to my blog and my YouTube channel so that you will get notified when new posts and videos are up.