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Friday, January 22, 2016

Mortgage Bond Market Analysis - It's all about that oil

TGIF.  Oil is back above $30 per barrel and that is pressuring mortgage bonds.  Let me start by saying that on days when I don't write a blog post about the mortgage bond market and interest rates, you can always call me (702-812-1214 or 801-853-8720) or email me ( to see what the market is doing and get my thoughts on locking or floating.

The FNMA benchmark bond closed down 8 basis points - not too big of a deal - but there is follow-through this morning thanks to rising oil prices.  The bond is down 16 basis points so I am going to recommend locking to protect you / your clients to the down side.  The RSI is no longer overbought so we don't have that pressure from this technical indicator.  At a current price of 103.94, the bond is 12 basis points above the 1st support level.

As far as data is concerned, it was mixed with Existing Home Sales coming in strong at 5.46mil vs. expectations of 5.18mil and previous of 4.76.  On the other hand, Leading Economic Indicators came in at -.2 vs. expectations of -.1 and previous of .5 - big miss here.  Yesterday, Initial Jobless Claims came in at 293K, well above expectations of 280K and last week's reading of 284K and it's knocking on the 300K threshold - not good.  The Philly Fed Manufacturing Survey, while bad at -3.5, was not as bad as expected (-5) or the previous reading (-5.9).

On a happy note, I have a client who was working with another lender for two months before they ended up turning her down.  The listing agent asked her to contact me and two and a half weeks later we are signing loan documents today - this time frame includes getting a new appraisal and a holiday.  The appraisal wasn't the issue but we just wanted to give her the best chance of success so we went with a new appraisal.  Needless to say, the client is ecstatic and so are we.  Our average closing time under TRID is about 3-3.5 weeks.  We'd love to help you or someone you know who needs a mortgage.

Make it a great day and a better weekend.

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