Mortgage Rates Steady, Favor Floating
Posted 11-12-2010 at 08:04 AM by VictorBurek
The bond market was closed yesterday in honor of Veteran’s Day.
We have one economic report on this final day of the week.. Consumer Sentiment. The Reuter’s/University of Michigan’s Consumer Center surveys 500 households on their attitudes on the economy and personal financial status. Market participants track consumer attitudes to gauge future economic momentum. An optimistic consumer is more likely to spend, this benefits stock markets. A pessimistic consumer is more likely to save, which supports low yields in the bond market. Low yields in the bond market allow lenders to keep mortgage rates low.
We receive two readings each month on Consumer Sentiment, a preliminary reading at the beginning of the month and a final reading. Today’s report is the initial look at November. Economists were expecting an uptick in sentiment to 69.0 from last month’s less than expected final print of 67.7. Today’s report indicated Consumer Sentiment rose to 69.3.
Lender rate sheets are slightly worse when compared to Wednesday. The par 30 year conventional rate mortgage remains in the 4.125% to 4.375% range for well qualified consumers. If you are seeking a 15 year term, you should expect a par rate in the 3.625% to 3.875% range. To secure a par interest rate you must pay all closing costs including an estimated one point loan origination/discount/broker fee. You can always elect to pay less in costs, but you will have to accept a higher rate.
I favor floating all loans over the weekend. Lenders tend to be conservative with pricing on Fridays. Also, later today QEII begins with the Fed buying treasuries in the belly of the curve. I am hopeful this will help mortgage rates approach the record lows that were set just over a month ago.
Have a great weekend, be back on Monday.
We have one economic report on this final day of the week.. Consumer Sentiment. The Reuter’s/University of Michigan’s Consumer Center surveys 500 households on their attitudes on the economy and personal financial status. Market participants track consumer attitudes to gauge future economic momentum. An optimistic consumer is more likely to spend, this benefits stock markets. A pessimistic consumer is more likely to save, which supports low yields in the bond market. Low yields in the bond market allow lenders to keep mortgage rates low.
We receive two readings each month on Consumer Sentiment, a preliminary reading at the beginning of the month and a final reading. Today’s report is the initial look at November. Economists were expecting an uptick in sentiment to 69.0 from last month’s less than expected final print of 67.7. Today’s report indicated Consumer Sentiment rose to 69.3.
Lender rate sheets are slightly worse when compared to Wednesday. The par 30 year conventional rate mortgage remains in the 4.125% to 4.375% range for well qualified consumers. If you are seeking a 15 year term, you should expect a par rate in the 3.625% to 3.875% range. To secure a par interest rate you must pay all closing costs including an estimated one point loan origination/discount/broker fee. You can always elect to pay less in costs, but you will have to accept a higher rate.
I favor floating all loans over the weekend. Lenders tend to be conservative with pricing on Fridays. Also, later today QEII begins with the Fed buying treasuries in the belly of the curve. I am hopeful this will help mortgage rates approach the record lows that were set just over a month ago.
Have a great weekend, be back on Monday.
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