The Day Ahead: Fiscal Headlines vs Beige Book

When was the last time there was any meaningful level of interest in the Fed's Beige Book?  Some economic releases, if you're not waiting for the wires, market movement will tell you something is up, prompting a check of the wires that might be hiding in that window you minimized in favor of the latest youtube gag reel of infuriating congressional incompetence.  But not so with the Beige Book!  In it's 2pm time slot, it can easily go unnoticed. 

 

Today's version, however, stands a better chance to get some attention considering there's just not much by way of economic data available during the shutdown, combined with the fact that bond markets are especially desperate for economic data!  Additionally, the lag time between the end of the data collection period and the Beige Book release is usually 9-12 days, meaning that today's may actually capture some of the early reaction to the shutdown.  That means that this report that's typically telling us stuff we already know from the other economic data, will today have a chance to tell us something that few other reports can--maybe.

 

More likely, the tenor of the day will either already be in place or the spotlight will be stolen by fiscal headlines.  Just when we were getting used to the idea that the debt-ceiling debate could drag on into November, politicians seem to be acquiescing to Main Street's admonishment (because Main Street is more focused on tonight's midnight deadline marking the expiration of Treasury's authority to borrow money as opposed to the actual date that we'd no longer be able to pay all our bills) and at least look like they're more serious about getting something done today.  If any of the reaction to headlines over the past 2 weeks are an indication, this is supposed to be negative for bond markets.

 

 

 

 

Courtesy of Market News Dailey

 

 

 

 

 

 

Apply Online for a Mortgage

Hi, My name is Bill Nickerson and I am the Branch Manager of Merrimack Mortgage in Acton MA.  I have been providing residential mortgages since 1991.

One of the steps in preparing yourself for home ownership is to obtain an approval from your lender or bank.  This process involves filling out a mortgage application and this can be done online, in person and even through the mail.  This process is done without identifying a property to purchase,

Bill Nickerson

we would use a range of purchase prices with your down payment to create payments that you are comfortable with.  It is important to understand that it is not what you are approved for, but what you are comfortable paying each month while carrying your traditional living expenses.  You will want to develop a long term plan, 5 to 10 years of what your goals will be with home ownership.  This will help you with budgeting and planning for the size of home you that will best suit your financial needs.

In addition to the application, we will be looking to verify your income, assets and debts through pay-stubs, bank statements and pulling your credit.  Once we have these items in hand, the approval process will take about an hour to confirm this information and provide you with an official approval letter.

To apply for a mortgage, you can click here Apply Online, once completed, I will receive an email alert and will begin the process immediately for you.

For more information on home ownership, to make an appointment for a consultation, feel free to call or email me anytime.

Bill Nickerson

Branch Manager NMLS #4194

Merrimack Mortgage Company, Inc

179 Great Road, Suite 214

Acton MA 01720

www.billnickerson.com       bill@billnickerson.com

978-273-3227

Now that the dust has settled...Mortgage Rates Improve!!

As I spoke a little the other day in the midst of the mortgage rate meltdown, many of us suspected that this was Wall Street overreacting to the Fed’s comments.  Now, before I say I told you so, we have to analyze what Ben Bernanke said last week.  It was clear and there were two parts to the story.

Not so easy it is Ben??
Alan Greenspan having a chuckle...

 

The first, Mr. Bernanke stated how the economy was heading in the right direction, things were getting better and it some point in the future the Fed would begin to start “tapering” its bond buying program that it has done for a few years now.

 

It would appear, the children running Wall Street only heard one thing….”There is Cake and Ice Cream in the break room!!”  What they missed was, “You can’t have any until you clean your room.”  Now, isn’t that much clearer to put it this way??

The Fed Chairman then followed his positive outlook comments by saying he was not altering its primary stimulus program, its stated intention to hold short-term interest rates near zero at least as long as unemployment remains above 6.5 percent and inflation stays under control.  This would be the cleaning the room part.

 

Mr. Bernanke said that the Fed intended to reduce the volume of its monthly bond buying later this year.  The Feds are currently buying $85 billion a month in Treasury securities and mortgage-backed securities to keep rates as low as possible.  What caught investors ear was “Later this year” he would start cutting his treasury buying program…this was sooner than originally planned.  Thus causing a panic in Wall Street and around the world where mortgage rates went up and the stock market tumbled.  Very rare to have both of these markets take a dive as they did. The Feds are now doing damage control and trying to put out a clear statement, which is working to some degree.

 

Now, back to the part of where “I told you so”, today’s headlines in several of the Mortgage News updates, “Mortgage Rates Fall at Fastest Pace in June”.  We are seeing a some improvement!  I don’t thing we will get back to the lows of earlier in the year, but we should see this calm down a bit and settle in to the low 4's.  This is my opinion and anything can happen with the economy.  Mr. Bernanke is a few pay-grades above me and he did not see this coming!!

Bottom line: If you are looking to buy a home or possibly refinance, the current rates are still at their lowest they have been since the 1960’s!!!  To give you an idea of what this may cost you if you were to borrower $100,000 at today’s rate of 4.50%, it would be $507 per month compared to $450 at 3.5% that we were quoting in April. This is only an increase of $57 per month.  This is based on a 30 year fixed rate with 0 points.

 

Is it the right time to buy?  Of course, if you are looking for a new home, it has never been a better time.  Ok, perhaps last month would have been better, but this still pretty darn good!!!

 

Do you have questions about buying a home? Do you have questions about what is the right program?  This is what I am here for, to help guide you through the process, to make it easy, affordable and most of all, get you and your family in to the home of your dreams.

 

Email me anytime with any questions you may have about the home buying process.

 

Bill Nickerson NMLS #4194

Merrimack Mortgage Company179 Great Road Acton MA 01720

Bill's Email

Mortgages Rate for today

This week, February 25^th 2103;

On Friday as it appears now the $85B in automatic spending cuts will go into effect. A lot of talk and slings and arrows between the two political parties has not led to any effort to avoid the cuts. Does it really matter? Given the movements in US and global stock markets, it doesn’t look like investors care much. The global equity markets continue to improve and US interest rate markets have seen little change over the last three weeks. Global markets believe that in the next week or so there will be a deal worked out that will rectify the automatic cuts. The 10 yr note and MBSs have seen very little change in the last few weeks; the 10 yr note yield trading in a 10 basis point yield range and MBSs in about a 6 bp range on the rates.

Treasury will begin auctioning $99B of notes Monday with $35b of 2 year notes, Tuesday $35B of 5 yr notes and Wednesday $29B of 7 year notes. The economic calendar has a number of key data points; nothing on Monday, Tuesday Jan new home sales, Wednesday Feb consumer confidence and Jan pending home sales, Thursday the 2nd look at Q4 GDP that is expected to be revised higher to +0.5% from -0.1% on the advance report, Friday the Feb ISM manufacturing index. Those are the main points this week. Along with them personal income and spending for Jan and weekly jobless claims.

 

The bond market and mortgage market continue with a slight bearish outlook; most all of our models remain bearish, however the strength of the bear has lessened over the last week. The 10 yr has very solid resistance at 2.05%; until the note can decline under 1.95% the outlook remains neutral at best. A close over 2.05% on the 10 will trigger more selling and a run up of about 10 more basis points in the rate.

What does this mean?  Treasury Markets are trying to push through the ceiling of 2.05% and if and when they do, we will see mortgage rates rise.  With this Friday approaching and the Government finishing up its last minute Fiscal Cliff items, the mortgage rate markets should remain flat this week.

Have a Wonderful Day!

Bill Nickerson

Vice President    Mortgage Network Inc

179 Great Road, Acton MA 01720

bill@billnickerson.com

978.273.3227

Posted via email from Bill's Mortgage News

Mortgage Rates Going Up?

February 18, 2013: This week; January housing data; starts and permits and existing home sales all a little softer than Dec data. Likely in part due to the realization the SS payroll tax increase hit although December data was quite good in itself. January inflation data with PPI and CPI, both are well within the Fed’s range so not likely to see much reaction. Thursday the Feb Philadelphia Fed business index is expected to show improvement, and it is Feb data that will draw attention. Wednesday at 2:00 the minutes from the 1/31 FOMC meeting will be released; recall when the Dec minutes were released there was talk within the group that the Fed was beginning to discuss possible plans on how to unwind the QEs when the time comes (certainly not likely anytime soon). The minutes will get a lot of attention and debate within markets.

 

The 10 year note yield is still hugging 2.00% levels while the US stock indexes are presently marking time with not much change last week. Talk still exists that the indexes may run  to new all-time highs before any anticipated correction that even the most bullish are expecting. Interest rates are unlikely to decline unless equity markets slip and there is a momentary change in the bullish sentiment that presently dominates the stock market.

What does all this mean?  Mortgage rates have inched up a little over the last several weeks as the markets are supporting the recovery.  Unless we see some declining economic numbers in the coming days or the stock markets go through a minor correction, we will see mortgage rates test new highs in the coming weeks. 

Have a Wonderful Day!

Bill Nickerson

Vice President    Mortgage Network Inc

179 Great Road, Acton MA 01720

bill@billnickerson.com

978.273.3227

Posted via email from Bill's Mortgage News