economy

How Spiking Oil Prices Have Mortgage Rates In Tow

May 23, 2008

High oil prices are derailing the mortgage market this week, taking an almost-vertical path higher. Since mid-February, prices are up by 50 percent. Rising oil prices can be a threat the U.S. economy because with every extra dollar that Americans pay to energy companies, there is less money available for every other company that makes […]

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Did You Ask: “Has There Been A Mortgage Rate Reprice In The Last Hour?”

May 20, 2008

Yesterday, several mortgage lenders issued three separate “rate sheets” in response to the changing mortgage market. It was the fourth time in the last 6 trading days that mortgage lenders issued multiple rate sheets in a day, and continued the trend that started in mid-January. The yo-yo nature of mortgage rates underscores the importance of making […]

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Looking Back And Looking Ahead : May 19, 2008

May 19, 2008

Optimism ruled the markets last week — optimism about employment, optimism about housing, and optimism about inflation. Mortgage rates edged lower overall. Despite the positive sentiment from Wall Street, consumer confidence in the economy reached a 28-year low. This is a normal divergence because investors live in the “future” of markets while Americans live in the […]

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The “Inevitable” Recession That Never Was

May 15, 2008

Retail Sales measures total receipts at stores that sell tangible “things” and — aside from weak demand for automobiles and automobile parts — Retail Sales displayed surprising strength in April. So much strength, in fact, that many experts are changing their predictions about the U.S. economy’s fate. Several months ago, most pundits declared that a economic […]

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How The 84,000 Parts Of Inflation Impact Mortgage Rates

May 12, 2008

When the everyday “Cost of Living” increases, our dollars don’t go as far as they used to.  Economists call this inflation. One popular method of measuring inflation is to track prices for 84,000 individual items and lump them together into a “basket”.  If the overall price is higher, then the economy is experiencing inflation. If a […]

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Looking Back And Looking Ahead : May 12, 2008

May 12, 2008

With little economic news to influence trading and despite a late-Friday afternoon spike, mortgage rates edged lower last week. Two weeks ago, when it lowered the Fed Funds Rate by a quarter-percent, the Federal Reserve noted two things: The economy was stabilizing High energy costs threatened inflation In the days that followed, though, the U.S. dollar […]

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Looking Back And Looking Ahead : May 5, 2008

May 5, 2008

Mortgage rates ended higher last week on stronger-than-expected jobs data, strong consumer spending, and an appetite for riskier investments. But, investors were most excited about the Federal Reserve’s hint that its rate-cutting cycle may be over. The week was quiet until Wednesday when the Federal Reserve voted to lower the Fed Funds Rate by a […]

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Why Mortgage Rates Aren’t Falling Even Though The Economy Is Shedding Jobs

May 2, 2008

According to the Bureau of Labor Statistics, the U.S. economy shed 20,000 jobs in April 2008.  The labor force now counts at 146 million people as employed. Normally, a loss of jobs would foretell economic weakness and would be a good thing for mortgage rate shoppers.  Today, though, traders had been expecting a larger loss of […]

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Why It Doesn’t Matter What The Federal Reserve Does Today

April 30, 2008

The Federal Open Market Committee adjourns from its two-day meeting at 2:15 P.M. ET today. Markets expect the Fed to lower the Fed Funds Rate by 0.250 percent in its press release but it’s not what the Fed does that matters to economy right now. It’s what the Fed says. If the Fed states that […]

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Making English Out Of Fed-Speak (April 2008 Edition)

April 30, 2008

The Fed lowered the Fed Funds Rate by a quarter-percent to 2.000% this afternoon. Because it is tied to the Fed Funds Rate, Prime Rate also fell by a quarter-percent.  Prime Rate is now 5.000%. Holders of home equity lines of credit and credit card debt benefited from the change and will see lower interest costs in next […]

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Looking Back And Looking Ahead : April 28, 2008

April 28, 2008

Mortgage markets lost ground last week on inflation concerns and a general feeling that “the worst may be over” on Wall Street. As investors moved money into the stock market, mortgage rates ticked higher for the second straight week. The biggest story from last week was the rising cost of gasoline. Rising energy costs combined with rising […]

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New Home Sales : How The Newspaper Headlines Mislead You

April 25, 2008

Newspaper headlines rarely tell the full story and today’s papers provide a terrific example. From the Baltimore Sun (and others): New-home sales lowest since 1991 8.5% March decline exceeds forecasts; prices also tumble As always, there’s more to the story than the headline. The Census Bureau reported a 8.5 percent decline in New Home Sales last […]

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Looking Back And Looking Ahead : April 21, 2008

April 21, 2008

The S&P 500 added 4.3 percent last week — more than during all of 2007 — in what was a good week for the economy and a bad week for mortgage rate shoppers. After Friday’s close, mortgage rates were higher by as much as 0.375% versus the Friday prior.  This reversed a trend of falling […]

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Looking Back And Looking Ahead : April 14, 2008

April 14, 2008

Through 5 days of see-saw trading, mortgage rates ended last week relatively flat; the downward tick into Friday’s close was a boon for home buyers this past weekend. It may be short-lived, however. Oil continues to sit near all-time highs and a slew of inflation-related data is crossing the wires this week. When inflation pressures are […]

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What 98 Percent Of Traders Think About The Fed’s Next Move

April 9, 2008

In three weeks, the Federal Open Market Committee will meet again and markets anticipate another cut to the Fed Funds Rate. Based on data compiled by the Federal Reserve Bank of Cleveland at the close of business yesterday, traders put the probabilities of the Fed’s next move at: 62 percent chance that the Fed Funds Rate falls to […]

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A Simple Explanation Of “Credit Crunch”

April 8, 2008

News sources like to use the term “credit crunch” in describing the U.S. economy, but they rarely define what a credit crunch is and what it means for Americans. A credit crunch is when the amount of available loans suddenly decreases over a very short period of time. Usually, it follows a period of lending which, […]

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How Mortgage Rates Benefit From 3 Months Of Worsening Employment Data

April 4, 2008

For the third month in a row, the economy shed jobs, suggesting that the U.S. is in a recession. March’s monthly loss of 80,000 jobs is the largest since March 2003 and follows January and February’s losses of 76,000 each. The weak data is edging mortgage rates lower as we head into the weekend. The […]

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Looking Back And Looking Ahead : March 31, 2008

March 31, 2008

Mortgage rates were up last week on weak housing data and a growing nervousness about mortgage bond quality. Rates would have been up more if not for a tame inflation reading Friday. The Personal Consumption Expenditures report fell Friday to 2.0% year-over-year, putting it back within the Federal Reserve’s comfort zone of 1-2 percent. PCE […]

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The Small Statistic Within Consumer Confidence That Didn’t Show Up On The News

March 26, 2008

Consumer Confidence fell to its lowest point in three years and anybody who watches the evening news can understand why. Each day, news programs barrage Americans with tales of economic woe and American Opinion is largely shaped by the media. After enough time, the reporting becomes a self-fulfilling prophecy. But, in the Consumer Confidence report, there […]

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Expect A Fed Funds Rate Cut This Afternoon

March 18, 2008

The Federal Open Market Committee meets today and will issue a press release in addition to cutting the Fed Funds Rate at 2:15 P.M. ET. The verbiage of the press release will be as widely watched as the rate cut itself because markets are curious about how far the Federal Reserve will go to lessen […]

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