Mortgage Rate Update

Well, here we are at the end of May and it falls on a Friday!

I always love May -- it has my birthday, my anniversary, the flowers are blooming and summer is kicking into gear!

Mortgages rates, on the other hand, did not fare well during May.  Just look at this chart below on mortgage bond prices (prices down, rates up).

That blue line being plotted on the chart is the 200 day moving average.  This is a very good indicator to show the strength or weakness of the market on a longer based view.

As you can see above, mortgage bond prices have tanked since early May.  They are now at the lowest point they've been in over a year.

While no one really wants higher rates the ones we have after this decline in price still are low in comparison to most of history.

The important signal we are getting from May's price action in mortgage bonds is that we may have finally tipped over the edge and the end of the long, 11 year cycle in lower rates.

A secular change is underway.

While the market will still ebb and flow the longer term trend will be for lower prices (higher rates) for mortgage bonds.

Have a great weekend!
Brett Grendahl

Bond Prices Down, Home Prices Up

Some good news and bad news this morning.

First the bad:  mortgage bonds are moving lower in price (higher in rate for mortgages) and have now hit a price level not seen since last May.  Here is the chart.  Red is bad, green is good (when you are thinking about mortgage rates to you).

What is the good news?

The Case-Shiller 20-City Compoasite Index reported home price gain of 1.4%.  This is the fastest gain in prices in over 7 years.  Here are some articles on it:

http://www.marketwatch.com/story/us-home-price-growth-fastest-in-nearly-7-years-2013-05-28

http://www.cnbc.com/id/100769361

Keep in mind, even though mortgage rates are rising they are still near record low levels and any rise from here should not impact a decision of home affordability.


If you are buying a home in any of the 50 United States, I can assist.  When you want a seasoned person to help you on the largest financial transaction in your life, call me.  Let me tell you why!

Brett
www.BrettGrendahl.com

Mortgage Bonds at Key Technical Level

Mortgage bonds are falling in price again today, continuing the downslide of this week.  See it here:

The 101.50 level is a key level of technical support.  This price area must hold or it may get even uglier real soon.

Good news is that the bond market is only open until 2 PM EDT today and is closed on Monday.

Should be a good thing to have some days of rest and contemplation.  Hopefully, that will bring better mojo on Tuesday.

Also, another element to note is that all the refinance applications taken during late April and the first few days of May will be closing and the prior loans paid off in late June and early July.  Why is this important?  Well, the Federal Reserve owns a lot of these loans right now and will take the cash from the prepayments and redeploy into new purchases.  That added money supply should provide more support for higher bond prices in the near future.

As always, this market is a complicated one and manipulated one so super hard to predict!


Did you know that I can handle a mortgage financing need in all 50 states?  Yep!  If you want the help of a seasoned pro, just reach out and engage me.  -- Brett

www.BrettGrendahl.com

Mortgage Bonds Getting Hammered Today

Wow!  Look at this chart on mortgage bond prices today.  See that big red line near the far right?  That shows mortgage bond prices down 91 basis points today.

This is some ugly price action and expect mortgage lenders to be repricing rates to the worse today.

Today's price action is moving to new lows of the year, dipping under the lows we saw in March.

This action is coming off of Bernanke's testimony.  Let's hope we see some stabilization soon.


www.BrettGrendahl.com

Unemployment Rate for College Graduates

Quick jot down of something I just read.

The unemployment rate for those with a college degree is under 4%.  I have to validate this data.

If true, that speaks to the tighter labor market for skilled people.

BG

Mortgage Rates Headed Back Down

Hey there!

It's a great Thursday, lots of sunshine.  I like it!

Looks like mortgage bonds like today too as they are up big after being hammered the past week or so.

Take a look at this chart below.  Remember, green is good for lower mortgage rates.

The technical pattern formed by the past three trading days is a variant of a Morning Star Candlestick pattern.  You don't need to know what that is just what it means.  What does it mean?

Well, after a downtrend, the appearance of this pattern means that a price bottom looks to have been found and we should see higher prices in the days ahead.

Higher prices for mortgage bonds means lower rates.

This might coincide with a pullback in the equity markets.  It has been a very long time since the stock market has had a 5% pullback.

For now, it looks like better pricing on mortgage rates in the coming days.

Brett

www.brettgrendahl.com

Interesting Article on Key Bond Technical Level

After you get past the ominous title of a "death cross" this is an interesting article on the key technical action in the bond market at present.

http://www.cnbc.com/id/100739611

Brett

Mortgage Bonds Holding Their Ground Today

Look at the green candlestick line on the far right of the chart below.  Why?  Well, that shows the positive action of today's trading in mortgage backed securities.  When those prices go up, mortgage rates go down and vice versa.

Now, looking ahead, if we see continued price strength and a resumption of the uptrend seen in this chart we should see rates get back to the levels seen last week.

That big red candlestick line on the right hand side of this chart was last Friday.  Why the price decline on that day?  Well, that was the monthly Jobs Report number and it came in better than expected.

Now, one report does not make a trend so let's wait and see where mortgage bonds go from here.

www.brettgrendahl.com

Consumer Debt Service Level Lowest in 30 Years

Found an interesting article during my morning reading today.  This is a positive sign for all of us.

Consumer Low Debt Service Levels

Record Low 15 Year Fixed Mortgage Rate

Wow!

The 15 year fixed mortgage rate has hit a record new low.  Funny thing is, from the read of the technical picture further downward move on rates looks likely.

Here is an article on it
http://www.marketwatch.com/story/15-year-mortgage-rate-hits-record-low-of-256-2013-05-02-1091013?link=MW_popular

Reminder, I can help with mortgage needs in all 50 states.  If you want my advice and assistance, please email me to start talking about it.

Brett

www.brettgrendahl.com