Mortgage Rates Holding

Good morning!

Friday the 13th.  Ominous?  Scary?  The title of a movie?  Or just another day to kick off a summer weekend?

Who knows, I'm here to write about mortgage rates today.

Well, mortgage bonds made it through the June jobs report holding their ground.  All in all, conforming rates have been moving in about a 0.25 range over the past few weeks.  So, fairly stable.

Take a look at the chart below.  I'm writing this blog post before the market open so we will see what today brings.  Yesterday the mortgage bond market made some good gains and set a pivot point in place, for now.

I'm looking for continuation of the upside price momentum this morning.  What I'd like to see is that price get back above the red horizontal line in the chart below.  That red line shows where price resistance is expected.  If the market can gain above that resistance and hold its price, we should see rates holding their levels with possible improvement into next week.

Have a great weekend!
Brett
Email me here
Apply online for a new loan with me here.

Fannie Mae 3.5% Coupon Price

What? Lower Mortgage Rates Again? Yes!

Just a few minutes between meetings to jot down this important update.  What's happening?

Well, surprisingly enough, mortgage bonds are falling higher, pushing mortgage rates lower again.  Mortgage bonds are testing key resistance levels.  If these resistance levels break, we might see quite a rally taking rates lower.

Might we see the conforming 30 year fixed rate back under 4.0%  It is quite possible.

Check out today's chart below.

Fannie Mae 3.5% Coupon

Remember, in the chart, green is good (lower rates) and red is bad (higher rates).


If you want me to play with numbers and see if a refinance makes sense for you, let me know!

Brett Grendahl
952-393-9333 mobile
bgrendahl@bankingunusual.com

Memorial Day Weekend Brings Lowest Mortgage Rates of the Year

Good morning gang!

As I begin this post I notice I sure have taken some time between posts!  Too much face down in my work I guess.   :)

Time to share some thoughts on mortgage rates as we have reached lows for the year, and lows that are 11 month lows.

Take a look at the mortgage-backed securities chart below.

FNMA 3.5% Coupon 3 Month Chart

What's going on here?

This 3 month chart shows mortgage bond prices going higher the past three months.  In this chart, green is good for lower rates and red is bad and brings higher rates.

Those horizontal red lines show areas where we expect price resistance to exist.  Resistance to higher prices.  As you can see this past week the prices have been moving sideways, in a narrow channel.  This chart pattern looks like the market is attempting to break that resistance and go higher.

Now, for a longer term perspective, check out this 2 year chart below.

FNMA 3.5% Coupon 2 Year Chart

What is interesting to me here is how, if prices can break higher from a resistance level set back in November 2013, that the market will have some room to run.

Most fundamental aspects of the economy, where we sit in the waning of Quantitive Easing of the Federal Reserve, and the duration of the time we've had such low mortgage rates leads one to believe that mortgage rates should be going higher.

If current resistance levels hold, that will likely be the case.

But......but......it pays to heed the market price action at these levels.  As we've learned the past handful of years, it is very hard to predict what will happen.

Stay tuned!

GREAT NEWS FOR HOMEBUYERS
The bottom line of this blog post is that if you are planning a new home purchase during the busiest time of the year of the year for purchases, you are getting a nice market gift of low rates.

THINKING OF A REFINANCE
If you are in need to refinance your mortgage financing, here is your window of opportunity to save on the cost of the interest.

Of course I can help on either of those needs.  To loop me in, please call at 952-886-7227 or get my contact info at www.brettgrendahl.com

Brett Grendahl

Good Start to 2014 for Mortgage Rates

Happy New Year gang!

For the first post of this year, and for some time, I thought to cover the good start for mortgage rates for 2014.

After appearing that rates were moving yet higher, given the Fed's move to beginning tapering their Quantitive Easing, and what looked like promising jobs data, last Friday's monthly Jobs Report came in much weaker than expected.  This gave mortgage bonds (mortgage-backed securities) their best rally day in some time.

Look at this chart:

3 Month Fannie Mae 4% MBS

That big green bar towards the right was last Friday's trading activity.  That positive rally broke the trend line of the downward action in price over the past three months.  Coupled with today's continuation rally and rates should be stable for the coming weeks.

Most likely, the price will move up to test that blue line (the 200 day moving average).

For those spring market purchases this price action should temper any major rise in rates.  Good news, right?

I expect to be blogging more regularly this year.  So, stay tuned here for more from the front lines of mortgage finance on mortgage rates, Qualified Mortgages, and what it really takes to get a mortgage closed in today's lending environment.

I CAN HELP YOU

If you are purchasing a home in any of the 50 States I can help you.  Why take the risk of working with anyone else.  My deep credit underwriting background and broad industry experience benefits you in the comfort of knowing you will close on time and as expected.  That trust and confidence of my clients is what has built my book of business and kept me around so many years.

I'm always happy to start a relationship with people who value what I do, make home purchase dreams come true!

"Life is a garden.  Dig it!"

BG

www.brettgrendahl.com

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Mortgage Rate Forecast | Going Lower?

A quick post after reviewing the price action on the mortgage-backed securities (MBS) I want to share what I see.

So, what is it?

Well, not to bore you with the nitty-gritty technical details that provide a foundation for what I am predicting but, take a look at the last few days of price action depicted below.  You can see the last four days price is moving horizontal in small daily ranges.

This is occurring after MBS prices have moved back ABOVE their 200 day moving average (depicted in the blue line).  This setup is generally bullish;  meaning odds favor higher prices ahead.

As a refresher, higher prices lead to lower mortgage rates, and vice versa.

Who knows what the catalyst for the move higher in price from here will be?  It might be some news report.  It might be something from the equity markets?  It really doesn't matter but the technical setup is ideal for a move higher.

Stay tuned.

3 Month Fannie Mae 4.0% Coupon (MBS) Price

Brett  Grendahl

Need a mortgage? Here is how you can contact me to help.

I can lend in all 50 of the United States.

Economic Weakness Persists and Mortgage Rates Move Lower

Good morning gang,

I haven't written a blog post in a bit, super busy on many fronts and nothing too much to report.  So, why waste the time writing and tire your eyeballs on the trivial, right?

Well, after looking at the price action in the mortgage-backed securities market today there is news worth sharing.  So, here we go!

What is it?

Well, the September Jobs Report was released today.  Normally, this monthly report comes out on the first Friday of the month but with the government shutdown it was delayed.  Now, the report came out at 148,000 jobs versus the 180,000+ number the market expected.

Mortgage-backed securities (MBS) are up strong on the news and, more importantly, prices have moved back above their 200 day moving average.  Remember, as MBS prices go up, mortgage rates go lower.

Look at these charts:

3 Month Chart on Fannie Mae 4.0% Coupon

The chart above shows how today's move up in price has moved above the 200 day moving average, shown in the blue line.

One Year Chart on Fannie Mae 4.0% Coupon

The chart above shows a longer-term view of the price action.  You can clearly see how prices fell hard from May through September.  From all that choppy price action in August and September prices formed a base of support and have since moved higher.

From the technical setup the odds are increasing that we will see mortgage rates move lower.  I expect that a good price target is a conforming 30 year fixed rate around 4.0%.  For now, I don't think below 4.0% with no points will become available but, in this manipulated market, who really knows, right? :)

Another wrinkle to these improving rates is that we might see the conforming fixed rates move back below the jumbo fixed rates.  We are in a time of a weird market anomaly where the jumbo rates are sometimes pricing lower than the conforming ones.  This won't persist forever.

Bottom line:  expect better mortgage rate pricing in the weeks ahead.

Brett

How To Contact Me to Help You
I can provide mortgage financing in all 50 states.

The Fed, Tapering and Unemployment Rate Target

Good morning folks!

It is a rainy morning here in Minneapolis and the changing of seasons is being fully felt by me.  A very different feeling than the past few years living in Northern California.  My daughter is excited for snow.  Let's hold off a bit on that, can we? :)

Okay, the announcement from the Federal Reserve Open Market Committee's meeting comes this afternoon.

For months I have expected this to the date that they announce the beginning of tapering of their Quantitative Easing (QE).  The market has been talked there and this is still expected.

I think they will announce tapering to begin in October at a rate of $10-15 billion per month.

Mortgage rates have priced this in and we will likely see a rally in mortgage bonds (driving mortgage rates a little lower) on the news.

Also, I would not be surprised to see the Fed also announce something like lowering the unemployment rate target.  The unemployment rate target is what they've communicated to the market as their trigger point for when they will raise their Overnight Rate.

By lowering the target they will give the market something to offset what they take away with the beginning of tapering.

It should make for an interesting afternoon.

Brett

How to Contact Me

Fall Brings Market Changes

Good morning,

Okay, back at writing to the blog after a very busy August and early September.  You can really feel the crispness in the morning air here in Minnesota, the tell-tale sign of the changing seasons.

A lot of change in place in mortgage finance.  I'll begin writing in more depth on these topics in the coming weeks.  For now, here is a quick overview of the topics that are catching my interest and thoughts.

Syria
The global politics and potential unrest from military conflict are unknown.  Need to keep an eye on developments here.  Weird days when Putin seems to be doing better statesmanship than Obama.

Fed Taper
September 18th is this week and this is where I fully expect the taper to begin.  With Summers now bowed out of the options for a replacement for Bernanke the equity and bond markets are rallying this morning.  Yellen is the favored pick now.

Dodd-Frank
More implementation of new rules coming from the Dodd-Frank legislation looms come January 1st.  The industry is abuzz about the Qualified Mortgage rules and Loan Officer compensation models out in the marketplace.  Lots to digest here.

Conforming Loan Limits
Expect these to be lowered come January 1st.  They were moved up to $417,000 back in 2006, stayed there and now look to be going lower.  This will further tighten underwriting and change the marketplace.

Mortgage Rates
Today, mortgage bonds are up strong on the news that Summers is out.  This price action breaks the downtrend so we might see lower mortgage rates for a few weeks.  Great time to be locking in  if you have a mortgage application in process.


Those are the big buckets of thought for me.  I'll be sharing more in the coming weeks.

Have a great day!
BG

How to Contact Me

Can Mortgage Rates Improve Here?

Good afternoon,

Quick post on mortgage rates as mortgage bonds sit at a key technical level.  Reminder, as mortgage bond prices go down, rates go up and vice versa.

If you look at the 3 month chart below on mortgage bonds you can see they've been moving lower in price.

Take important note of the green line I drew.  That line represents a level that has proven to be stiff price resistance to any move higher.

Well, today's positive action in price (up) is breaking that trend line.  Will this hold?  Will bonds head higher in price?  I don't know.  Let's keep a close watch.

Mortgage Rate Monitoring

Quick note, we have changed our focus to the FNMA 4.0% coupon for gauging mortgage-backed securities trading, and mortgage rates.

Just a few months ago we were watching the 3.0% coupon, then to the 3.5% one and now stair-stepping up again.

BG

Update on Mortgage Bonds

Quick update with a chart (below) on mortgage bonds.

Price is stable and the trading range is narrowing before we get news from the Federal Reserve on Wednesday and the monthly Jobs Report looms on Friday.

Where will we go from here?  The news of the week will likely be the catalyst now.

3 Month Price Chart on Mortgage Bonds (FNMA 3.5% coupon)

If we get an upward break from here we should see a little room to run higher and, subsequently, some lower mortgage rates for a few weeks.

Brett
How To Contact Me

Mortgage Rates. Here they are, but where are they going?

Happy Friday everyone!

Man, this was a busy week;  "what happened again?"

Better to be busy, than not, so I'll keep going and update on where mortgage rates sit.  And, provide a glimpse into where they might be going.

Here goes!

Check out this chart.

3 Month Mortgage Bond Price Chart

What is important about this chart?  What the heck does it mean?

Remember, as prices on mortgage bonds go down, mortgage rates go up -- and vice versa.

The blue line is the 200 day moving average.  As you can clearly see, we have fallen WAY below it.

The red line is the 25 day moving average and over the past 10 trading days this has been acting like a magnet on price.  I like it.  I like it because I see technical strength being built.  A new key price floor is, hopefully, become strong.

The Federal Reserve will have a lot of money in hand from recent prepayments on mortgages that were just paid off on a refinance.  They will put that money back to work in buying the current market.  None of their communications have indicated that this practice will end.

For a refresher, the Federal Reserve's Quantitative Easing is accounting for $85 billion in open market bond purchases.  $45 billion of this is in U.S. Treasuries.  The remaining $40 billion in mortgage-backed securities.  The monthly amount of of rollovers from early prepayments is estimated at $20-50 billion.  A lot of money.

The Federal Reserve is now changing their dialogue to discuss a possible lowering of the unemployment target of 6.5% to something like 6.0%, or 5.5%.  This is another way they can adjust and continue to monetary stimulus.

Rates Will Do...?

The way I read the technical picture, and my gut feel, is that we will see a rise in price from the 25 day moving average area and get to 103 basis points (bps) before serious price resistance kicks in.  That gives a possible 200 basis points at hand.  Such a move may translate into a 0.5% lower 30 year fixed rate.

You know, that seems even more plausible as that'd take the 30 year fixed rate to near 4.0%, a key psychological level.


This is how it feels as a loan originator these days:

You know, sometimes it feels like I'm always guiding my clients through an ever-changing maze.  At least I feel confident that I have a good feel on predicting the twists and turns so that we can execute through them.  When a client's home purchase is on the line, making sure we close smoothly and on time is what I'm thinking.

The cartoon above lets you know the humor you need or mortgage finance may drive you crazy these days!

Do you know anyone thinking about buying a home?  If so, please introduce us as I'm never too busy to help lend a hand.  My business is primarily from the introductions by past clients like you.

Have a fantastic weekend!
Brett

How To Contact Me

The Lowest Unemployment City is Minneapolis

Good morning!

Welcome back from the 4th of July holiday.  I hope you built some great memories.  Mine include two fireworks shows from equally impressive vantage points.  My young son saying "I just don't know where to look!" as we could see 10 separate shows going off across the metro area.  The second from a river bluff over the St. Croix river where the fireworks were right in front of us.  Wow!

Add in a drive in movie last night to cap the long weekend off!

Check out this article in Slate where we find that Minneapolis has the lowest unemployment rate for any city with a population over one million people in the United States.
http://www.slate.com/blogs/moneybox/2013/07/03/you_should_move_to_minneapolis_lowest_unemployment_big_city_in_america.html

This is great news for our local economy and, in turn, the housing market.

Have a great week!

Brett
How to Contact Me

Mortgage Rates Headed Higher

Here we are on what would normally be a light day of financial news but after the release of the strong than expected June Jobs Report mortgage bonds are getting creamed!

As I type I see the Fannie Mae 3.5% coupon trading down 194 basis points in price.  Ugh.  Just looking at this chart (see below) makes me want to close my laptop.

When will this carnage end?  Hard to say as we continue to blow through expected levels of price support.

The continued downslide in price (move higher in rates) continues to cement in what I thought weeks ago.  What was that?

That the end of the secular (11 year run) for lower and lower mortgage rates is now done.  Finished.

So, while it might take a little while to accept this reality accept it we must.

Don't let hope for a return to lower rates misguide your thinking.  The odds are severely stacked against it.

I'll continue to watch the trading and inform you here as we will eventually find price support somewhere.

Until then, enjoy the holiday weekend and the growing strength in the housing market that we are seeing in the data.

Brett
Get In Touch With Me Here

Median Home Mortgage Rate History

Good morning,

The office, the roads and the coffee shop sure are lighter as many people are already off on vacation for the 4th of July holiday.

I was doing some research on mortgage rates.  So many conversations with people the past few weeks have been "what happened and will now happen" to mortgage rates.  We just saw the conforming 30 year fixed rate mortgage move from around 3.5% to 4.5%.

The 3's for the 30 year fixed rate mortgage look to be gone for years to come.

But, is 4.5% really that high?  Yes, it seems so in comparison to a 3.5% rate but let's take a longer view of history.

The median mortgage rate for the past 10 years is 5.72%.

The median mortgage rate for the past 20 years is 6.52%.

The median mortgage rate for the past 30 years is 7.45%.

And, for the past 40 years that median rate is 8.15%.

So, a 4.5% rate is still low by historical standards.  Instead of being too upset that the 3's are no longer available we should still be thankful to have rates lower than most time in history.

Now, some mortgage humor.  If you have been in the mortgage business for a long time, like me, this cartoon is laugh out loud funny in depicting what the business has become the past few years.

Brett
How to Contact Me

New Mortgage Payment Relief on the Way

More U.S. homeowners struggling to make their mortgage payments will receive relief soon through the Streamlined Modification Program.

These are for borrowers whose loans are with Fannie Mae and Freddie Mac.

Read this article for more details.

http://money.cnn.com/2013/07/01/real_estate/mortgage-payments/index.html?hpt=hp_t3

Mortgage Rates Stabilizing Here?

Quick update on mortgage rates.

Mortgage bonds have taken a beating the past few weeks.  However, the past few days trading action show possible stability.  This looks to me like an area of price support establishing itself.

Look at this chart.

Remember, as mortgage bond prices go down, mortgage rates go up.

That green bar on the very right hand side shows prices that prices opened and have moved higher (that's why the bar is colored green).  This pattern of today's bar in conjunction with yesterday's one is called a Bullish Engulfing candlestick pattern.  This pattern, seen at the end of a downward move, is typically a sign of the market turning.

So, what does that mean to you?

Well, if you are in need of locking in a mortgage rate on a current mortgage loan application in process you should watch for a move for improving rates in the coming days.

Now, don't expect much lower rates but 0.125, 0.25 to maybe 0.375 lower in rate might be available.

However, once we reach the low of the upcoming move expect rates to stop their improvement and then get back on the rising trend we are now in for years.

Brett
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Home Price Rise Sets a Record

Good morning,

Some good news in the housing data today.  The Case-Shiller report for April noted 12% gains in April.  That is the largest monthly year over year gain reported since this index has been calculated.

Here are some articles for more details:

http://www.cnbc.com/id/100839986

http://www.marketwatch.com/story/home-prices-see-record-jump-in-april-case-shiller-2013-06-25

http://www.businessinsider.com/april-case-shiller-home-prices-2013-6


Brett
My Contact Information

Bond Market Worsening

Good morning,

The bond market continues to weaken.  In fact, the recent move in the 10 Year Treasury is the biggest move in over 50 years.

Can we say volatility is back?  Look at these two charts.

6 Month Fannie Mae 3.5% Coupon Price

and this one....

6 Month 10 Year Treasury Yield

Many have  forgotten what market volatility looks like after the heavy-handed years of the Federal Reserve with their Quantitative Easing policy and actions of late.

Price stability is being sought and it still is too hard to say where it will occur.

So, we watch.

Mortgage rates continue higher in the meanwhile.

Mortgage rates under 4% are now gone and do NOT expect to see them again for years and likely decades to come.

Brett

Get My Contact Information Here

Mortgage Rates Having a Tough Go of It

Minus 127.

Minus 127 basis points that is.

Minus 127 for mortgage bonds today.  It sure has been some time since I've seen a print like that for the mortgage bond market for the day's trading action.

Things were going along fine until the Federal Reserve's press release after their two-day meeting.  Then, this (see chart below):

Remember, red is bad (it means higher mortgage rates).  Green is good (lower mortgage rates).

Since the beginning of May mortgage bonds have lost 600 basis points.

Mortgage rates have now moved almost a full point higher.

Where do we go from here?  Well, a move higher that retraces a third or half of the move down from early May is reasonable but I do not expect any further gains in prices for mortgage bonds from there.

The die seems cast for an upwardly trending mortgage rate market for the foreseeable future.

I expect this fact to take time to settle in for people as we've been spoiled by 11 years of mortgage rates moving lower and then hitting record lows.  Time to change the mentality on such things.

Brett
www.BrettGrendahl.com