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

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