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 Here are the rest of the last week's comments and the days that affected rates most lately....... Time to Refinance that ARM?..... The week in review November 7 The Week in Review..... Highest Rates since 7/1/2004 October 24 PPI follows the lead of last week's CPI with highest reading in 25 years..... October 18 The Week in Review - The buzzword is Inflation.... October 9 Hold on to your Hats, rates will be going up..... October 3 Greenspan worries about "exotic" mortgage instruments..... September 26 |
9 weeks in a row with higher rates..... The week in review November 14 1:56 PM EST Rates moved up again last week making it 9 weeks in a row that the Freddie Mac weekly survey of mortgage brokers has indicated an increase. This week may finally slow down and let us have a breather on the higher rates week after week, but don't let this fool you. The risk towards higher rates is still much higher than the hopes of lower rates coming at us. Last week was light on data to affect the market and Veteran's Day on friday created a short week that actually resulted in lower rates Thursday afternoon and continued into this morning, but Mr Greenspan's morning speech is giving rates a bump higher this afternoon. This more relaxed feeling has certainly contributed to the higher rates we are seeing along with the higher energy prices that will really start to be felt as the cold weather begins to move into the northern reaches of the US and that cold weather is translated into higher numbers on the heating bills. This is really what investors are looking at as we have seen the higher rates The Week Ahead Looking forward, this week brings us one of the busiest weeks of the year when it comes to economic data and will give us both good news and bad news causing a bumpy ride on rates. Retail Sales numbers on Tuesday, the Consumer Price Index on Wednesday and then Housing figures on Thursday will give investors 3 days af data to chew on and figure to have rates bouncing around on these reports. Inflationary numbers within the CPI on Wednesday will likely have the largest effect on longer term rates as we all look to see if the rise in energy prices has begun to trickle down into other products. Of course, gasoline prices went down in October, but the cost of natural gas and electricity remained high. Retail Sales will likely be low as October not only had the effects of the hurricanes to deal with, but higher energy prices and families saving towards christmas often have an effect on these numbers. This report is expected to come in with very little increase from year to year and may well be the best day of the week to lock in a rate when it comes to your mortgage. The third big report of the week will be the Housing numbers and the higher rates are expected to finally put in a show and bring housing starts down a touch. The continued increases by the Fed are taking their toll on home euity loans and adjustable mortgages as rates are now coming out in the 8's and 9's with the latest payments. It is still quite a surprise for many borrowers when they hear numbers with rates like that. Don't be surprised as you start getting quotes on those second mortgages or the piggyback loans that have become so popular in order to avoid the PMI payments. read my article on choosing between PMI and a piggyback loan for more details. Have a great day..........Scott Updated Forecasts This continuing trend of higher and higher rates has caused me to change the rate lock advisory to lock for all four stages. In addition, I have updated my forecast to show rising rates for the second half of 2005. This is a combination of what we have seen in both the market and the economic reports over the last 3 months and the continued tendencies of the market to shoot higher of very little good news. Now, on the bright side, the global economy is still going nowhere. We have quite a quandary where if the market does not rise in response to continued increases by the Fed we could see an inverted rate curve due to the global pressures. This is still a very good possibility and should we see anything close to an inversion, rates could drop quickly. The very high number of mortgages that are ARM's vs Fixed rates would switch in a heartbeat if you can get a 30 year fixed at a lower rate than a 5 year ARM!! If this fine line were to get crossed, you can throw all the forecasts of higher rates right out the window. Where are rates headed in the next 3 months? It looks like the trend will be heading steady or higher with new projections out and the higher oil prices and Fed rate increases driving rates over the next 3 months Where are rates going this year? The entire first part of the year, I have been sticking with the experts position that for the year of 2005, we can expect to see mortgage rates to level out in the 6.5% to 6.75% range for a 30 year fixed rate mortgage by the end of the year. Although this forecast has been the same for the last 3 years and has yet to materialize, this long term forecast must be still taken into account. My personal expectations are that 30 year rates will be rising for the second half of 2005 barring any more terrorist attacks. If I were financing/refinancing a home . . . . I would Lock if my closing was within 10 days I would Lock if my closing was 11- 30 days away I would Lock if my closing was 31 - 45 days away I would Lock if my closing was more than 45 days away *As always, this commentary is only my personal opinion if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any/all other borrowers.
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