Today's Interest Rates- Incredibly Low!

We just have to share today’s interest rates from Venessa Ward, Sr. Mortgage Broker at Pacific Residential Mortgage.  These rates are too incredible to keep a secret. Home Buyers, Take a Look!

Why Home Loan Rates are so Low

Source: Stuart Brown, Valley Mortgage Group

Have the nerve to go into unexplored territory. Alan Alda. And Bonds and home loan rates continue to reach the unexplored territory of record best levels. Read on to find out why.

Several factors are helping Bonds and home loan rates at the moment. First, inflation remains tame, as evidenced by the Consumer Price Index (CPI), which fell by 0.3% in May. This drop in CPI is the lowest in three years. The Producer Price Index for May also came in below expectations, showing that inflation at the wholesale level is tame as well. Remember, inflation hurts the value of fixed investments like Bonds (thus, hurting home loan rates, which are tied to Mortgage Bonds)…so inflation staying in check is crucial when it comes to home loan rates remaining at or near record best levels. Consequently, looking up some quick loans for your home can help you find the best one for you and your financials. If you would like to learn more about home loans, and how they can help you buy your first home, you can visit a site similar to as home loan rates and trends are always changing.

Moreover, it seems that these financial trends are also having an impact on other types of loans such as those involving an asset as collateral. You can learn more about these types of secured loans, and work out how much money you might currently be entitled to borrow, by taking a look at a secured loan calculator.

Also helping Bonds and home loan rates are weak economic reports here in the US and the ongoing drama in Europe. With Greece, Ireland, Portugal and Spain receiving bailouts and with the recent uncertainty related to the elections in Greece investors overseas continue to see our Bonds as a safe haven for their money.

Here at home, last weeks Initial Jobless Claims Report, Consumer Sentiment Report, and US Empire Index Manufacturing Report were all worse than expectations, while Retail Sales matched expectations. This data will be on the Fed’s radar screen at next week’s Federal Open Market Committee meeting (FOMC). A growing number of pundits feel that the Fed may mention some new stimulus in the form of a third round of Quantitative Easing (QE3). The news could initially bode well for Stocks and, in turn, could be negative for Bond prices and home loan rates. So this is an important news story to watch!

The bottom line is that home loan rates remain near historic lows, as now continues to be a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.

Stuart Brown
Sr. Loan Officer Market Manager
Valley Mortgage Group
Phone: (503) 538-1072
Fax: 5035381072

Mortgage Rates Improve on Inflation Data

On target inflation data and strong demand for the longer-term Treasury auctions were favorable for mortgage rates this week. The other major economic reports contained few surprises. As a result, mortgage rates ended the week lower.

In recent weeks, the primary influence for mortgage rates has shifted from global events in Japan and the Middle East to the outlook for inflation. Last week’s rate hikes in Europe and China to fight inflation raised concerns that the Federal Reserve was falling behind with its lack of tightening, and mortgage rates moved higher. This week’s tame inflation data eased those concerns, however, and mortgage rates improved. The March Consumer Price Index (CPI) rose 0.5% from February, matching the consensus forecast, and was 2.7% higher than one year ago. Core CPI, which excludes food and energy, increased at a low 1.2% annual rate, which was a little lower than expected.

Rising commodity prices have focused attention on the distinction between overall inflation levels and core inflation levels. Core inflation excludes the volatile food and energy components, so it is often viewed as a better indicator of short-term inflation trends by economists and Fed officials. While consumers certainly struggle with higher gas prices, longer-term inflation trends generally are more influenced by other factors such as wages and housing costs, which recently have been increasing very slowly. In short, stronger than expected demand for commodities and violence in the Middle East have pushed energy prices significantly higher, but Fed officials forecast that this represents a temporary increase in overall inflation levels. Commodity prices are not expected to climb at this pace indefinitely. If food and energy prices stabilize, then the gap between overall and core inflation levels will likely shrink.

Also Notable:

  • The Beige Book reported that economic activity “generally continued to improve”
  • Capacity Utilization rose to the highest level since August 2008
  • The sovereign debt of Ireland was downgraded again
  • Gold prices reached a record high above $1,480 per ounce


Week Ahead

Next week will be shortened by a holiday and will be a light week for economic data. Housing Starts will be released on Tuesday. Existing Home Sales will come out on Wednesday. Philly Fed and Leading Indicators are scheduled for Thursday. Mortgage markets will close early on Thursday and will be closed on Friday in observance of Good Friday.


Mortgage Interest Rates for April 4th, 2011

The week of April 4th – 8th has a quiet week when it come to economic reports, though news from Japan and the Middle East may keep the market volatile.  With the job report coming in lower on unemployment and flat on earnings, inflation is the primary concern both around the world and in the U.S., especially with the current monetary policy.

REMEMBER: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates to improve, while strong economic news normally has the opposite result.


Mortgage Backed Securities are up +22 bps from yesterday’s close (4.5% coupon now @ 101.91) and the Stock Market is up +20.13 at 12,396.85 this morning. No economic reports today. Oil is $108.11 per barrel and Gold is $1,433.20 per ounce.

Mortgage Market Update

With no major developments in Japan or the Middle East and little economic data on the schedule, mortgage markets had one of their quietest weeks of the year. The only significant market moving news was an unexpected announcement from the Treasury on Monday, which pushed mortgage rates a little higher. For the rest of the week, mortgage rates barely changed.

The Treasury announced on Monday that it will begin selling its remaining $142 billion in agency-guaranteed mortgage-backed securities (MBS) holdings. Beginning this month, the Treasury plans to sell up to $10 billion per month, as they wind down the emergency programs put in place in 2008 during the financial crisis. The expected increase in future supply pushed MBS prices lower. Mortgage rates, which are largely based on MBS prices, moved higher. The big question now is what the Federal Reserve plans to do with its larger $944 billion MBS portfolio. A similar announcement from the Fed would have a much larger negative effect on mortgage rates.

The housing sector data released this week was weaker than expected. February Existing Home Sales fell 10% from January. The inventory of unsold existing homes rose to an 8.6-month supply from a 7.5-month supply in January. Distressed sales accounted for 39% of all sales. Median existing home prices dropped 5% to the lowest level since April 2002. February New Home Sales fell 17%. As a result of price declines and continued low mortgage rates, home affordability is at the most favorable level in years, according to data from both the NAR and the NAHB.

Compliments of Brian Campbell of U.S. Bank
Phone: 503-309-9800
210 E. Main Street
Hillsboro, OR 97123

Federal Interest Rate Meeting is Coming Up

The meeting will be held January 25-26. MoneyRate’s Federal Reserve Update shares this:

The Federal Reserve policy-making committee, the FOMC, sets interest-rate policy and releases officials statements that chart the course for U.S. monetary policy. At the FOMC’s last meeting, the target range for the federal funds rate was kept at between 0 percent to 0.25 percent. In addition, the discount rate was kept at 0.75 percent.

There has been some internal debate at the Fed about raising the discount rate to 1.25 percent to maintain the traditional one percentage point spread over the fed funds rate. If this happens, consumers may be largely unaffected because the prime rate will likely remain at 3.25 percent. But it will be viewed as a precursor to a Fed rate hike.

Thank you to Stuart Brown of The Valley Mortgage Group for the alert about this upcoming meeting.

Stuart Brown
Sr. Loan Officer Team Leader
Valley Mortgage Group
(503) 538-1072