Staten Island Mortgage Rates Improve Following Employment Data

Mortgage rates kept falling today, further extending the run into the lowest rates of 2013, but not quite in all-time low territory yet. Much of today’s improvement was a factor of the morning’s employment data from ADP–seen as forward indicator of Friday’s official Employment Situation Report. Bond markets, including the mortgage-backed-securities (MBS) that underpin mortgage rates, began improving at a solid pace well before rate sheets came out. The remaining economic data either “didn’t hurt” or flat-out helped rates keep dropping ahead of the day’s main event, The FOMC Announcement.

As it happens, the FOMC didn’t change much from the previous statement. Bond markets backed down from their aggressive rally, raising the risk that lenders might hike rates in the afternoon, but trading levels stabilized and most lenders remain at morning levels or better. Today’s move now brings 3.375% definitively into the fold as–at the very least–an equal partner to 3.5%. Lower rates make an increasing amount of sense as the costs associated with the lowest rates have benefited the most from recent movement.

This phenomenon (where the costs tied to lower rates improve more than those tied to higher rates while the whole rates spectrum is moving lower) is a natural part of broad rallies in bond markets, but was made doubly true by today’s announcement that Obama appointed a new FHFA Director, the agency that oversees Fannie and Freddie. The connotation is that the new director would loosen guidelines on HARP loans and possibly explore principal reductions, which would hurt the values of the mortgage-backed-securities that govern higher rates while leaving those linked to best-execution rates relatively untouched.

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About mortgagelendingstatenisland

I am a mortgage banking veteran with over 15 years of experience at every level of the mortgage arena. I am known as the "closer" because of my troubleshooting skils and ability to explain in detail to my clients and business partners "What Makes A Mortgage Approvable".

Posted on May 2, 2013, in Uncategorized and tagged , , , , , , , . Bookmark the permalink. Leave a comment.

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