The Mortgage Update 9-23-2013

The bond market appeared to settle down late last week after the Fed announced they will not begin tapering this month. Treasuries declined overnight as the U.S. prepares to sell $97 billion of debt over the next three days. Atlanta, New York, and Dallas Fed Presidents will all deliver speeches today. Debate over the federal budget and the debt ceiling resume today on Washington. This week’s economic news has moderate potential to move the market; many investors are waiting for next week NFP numbers to give any indication of the Fed’s next monetary move.

The Mortgage Update 9/20/2013

After one of the largest rallies MBS has seen this year, yesterday mortgage rates moved slightly higher due to low trading volume. Today Fed Bank of St. Louis President James Bullard will speak on economic and monetary policy. Kansas City President Esther George will also take the stage at an Open Market Committee meeting. Investors are looking for any hint of future plans to reduce asset purchases. No other economic news on the calendar today...Let’s just hope Ben keeps buying our bonds today so we can ease into the weekend.

The Mortgage Update 9/19/2013

I didn’t see that one coming. In an unexpected turn of events, Ben Bernanke announced yesterday that he will not be tapering bond purchases this month as expected. The Fed stated job growth is not where they would like it to be as the reason for the decision. Bonds rallied on the news, causing a rare re-price for the better. Purchases of previously owned homes fell 2.6 percent in August according to a report due out at 10 AM today. We will see if anyone notices.

This is a chart of what happened yesterday when the FED announced they are not going to TAPER.  What does this mean?  They will continue to buy Mortgage Backed Securities (MBS) in an effort to keep Mortgage Rates at or near a Historic Low.  This chart is the PRICE of the MBS.  When the price goes "UP" rates come "DOWN" and the opposite is true.  So as you see by the chart, we had a very impressive run up in "price" bringing "rates" down.   For those not familiar with the trend.  This is a BIG move.  So today should be a very good day if you haven't taken the opportunity to take advantage of this opportunity the FED has given you.

The Mortgage Update 9/18/2013

Another month has passed and that means another FOMC announcement. Treasuries were down this morning amid speculation the Fed will announce a reduction in bond purchases. Economists agree the reduction could be to the tune of $10 Billion a month, mostly in Treasuries. Housing starts rose in August according to a Bloomberg survey. Today the market is reliant on Ben Bernanke and his announcement today. However, many believe the “tapper effect” is already priced into the market. We will see today….

The Mortgage Update 9-17-2013

The bond market rallied hard on news Larry Summers was no longer a candidate for the next Fed Chairman. However, after the dust settled we lost all morning gains by the end of the day. Treasuries advanced for a fifth day, the longest winning streak in almost a year. Consumer Price Gains have decreased to 1.6 percent in 2013. The trade volumes finally picked up yesterday ahead of the Fed taking the stage tomorrow. All eyes are on Ben Bernanke and his announcement tomorrow. Will they taper? If so, how much? We are all guessing…until tomorrow.

The Mortgage Update 9/16/2013

This could get interesting. Friday, the bond market remained flat for most of the day. Despite strong trading levels, no economic news moved the needle. This week we start the week with industrial manufacturing news and housing market index. However, the main announcement is Wednesday when Ben Bernanke takes the stage again to discuss the FOMC’s September meeting. Surprisingly, late Sunday Larry Summers, the heir apparent to replace Bernanke, pulled out of the running. Stocks rallied over night over the news.