Pre-Qualify Your Loan Officer By Asking: "Where Do Mortgage Rates Come From?"

This snapshot comes from my Mortgage Market Guide dashboard. It perfectly illustrates an important point I make over and over again. If you want to know in which direction mortgage rates are moving, watch the price of mortgage bonds, not the 10-year treasury note. Mortgage rates are "made" from the price of mortgage bonds using a mathematical bond formula. This is fact. And by exclusion, this also means that mortgage rates do not come from the price of the 10-year...

Read More...

[Source: The Mortgage Reports Blog]

What Mexico and Australia Have In Common With Illinois And Ohio

I first saw this graphic in early 2007, courtesy of Barry Ritholtz. I had always meant to include it here along with some commentary, but forgot about it. How timely that Greg Swann sent it my way this weekend. I've been talking so much about the simulateously sagging and strong U.S. economy and I forgot to put our economy in a global context. As 27 percent of the world's economy, we're large. What you are looking at above is a...

Read More...

[Source: The Mortgage Reports Blog]

I Am Speaking At Real Estate Connect NYC '08

Apologies to the non-real estate and/or mortgage professionals in the crowd, but this post may not interest you... If you live in New York, or close to the Acela tracks, consider attending the Inman Real Estate Connect NYC '08. The three-day event is hosted by the Marriott Marquis and begins Wednesday, January 9, 2008. The conference schedule is packed with amazing speakers and real estate-related content but the real learning happens outside of the planned sessions and in the hallways....

Read More...

[Source: The Mortgage Reports Blog]

Podcast: Foreign Buyers Use Weak Dollar To Boost U.S. Housing Market

I did a podcast with RealTimeTraders.com yesterday, talking about the economy as a whole and the role that Foreign National buyers are playing in the housing markets. The questions asked were broad and thoughtful: This seems to be the case of two wrongs making a right -- a weak dollar plus a housing downturn equaling increased foreign investment. Is that a good thing for the U.S. economy? Just how much of an impact will this have on the housing market...

Read More...

[Source: The Mortgage Reports Blog]

Mortgage Rates SHOULD Have Fallen Yesterday, But They Didn't

It's Thanksgiving Week and already we're seeing the effects that vacationing traders are having on markets. Out of nowhere, mortgage bonds rallied late yesterday, pushing mortgage bond yields downward in the last hour before the market closed. Typically, mortgage rates will mirror the yields of mortgage bonds, dropping when yields drop and rising when yields rise. Yesterday? No such luck. Ever protecting their profits, mortgage lenders chose to ignore the rally and many held their respective mortgage rates unchanged. This...

Read More...

[Source: The Mortgage Reports Blog]

Bankrate.com Mortgage Trend Index (November 15, 2007)

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available. Note: the survey only covers conforming loans. If you are a jumbo, Alt-A, or sub-prime mortgage holder, the survey is not for you. If that's the case, email or call me and we can talk about the specifics of your situation. Anyway, on to the group's predictions for the next 30-45 days: 16% of participants predict rates will increase 25% of...

Read More...

[Source: The Mortgage Reports Blog]

No Surprise : Foreclosure Rates Seem To Trend With Real Estate Speculation and Regional Job Losses

RealtyTrac published its Q3 2007 foreclosure statistics today and the data paints an interesting picture about the nature of home loan defaults. Of the Top 10 MSAs in terms of Foreclosures Per Household, eight represent areas in which real estate speculation was rampant in 2002-2006, and two represent areas whose local economies have been decimated by job loss. In other words, when it comes to mortgage defaults, sub-prime loans may be a symptom, but they're certainly not the cause. If...

Read More...

[Source: The Mortgage Reports Blog]

Why Economists Ignore Gas And Food Prices When Doing The Math For "Cost Of Living"

Yesterday's Consumer Price Index showed a year-over-over increase of 3.5 percent in the Cost of Living. Markets, however, are rejoicing over the "core" inflation rate of 2.2 percent, saying it's tolerable. So what is "core CPI", you want to know. Well, core CPI is just like "regular" CPI except that it specifically excludes the prices of energy and food products because their respective prices can change so rapidly. Volatilility distorts trends and charts, so when looking at CPI, economists tend...

Read More...

[Source: The Mortgage Reports Blog]

Scary News For Mortgage Rates -- This Time The News Comes From China

The dollar is getting trounced today on word from China that the nation is favoring "stronger currencies over weaker ones". This opens the door for China to dump U.S. dollars into the open market, further eroding the dollar's value. So why does this matter to American homeowners? Mortgage rates are based on the price of mortgage bonds. And mortgage bonds are priced in U.S. dollars. So, as the dollar gets weak, the value of mortgage bonds gets weak, too. Lower...

Read More...

[Source: The Mortgage Reports Blog]

Foreign National Buyers Could Provide Support To Housing Market

The combination of a weak U.S. dollar and growing supply of real estate is attracting international buyers to the U.S. market. Today, the Associated Press ran a story on it. Not surprisingly, the International Herald Tribune was first to print. Regular readers know this is a topic I cover fairly regularly, but if you're a first-time visitor and you have an interest in Foreign National mortgages, consider subscribing to this blog via email. Every day, I use this blog to...

Read More...

[Source: The Mortgage Reports Blog]