The market was surprised by these numbers, which were much more healthy than expected. Expectations were an unemployment rate of 8.5% and 155,000 new jobs added.

How Does This Affect Mortgage Rates?

This report is the latest in a trend indicating the economy is on the mend. As the economy becomes stronger, we will likely see rates and home prices go higher and today is no exception as mortgage rates have gone up today.

Since we’ve put in a good number of weeks at or around all time historical lows, we’ve put in a bottom of sorts. The longer we stay near this bottom, the more it becomes a place of support, from a technical point of view.

Should I Lock My Rate Now? Where Is the Market Going Next?

We don’t know where the market will go next, but there are a lot of signs indicating that we’re moving higher. This can change though depending on the time of day and what is going on with the US Economy and can even be affected by news coming out of Europe.

We can give you realtime rate quote updates, simply call us or request a fast rate quote. Additionally, we can give you free advice on what loan options exist and we can also put together a strategy financing your existing or new home that will give you the lowest payment possible.

Events Affecting Mortgage Rates This Week

This week will see European Union leaders meet. Any developments coming out these meetings have the potential to move mortgage rates. Specifically, bad news may result rates going lower and good new will likely push rates higher. This occurs because bad news means investors move their money away from stocks (stock markets go down) and put it into bonds, which typically means mortgage rates decrease.

The other big event is non-farm payrolls, otherwise known as the Jobs Report that is being released on Friday. Since jobs are a key component of economic health for the country, these numbers can move mortgage rates on a dime.

Negative news out of Europe and disappointing news with the Jobs Report could sent mortgage rates to new all time historical lows. Positive news from these events could signal a change in the current trend and start the beginning of mortgage rates moving off of the current lows.

Economic Calendar for Week of January 30, 2012

• Monday - Personal Income & Outlays,
• Tuesday - S&P Case-Schiller, Chicago PMI, Consumer Confidence
• Wednesday - ADP Employment Report, ISM Mfg Index, Construction Spending
• Thursday - Jobless Claims, Productivity & Costs,
• Friday - Employment Situation: Non-Farm Payrolls, Factory Orders

Should I lock My Mortgage Rate Now or Wait?

Right now may very well be one of the best times in history to lock in a historically low mortgage rates. But wait, what if you’re not sure what size loan you qualify for or what program is right for you? We can help educated you, free of charge, about what loan programs are available and which one will help fit your needs the best. We can also put together a common sense purchase or refinance strategy that fits your unique needs. If you have questions this help is only a phone call away!

In a press release,  the FOMC announced it’s thoughts on the state of the economy today and moving forward in addition to its plans for future monetary policy. The equities and bond markets pay close attention to the statements that come out of FOMC meetings as monetary policy as set by the FOMC can significantly impact our economy and the economies around the world.

The FOMC: Extends Exceptionally Low Levels for the Federal Funds Rate at Least Through Late 2014

The FOMC made several statements that have sent mortgage rates back to all time historical lows.

1. The committee extended its “forward guidance” on interest rates stating that “economic conditions” are likely to “warrant exceptionally low levels for the federal funds rate at least through late 2014”.
2. Current economic conditions: Described as “expanding moderately”. This means that conditions are essentially unchanged, the key point being that they have not worsened, which is good.
3. The committee “expects to maintain a highly accommodate stance for monetary policy.” This tells the markets that they’re still willing and able to take measures in the future, especially in relation to inflation, which is good. This is as opposed to stepping aside and letting the market play out, which can be bad if the market can in fact, improve with some monetary intervention.

From the FOMC Press Release:

To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

How The Fed’s Statements Affect You and Your Mortgage

Immediately after hearing the FOMC’s statement, mortgage rates fell back down to the all time historical lows they were at last week. This latest development is only the latest in a series of events over the past few months where mortgage rates have been at all time historical lows or set new lows. The unprecedented window is a very unique opportunity to get into a mortgage at the lowest rates we have seen in our lifetime.

We can help you understand how much you qualify for if you are purchasing a new home and help you understand what mortgage best fits your needs. We only need a few minutes with no obligation to put together a strategy that best fits your financial needs and goals for your home purchase or refinance of your existing loan.

Summary of Last Week’s Positive Economic News: 

• Single Family Housing Starts: Up 4.4% over November
• Existing Home Sales: Rose 5.0%, rising for third consecutive month
• Jobs: Jobless claims hit lowest level since April 2008

The Week Ahead: FOMC Meeting and GDP

The two items with the most potential to move mortgage rates are the FOMC (Federal Open Market Committee) press conference on Wednesday and the release of GDP data on Friday.

The tone and remarks coming from the FOMC can help investors understand where the FOMC’s position on where the economy is, where they believe it is going and what type of actions, if any, they expect to be taking in the future. The market can turn on a dime for better or worse on nothing more than one unexpected statement from Fed Chairman Bernanke or other FOMC members. The market will be watching the FOMC and GDP numbers closely.

Economic Calendar for Week of January 23, 2012

• Monday - none
• Tuesday - none
• Wednesday - Petroleum Status Report, FOMC Press Conference
• Thursday - Durable Goods Orders, Jobless Claims, New Home Sales
• Friday - GDP, Consumer Sentiment

There are some important pieces of data being released later in the week, but overall this is a light week for data that could move mortgage rates with Tuesday being the lightest day for data.

On Wednesday the PPI (Producer Price Index)  and Industrial Production data will be released and have the ability to affect mortgage rates. On Thursday, the CPI (Consumer Price Index) and Housing Starts are being released. Finally, on Friday, the Existing Home Sales data, released by the NAR (National Association of Realtors) will be watched by the market as well.

Economic Calendar for Week of January 16, 2012

• Monday - Martin Luther King Holiday Observed
• Tuesday - Empire State Mfg Survey
• Wednesday - Producer Price Index, Treasury International Capital, Industrial Production, Housing Market Index
• Thursday - Consumer Price Index, Housing Starts, Jobless Claims, Philadelphia Fed Survey,
• Friday - Existing Home Sales

Rates Are At or Near Record Lows, What Does This Mean For Me?

The truth is that it depends. It depends on your current needs, goals and plans for your current or future mortgage. If you are looking to refinance your existing mortgage or purchase a new home, we can help you understand what programs best fit your needs and help you decide if locking in a low rate is the best option for you. We can give you this guidance free of charge, so please do not hesitate to call us directly or request a rate quote on this site.

Paying Down Your Mortgage

1. Pay your Mortgage More Than Once Per Month – Setting up a bi-weekly or weekly payment schedule can help you pay of your mortgage many times faster than by making a standard monthly payment. If you pay bi-weekly, you end up paying one or two extra mortgage payments per year which automatically reduces your amortization period.
2. Increase Your payments When You Have More Money Coming In – Instead of using additional funds from a raise or bonus at work for something else, put it towards your mortgage every time you make a payment.
3. Get a Reasonable Interest Rate – It goes without saying that it is important that you do your due diligence when shopping for a mortgage. While rate is only one of the factors to consider when choosing a mortgage professional, it is important that you choose your mortgage professional and rate carefully.
4. Consider an Adjustable Rate Mortgage – While an adjustable rate mortgage may not offer the security of an unchanging mortgage payment, it can provide for a smaller rate and payment due than a fixed rate mortgage. This lower rate / payment will enable you to make larger payments towards the principal, which can help you pay off your mortgage significantly faster. Keep in mind that an adjustable rate mortgage may or not make the most sense for your needs, we can help you understand the options and which ones fit your needs the best.

If you abide by some of the above strategies, it may be possible to pay off your mortgage up to a decade earlier. Not having to pay substantial housing costs later in life can help ease a major financial burden and can free up money for retirement, college education for the kids, investments or other financial needs.

Some Fed members are speaking as well and the market is always listening for good or bad updates from Europe.

Economic Calendar for Week of January 9, 2012

• Monday - Consumer Credit
• Tuesday - Wholesale Trade
• Wednesday - EIA Petroleum Status Report, Beige Book
• Thursday - Jobless Claims, Retail Sales, Treasury Budget
• Friday - International Trade, Consumer Sentiment, Import & Export Prices

Should I Lock Now or Wait?

Since mortgage rates are very close to their all time historical lows, there is likely much more to gain by locking now then by waiting. It only takes one piece of news to push rates up and when they move up, they move much faster than they move down. That being said, the market may have changed by the time you’ve read this, so calling us is the most sure way to get the most up to the date guidance in whether locking makes sense for you and what loan program best fits your needs.

There are several economic reports being released this week with the ability to change mortgages rates, with the GDP and Jobless Claims data being released later in the week.

Trading Volume, Volatility and Your Mortgage Rate in the Week Ahead

The markets will likely be quiet as we move into the final weeks of the Holiday Season, but low trading volume in the Equity and Bond markets can lead to volatility. Since we are at all time historical lows, waiting through the next few weeks may be risky. If you need help deciding if a rate lock is the best move for your needs, we can help.

Economic Calendar for Week of December 19, 2011

• Monday - Housing Market Index
• Tuesday - Housing Starts
• Wednesday - Existing Home Sales
• Thursday - GDP, Jobless Claims, Consumer Sentiment
• Friday - Durable Goods Orders, Personal Income and Outlays, New Home Sales

The Federal Open Market Committee (FOMC) Meets

The Federal Open Market Committee (FOMC) met this week and as expected, they left key short term interest rates alone. The Fed Funds Rate (the rate at which banks lend money to each other) is still at 0.000% to 0.250%. The committee has said it believes the economy is growing moderately and that employment will continue to improve, albeit at a slower than desirable pace.

The FOMC also indicated that there are some areas of concern that might affect the US Economy moving forward such as slowing in global growth and concerns in business investment.

Mortgage Rates Moving Forward

Will rates be higher or lower next week? The truth is that nobody knows. We do know that since we are at all time historic lows, there is limited upside in waiting for rates to improve. On the other hand, there is substantial risk that rates will move higher if you wait.

Should you lock now? What is the best program for your needs? We can answer these questions and more with a free consultation where we can put together a strategy to that best fits your unique needs.

Putting Mortgage Rates Into Perspective

Since it is quite easy to hear how low mortgage rates are but not understand how low they are in a historical context, we have been hard at work creating some charts that we will be releasing in the coming weeks documenting the history of mortgage rates. Sometimes it take a chart to truly understand how low and historic the mortgage market we are in is.

Economic Calendar for Week of December 12, 2011

• Monday - Treasury Budget
• Tuesday - Retail Sales, Business Inventories, FOMC Meeting Announcement
• Wednesday - Import and Export Prices
• Thursday - Jobless Claims, Producer Price Index, Industrial Production, Philadelphia Fed Survey

Mortgage Rates and the Best Program For Your Needs

We commonly speak with homeowners that are confused about which program is best for them or what size loan they qualify for. We also find that many are confused about rate locks and when and if they should lock in their mortgage rate.

If you need a free professional consultation to put together a mortgage strategy that fits your needs the best, we can help. Now is a critical time to learn about your options if you are on the fence or unsure about what move, if any, you should make in regards to refinancing your existing or locking in a rate for a new mortgage. Mortgage rates are at historical all time lows, don’t miss the opportunity to take advantage of this unique market!