Mortgage Rate Update

The MARK Z. Home Selling Team finished number 81 in the country out of 2 Million plus Realtors on the "Top 250 Teams by Transaction Sides List" for 2011. The Wall Street Journal and Real Trends Inc. anncounced the top 1,000 real estate agents and teams for 2011 in the United States. Teams and Agents were ranked based on the total number of closed transactions in 2010. I wanted to congratulate my team on a very successful year in a very challenging real estate market. 

We are starting to see the market turn for the positive. Although we are seeing home prices increase in certain communities, we are still having appraisal issues on many houses. Foreclosure inventory is very scarse and when one does pop up on the scene more times than not, it is a…

Mortgage Bonds have opened a little lower this morning, even after a slightly worse than expected Initial Jobless Claims report. 

Since August 7th, Mortgage Bonds have gained 281bp…so ahead of today’s Treasury Auction annoucement and tomorrow’s Jobs Report, it’s not unusual to see a little profit taking as Traders exercise a bit of caution.   

At 11:00am ET, the Treasury will announce the size of next week’s auction of 3 and 10-year Notes and 30-year Bonds.  This will be an important auction, as the longer term maturities compete against Mortgage Bonds for investor dollars.  Therefore, the announcement at 11:00am ET on the size of next week’s supply could shake things up.  Some of the previous Treasury announcements have caused significant…

Mortgage Bonds are trading modestly higher and nicely above former resistance at the 100 and 200-day Moving Averages.  

The latest move higher has been helped by the pullback in Stocks.  As you might recall in Monday's Update, we talked about the Stock market being set up for a correction and Mortgage Bonds being the beneficiary, which could help them power through resistance.  Since that time, the Dow has lost about 250 points, while Mortgage Bonds have gained 60bp and broken above resistance.

On the news front was a worse than expected ADP Employment report, which showed 298,000 jobs lost, a bit worse than estimates of 250,000 jobs lost.  This report comes ahead of Friday's closely watched and potentially market moving, official Jobs…

Mortgage Bonds are trading lower – but improved from their worst levels – on the heels of better than anticipated housing and manufacturing news. 

Pending Home Sales for July increased by 3.2%, more than double the expectations of 1.5%, and representing the sixth consecutive monthly gain…the longest streak on record.  While it’s nice to finally hear some positive news about the housing sector – let’s remain cautious in our optimism, as many first time homebuyers moved up their home purchasing plans to take advantage of the tax credit.  This temporary stimulus may mean a corresponding dip in Home Sales data once the credit expires.  That said – combined with still historically low rates, this report is a great talking point to help more of those first…

Mortgage Bonds are starting the week slightly higher, but prices are again battling tough overhead resistance at the 100 and 200-day Moving Averages, as well as the Falling Trendline.  A look at the chart shows how this ceiling has stopped prices from advancing much higher over the past twelve trading days.

The manufacturing sector measuring Chicago Purchasing Managers Index (PMI) came in right at 50, quite a bit better than last month’s read of 43.4.  And interestingly enough, a reading above 50 indicates expansion, while a reading below 50 indicates contraction.  This is a fairly positive sign for the beleaguered manufacturing sector, and sets up the more closely watched national manufacturing number due tomorrow, via the Institute of Supply Managers…

Mortgage Bonds are near unchanged, but markedly improved from the worst levels seen early this morning.  Bonds continue to trade in a tight range between tough resistance at the 100-day Moving Average and underlying support at the 25 and 50-day Moving Averages.  

Stocks had an early boost this morning on news that bellwether Intel raised their future earnings target, as well as good earnings reports from Dell and upscale retailer Tiffany & Co.  The Dow has now closed in positive territory for eight consecutive days, for the first time since April of 2007.  Stocks are due for a pullback and when that happens Bonds should see some benefit.   

Inflation remained tame last month, as the Federal Reserve's preferred inflation gauge, the Core Personal…

Rep. Howard Coble (R-NC) has submitted to the House for consideration HOME (Home Ownership Moves the Economy) Act of 2009.  At this point it has been referred to the House Ways & Means Committee. (Aug. 26, 2009)

To keep up on the purposed Act, click on the following link.

www.govtrack.us/congress/billtext,xpd?bill=h111-2801

These are the finer points of the Act.

1. All Home Buyers buying their primary residence would be able to take advantage of this tax credit.  Not just 1st time home owners...

2. They would still have to have the home as their primary residence for three years.  This is not for the investors out there. 

3. The limitation based on Modified Adjusted Gross income for the singles and the married filing jointly would go away. In other…

Some surprising words from Richmond Fed President Jeffrey “The Dissenter” Lacker has applied selling pressure to the entire Bond market.  Lacker commented in an interview that the Fed may not need to buy the full $1.25T in Mortgage Backed Securities authorized for purchase by year end due to signs of improvement that have recently been reported in the housing sector.  Lacker’s opinions may not be shared by the other Fed members, and let’s remember that he is known as “The Dissenter”, as his views often are different than the Fed member consensus.  But just the thought of the Fed ending their buying support of Bonds was enough to shake out some of the weaker hands this morning. 

Mortgage Bonds closed yesterday against a strong triple layer ceiling of…

Mortgage Bonds are trading near unchanged levels and once again testing a stiff ceiling of resistance at the 100 and 200-day Moving Averages, as well as a falling trendline formed by recent highs. 

Yesterday, Bond prices enjoyed a late day rally sparked by good results from the 2-year Treasury Note auction.  Foreign investors, including foreign central banks, bought up a greater than expected 49.4% share of the offerings, compared to an average of 46% during the last four auctions.  While the increase in foreign buying is good news, we should remember that this is on 2-Year Treasury securities, which have a relatively short maturity period.  Short maturities are less risky, as the longer the maturity of the security, the more interest rate risk…

Mortgage bonds are a bit lower as stocks look to open higher, after it was announced that President Obama has reappointed  Ben Bernanke as Federal Reserve Chairman to a second 4-year term.  This looks to be a smart move as financial markets finally appear to be stabilizing.  It was a little less than a year ago that the credit markets were in disarray and fears of financial collapse spread worldwide.  Although Mr. Bernanke has his critics, and he has probably exerted his influence in areas far beyond those of past Fed chairs, he has many supporters that credit him with helping the United States step towards recovery.  President Obama's reappointment of Mr. Bernanke comes amid pressure and speculation from some Democrats, who would have rather seen current…