Huge news day with all key data summarized (including charts) in today’s Fundamentals report. Despite rising jobless claims and contracting manufacturing activity, rates are up today for 3 main reasons: (1) Consumer inflation is higher. Rates rise when mortgage bonds sell, and they’re selling today partly because consumer inflation is higher. Inflation makes the future
Philly Fed
Consumer Inflation -CPI Month/Month: +0.5% -CPI Year/Year: +3.6% -Core CPI Month/Month (less food & energy): +0.2% -Core CPI Year/Year (less food & energy): +1.8% -This retail inflation is always difficult to explain because while it is most certainly the overall number which affects everyone, it is core which is of interest to economists because core
Initial Jobless Claims -418,000 week ended July 16, the 16th week above 400k -Up 10k from previous week’s revised 408,000 -4-week moving average 421,250 -Down 2,750 from the previous week’s revised average of 424,000 -This is a chart of Initial Jobless Claims since March 2009 -See colored line showing that we got below 400,000 in
Housing: -May Starts 560,000 (annualized), up 3.5% from April, above 540k expected. -May Permits 612,000 (annualized), up 8.7% from April, most in 2011. -We need about 1,500,000 Housing Starts a year to keep pace with population growth and units scrapped to disaster or obsolescence. Jobs: -414,000 for week ended June 11, down 16,000 from previous
After a four week rally that set new 2011 lows, rates are up slightly on net mortgage bond selling since yesterday. Bond yields (or rates) are now back up to the previous 2011 low level set March 16 after the Japanese earthquake and ‘not-a-war’ in Libya reached peak panic levels. Rates drop when bond prices
The nuclear meltdown situation in Japan is no less dire today as helicopters and water cannons are now being used to cool fuel rods and prevent spreading of radioactive material, but after utter market panic yesterday caused stocks and rates to drop, they’ve now reversed course almost entirely (Dow +166, S&P +21, and FNMA 30yr
Rates improved a bit yesterday and gave up ground today, making 30yr fixed rates on loans up to $417k hold at 5%, with higher loan amounts and condo loans about .125% to .25% higher. Rates improved yesterday after Housing Starts fell as expected and Building Permits rose almost 17%, then retreated a bit today after
The rate climb discussed in recent weeks continues with Conforming 30yr fixed rates .75% higher than all-time lows October 7-8. This means a $184/mo higher mortgage payment for a loan of $417,000, and $323/mo higher for a loan of $729,750. Rates for Jumbo loans above $729,750 are only up .25% because these loans are not
Yesterday’s inflation data helped rates drop about .25% since rising about .375% off lows set ahead of the Fed’s quantitative easing announcement. But today’s much stronger than expected Philly Fed number of 22.5 has caused a sharp 75 basis point mortgage selloff, pushing rates back up about .25%. Philly Fed went from 1 on October
Wells Fargo Bad Loan Repurchases Fell In 3Q Yesterday we learned that Wells Fargo’s repurchase obligations fell in the third quarter. Wells Fargo, who has not stopped foreclosure processes, reduced its reserve for repurchases to $1.3 billion from $1.4 billion in the second quarter, and outstanding buyback requests fell to $3.8 billion of loans from
Don’t forget Sunday is Talk Like A Pirate Day. Here’s another joke to celebrate the occasion and a couple more below. A pirate with an eye patch seemed sad at a bar. The bartender asked, “What’s wrong?” The pirate replied, “Arrrgh, they wanted me to be a teacher – but I only had one pupil!”
Lawmakers Solicit Consumer Comments On 7 Financial & Housing Reform Topics Do you want some input in financial reform? There are many ways to do this, and here is another. The public will have the opportunity to submit written responses to seven questions that will be published in the federal register online at www.regulations.gov. The
In Favor Of Bank Tax Yesterday I noted a few comments by Warren B. about the tax on banks. In an effort to give equal time, many feel that a bank tax is fine. They say that because the government is already giving the banks money at 0% and the banks are buying treasuries and
Mortgage Banker Average Pay Is your company making more or less than $902 on each loan? The MBAA reports that independent mortgage bankers made about 50 basis points, or $902, on average, during the third quarter. This is down from the $1,358 profit during the second quarter. The lenders which make up the MBAA’s study
One top ex-secondary guy wrote to me and said, “Things I sort of miss hearing in mortgage banking: “What are rates gonna do tomorrow?” “Why is IndyMac a point better than we are?” Anything associated with “Did you hear what they said on CNBC this morning…….?” “How come I’m losing money on the hedge?” And
House Passes 90% Bonus Tax The House of Representatives passed a quick bill which places a 90% tax on the AIG bonuses, after the US taxpayer, in effect, paid for AIG’s gambling losses, and on bonuses received by the employee of any company that receives more than $5 billion in TARP money. Unfortunately for any
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