Translate:

EN

MIG Market Watch, December 28th, 2020

MIG Market Watch, December 28th, 2020


MIG Market Watch, December 28th, 2020

MARKET COMMENT
Mortgage bond prices finished the week lower which put upward pressure on rates. Rates worsened throughout most of the week but got a slight positive rebound Thursday morning. Unfortunately, it was not enough to close the week positively. Global financial markets took a hit early Monday as reports indicated a new more dangerous variant of the coronavirus was spreading. Q3 GDP was 33.4% vs the expected 33.1%. Existing home sales were 6.69M vs 6.84M. Income fell 1.1% vs the expected 0.3% decline. Spending fell 0.4% vs 0.2%. Core PCE inflation was unchanged vs the expected 0.1% increase. Weekly jobless claims were 803K vs the expected 885K. FHFA housing was up 1.5% vs 1.7%. Sentiment was 80.7 vs 80.8. New home sales were 841K vs the expected 1M. Mortgage interest rates finished the week worse by 1/8 to 1/4 of a discount point.

LOOKING AHEAD

Economic Indicator Release Date & Time Consensus Estimate Analysis
Consumer Confidence Tuesday, Dec. 29,
10:00 am, et
88.2 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Weekly Jobless Claims Thursday, Dec. 31,
8:30 am, et
805K Important. An indication of employment. Higher claims may result in lower rates.
New Year’s Holiday Friday, Jan. 1 Important. Shortened trading week and likely thin conditions could result in volatility.

DISPARITY
The 10 and 30-year Treasury bond yields are often viewed as “benchmarks”, reflecting the overall state of interest rates in the US economy. Many people concerned about mortgage interest rates track these bonds as a barometer for mortgage interest rates. However, in reality the Treasury and mortgage markets trade independently.The supply and demand characteristics of Treasury bonds and mortgage-backed securities (MBS) differ significantly. Treasury securities represent money needed to fund the operations of the US government. MBSs, on the other hand, represent borrowing by homeowners.Information related to Treasury bonds is relatively easy to come by. Almost every major news medium reports changes. On the other hand, accurate mortgage interest rate information is difficult and costly to obtain.In the absence of information directly related to the mortgage interest rate markets, Treasury information can be useful in that the bond market generally trends in the same direction. However, mortgage interest rates can vary significantly. In fact, many times the Treasuries will trade wildly while MBS only see minor price changes and vice versa. Last Wednesday mortgage-backed securities fell 4/32 at 10 am ET pricing while the 10-year Treasury fell 11/32nds and the 30-year Treasury fell 41/32nds at that time. This is a prime example where anyone that looked solely at Treasuries thought the mortgage market worsened considerably when it only worsened a tiny bit.The data provides a valuable lesson into the differences between treasury bonds and mortgage-backed securities. This is an example of why looking solely at treasuries can mislead people. Keying in on the correct information can mean the difference between saving and losing a tremendous amount of money when making float and lock decisions. Trusted mortgage professionals have access to mortgage-backed securities data and can assist you in making wise home financing decisions.

Share

Leave a comment

Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at migonline.com Legal Information.

MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:

  • Rates are subject to change at any time.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Payments will vary based on program selection, current rates, property location, etc.
  • Not all programs are available in all states.
  • Some loan programs may not be available to first time home buyers.
  • Terms and conditions apply, which may include restrictions or limits per loan program.
  • Information is generally based on primary residence occupancy with no cash out when refinancing.
  • Unless otherwise stated, terms shown are estimates based in part on credit score of 700 or higher; owner occupancy, escrow account is established for taxes and insurance(s); debt-to-income ratio no higher than 43.0%; PMI applies to conventional loan programs over 80.0% LTV; VA,FHA & RD require insuring fees included in loan and/or payment; fixed rate, 30 year term.

An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020