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JonathanWhite

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton,MA02459

Europe Influences U.S. Markets

Over the past week, mortgage rates were influenced mainly by events in Europe. The outcome of Sunday's French election was bad for mortgage rates, while Thursday's European Central Bank meeting was mildly positive. The U.S. economic data had little impact. Mortgage rates ended the week a little higher.

One pro-EU candidate (Macron) and one anti-EU candidate (Le Pen) won the first round of Sunday's French Presidential election and will compete in the second round on May 7. Polls indicate that Macron is heavily favored to win the second round, which reduces some concerns that France will leave the European Union. Investors reacted by reversing the flight to safety trade which took place ahead of the election. This means that they shifted back to riskier assets such as stocks and out of safer assets such as mortgage-backed securities (MBS). The increased supply of MBS caused mortgage rates to rise.

At Thursday's meeting, the European Central Bank (ECB) made no policy changes, as widely expected. The tone of ECB President Draghi was more dovish than anticipated, however. Some investors had worried that ECB officials might hint at a reduction in bond purchases by the ECB. The fact that they did not was good news for mortgage rates.

The first reading for first quarter U.S. gross domestic product (GDP) released on Friday was 0.7%, below the consensus of 1.1%, and down from 2.1% in the fourth quarter of 2016. This was the slowest quarterly growth in three years. Weak consumer spending and a decline in inventories were a couple of the primary factors in the shortfall.

These components are volatile on a quarterly basis, and many economists believe that the weakness in the first quarter simply pushed some economic activity into later quarters. As a result, the report had little impact on mortgage rates.

Looking ahead, it will be a packed week. The next Fed meeting will take place on Wednesday. No change in rates is expected, but investors will be eager for guidance on the pace of future tightening. The key monthly Employment report will be released on Friday. Before that, important data on inflation, manufacturing, and services will be released. In addition, news about policies from the Trump administration or about the French election on May 7 could influence mortgage rates.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Posted in:mortgages and tagged: mortgages
Posted by Jonathan White on April 28th, 2017 1:47 PM

Compliments of

JonathanWhite

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton,MA02459

Home Sales Rise

The economic data released this week had little impact on mortgage rates. Tuesday's Bank of Japan meeting also caused little reaction in U.S. markets. Mortgage rates ended the week lower.

While it had little market impact, Wednesday's report on sales of previously owned homes exceeded expectations and reached another multi-year high. November existing home sales increased a little from October to the highest level since February 2007. Existing home sales were 15% higher than a year ago.

This figure is inflated somewhat, though, since sales in November of last year were depressed by the implementation of new closing disclosure requirements. Total inventory of existing homes available for sale fell to a 4-month supply, and it was 9% lower than a year ago. The median existing-home price was 7% higher than a year ago. Since sales of previously owned homes measure closings, the November data was not affected much by the increase in mortgage rates seen since the election.

Thursday's report on orders for durable goods contained mixed news. Durable goods are products which are expected to last more than three years. The overall figure revealed that orders for durable goods in November declined 4.6% from October, which was close to the expected levels. The decline was mostly due to a drop in aircraft orders. Since certain products such as aircraft tend to be very volatile from month to month, investors generally prefer to look at a core reading to get a better sense of the underlying trend. This core indicator of business investment, nondefense capital goods excluding aircraft, showed a healthy increase of 0.9% from October.

Looking ahead, it will be a light week for economic data. Pending Home Sales will come out on Wednesday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. During the last couple of weeks in December, trading volume tends to be lighter than usual, which can lead to exaggerated price swings. Mortgage markets will be closed on Monday in observance of Christmas.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Posted by Jonathan White on December 22nd, 2016 3:48 PM

Compliments of

JonathanWhite

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton,MA02459

Fed Projects Faster Pace of Hikes

Wednesday's Fed meeting turned out to be negative for mortgage rates. Recent economic data had little impact. As a result, mortgage rates ended the week higher.

As widely expected, the Fed raised the federal funds rate by 25 basis points. Unfortunately for MBS, Fed officials also raised their outlook for the pace of future rate hikes. They now forecast three rate hikes in 2017, one more than previously projected. The faster pace was viewed as negative for mortgage rates. But why? The purpose for raising the federal funds rate is to keep inflation from rising above the Fed's target of 2%. This should be a good thing for mortgage rates.

Part of the reason for the adverse reaction stems from a more direct effect the Fed has on mortgage rates. The Fed owns over $1.7 trillion of the agency mortgage-backed securities (MBS) that it purchased during its quantitative easing (QE) days. The Fed keeps the balance of MBS around that level by buying new MBS to replace that which pays off. The Fed is currently the buyer of approximately 25%of all newly issued MBS. This added demand from the Fed drives MBS prices higher and mortgage rates lower. The Fed says that it will not allow its holdings of MBS to decline until "normalization of the level of the federal funds rate is well under way." When that will be is hard to say, but the faster they raise the federal funds rate, the sooner their demand for new MBS will be removed.

On Thursday, the December National Association of Home Builders (NAHB) housing index showed that home builder confidence jumped from 63 to 70, far above the consensus, and the highest level since 2005. According to the NAHB, home builders are optimistic that the Trump administration will "reduce costly regulatory burdens."

Looking ahead, there will be a meeting of the Bank of Japan on Tuesday which could influence U.S. mortgage rates. In the U.S., Existing Home Sales will be released on Wednesday. Durable Orders and Core PCE will come out on Thursday. Core PCE is the inflation indicator favored by the Fed. New Home Sales will be released on Friday. Mortgage markets will close early on Friday in observance of Christmas.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Posted by Jonathan White on December 16th, 2016 12:16 PM

Compliments of

JonathanWhite

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton,MA02459

Volatile Week

It was a volatile week for mortgage rates. A wide range of factors, including Italian politics, OPEC, and U.S. economic data, caused significant reactions. The net effect was small, however, and mortgage rates ended the week with little change.

On Sunday, Italians will vote on a referendum presented by Prime Minister Matteo Renzi. If successful, the referendum would simplify the process in Italy for passing laws. The most recent polls suggest that it may be a very close vote. If the referendum fails to pass, critical reforms for the Italian banking sector likely would be postponed. This would put some banks in Italy and in other European countries at risk of failing. In addition, Renzi has said that he will step down if the referendum fails. This would likely lead to a period of political uncertainty in Italy. Early in the week, investors began to noticeably react to the uncertainty by shifting to safer assets, including U.S. mortgage-backed securities (MBS), which was good for mortgage rates.

On Wednesday, however, OPEC representatives announced an agreement to cut oil production. This caused oil prices to surge over 9%. Since higher oil prices raise the outlook for future inflation, this was negative for mortgage rates. The increase in rates on Wednesday more than offset the improvement seen earlier in the week.

In contrast to the OPEC news, a shortfall on wage gains in Friday's key Employment report reduced inflationary pressures, which was positive for mortgage rates. In November, average hourly earnings were far below the consensus with a small decline from October. They were 2.5% higher than a year ago, down from the multi-year high of 2.8% last month.

Job growth was right on target. Against a consensus forecast of 170K, the economy added 178K jobs in November. The unemployment rate declined from 4.9% to 4.6%, well below the consensus for a flat reading, and the lowest level since August 2007. The unexpected decline in the unemployment rate was mostly due to workers leaving the labor force, however, which is not positive news for the economy.

Looking ahead, the Italian vote will take place on Sunday, and the results likely will affect U.S. mortgage rates on Monday. After that, the next big event will be the European Central Bank (ECB) meeting on Thursday. Investors are divided about what the ECB will decide. In the U.S., the most significant economic report will be ISM Services on Monday. The next U.S. Fed meeting will take place on December 14.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Posted in:mortgages and tagged: mortgages
Posted by Jonathan White on December 2nd, 2016 12:39 PM

Compliments of

JonathanWhite

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton,MA02459

Another Rough Week

It has been another rough week for mortgage rates. Volatility has been high. The market action was driven almost entirely by expected policy changes under the Trump administration. Mortgage rates rose during the week to the highest levels of the year.

Investors expect that the policy changes under a Trump administration will be good for stocks and negative for bonds. Expectations of greater fiscal stimulus are good for stocks, but they also raise the outlook for future inflation. This is bad for bonds because investors judge the value of bonds based on their future cash flow. An increase in inflation reduces the value of future cash flows, so investors demand a higher yield when the outlook for inflation rises. Since mortgage rates are set based on the value of mortgage-backed securities (MBS), higher yields for MBS lead to higher mortgage rates.

While it had little market impact, the report on housing starts was very encouraging. In October, total housing starts rose a massive 26% from September to an annual rate of 1.32 million, far above the consensus of just 1.17 million, and the fastest pace since August 2007.

Strong gains were seen in both single-family and multi-family units. Single-family starts, which make up about 60% of the market, increased 11% to the highest level since October 2007. Building permits for single-family homes also rose in October, which is a positive sign for future activity.

Looking ahead, new information about the plans of the Trump administration likely will continue to influence mortgage rates. In addition, Existing Home Sales will be released on Tuesday. New Home Sales and Durable Orders will come out on Wednesday. The minutes from the November 2 Fed meeting also will come out on Wednesday. These detailed minutes provide additional insight into the debate between Fed officials. The minutes are not likely to change investor expectations for a rate hike at the next Fed meeting on December 14. Mortgage markets will be closed on Thursday for Thanksgiving.

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

Posted in:mortgages and tagged: mortgages
Posted by Jonathan White on November 18th, 2016 12:56 PM

You scour the market for the perfect home, but you should be just as diligent when shopping for the right loan.

 

Interviewing the actual person handling your loan is one of many tips to find best deal in mortgage. http://proi.me/1darY6K

Posted by Jonathan White on March 9th, 2016 10:35 PM

 

Compliments of

Jonathan White

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton, MA 02459

     

 

Data Exceeds Expectations 

 

The major U.S. economic data released over the past week was stronger than expected. Upside surprises were seen in GDP, durable orders, housing, and inflation. The impact on mortgage rates was small, however, and rates ended the week just a little higher. 

 

The Core PCE price index is the monthly inflation indicator preferred by the Fed, and the readings for January showed that inflation is rising more quickly than expected. Last week's CPI inflation report contained a similar message. 

 

Core PCE, which excludes the volatile food and energy components, was 1.7% higher than a year ago, up from 1.3% just two months ago, and the highest level since February 2013. Low levels of inflation have helped keep mortgage rates low. If the trend toward higher inflation continues, it would be negative for mortgage rates. 

 

The housing data released over the past week was mixed, but the much more significant report was encouraging. January existing home sales, which make up about 90% of all home sales, increased to near the best level in seven years. They were 11% higher than a year ago. New home sales, which make up the rest of the market, declined in January. Low mortgage rates and solid job gains are having a nice effect on home sales. 

 

Fourth quarter GDP was revised higher from 0.7% to 1.0%, above the consensus for a decline to 0.4%. GDP, the broadest measure of economic activity, recently has been volatile from quarter to quarter. The consensus is that 2016 will start on a better note. First quarter GDP growth is expected to rise to 2.0%, well above the levels seen during the first quarters of 2014 and 2015. 

 

 

Looking ahead, the important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, Pending Home Sales will be released on Monday. The ISM national manufacturing index will come out on Tuesday, and the ISM national services index will come out on Thursday.

 

 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

 

 

 

Posted by Jonathan White on February 26th, 2016 4:20 PM

 

Compliments of

Jonathan White

President and CEO
Mortgage Broker | NMLS ID: 3443

Blue Door Mortgage, LLC

NMLS: 2218

Call: 617.527.BLUE (2583)

jwhiteloan@bluedoormortgage.com
www.bluedoormortgage.com

1280 Centre Street

Newton, MA 02459

     

 

Higher Inflation 

 

Mortgage rates spiked higher late last week, as investors bought stocks and sold bonds. The volatility continued this week, but the net effect was favorable for mortgage rates. Despite an upside surprise in the CPI inflation data and stock market gains, mortgage rates ended the week a little lower. 

 

The Consumer Price Index (CPI) is the most widely followed monthly inflation indicator, and the readings for January were higher than expected. CPI was 1.4% higher than a year ago, which was the highest level since October 2014. 

 

Core CPI, which excludes the volatile food and energy components, was 2.2% higher than a year ago, which was the highest level since June 2012. Economists often look at core inflation rather than the overall rate to get a clearer sense of the underlying trend. 

 

While some forces have helped hold down inflation over the past year, including the stronger dollar and lower oil prices, the service sector has remained strong and costs have been rising. In particular, shelter and medical costs have increased over the past year. Mortgage rates are highly influenced by the outlook for future inflation. If the trend toward higher inflation accelerates, it would be negative for mortgage rates. 

 

 

Looking ahead, Existing Home Sales will be released on Tuesday and New Home Sales on Wednesday. Durable Orders, an important indicator of economic activity, will come out on Thursday. The Core PCE price index, the Fed's preferred inflation indicator, and the second estimate of fourth quarter GDP will be released on Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday. 

 

 

All material Copyright © Ress No. 1, LTD (DBA MBSQuoteline) and may not be reproduced without permission.

 

 

 

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Posted in:mortgages and tagged: mortgages
Posted by Jonathan White on February 19th, 2016 3:00 PM
Experts reveal the biggest hurdles in the mortgage process http://ow.ly/zgXVb via @RealSimple
Posted by Jonathan White on January 22nd, 2016 5:14 PM

Mortgage basics Q & A

http://ow.ly/zxGCK

Posted by Jonathan White on November 20th, 2015 4:36 PM

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