Well not a good rate for the faint at heart, rates have swung almost .25 of a point this week, very volatile.
Wednesday we lost a .25 in interest rates, and lenders couldn’t get rate changes out fast enough.
Today we have gained back .125, so for the week, looks like we last about .125 of rate, although Government rates are still in the 3.75% range.
So what the heck happened?
-Wednesday, GDP came out for 2nd quarter, 1st quarter was revised to a -2.1%, which was really bad, but 2nd quarter came in at 4.0%, which is HUGE.
-Federal Reserve also kept on track to taper off QE3, they are only buying $5B of Mortgage Bonds, down from their high of $40B, and based on this, next month, they will be out of the Mortgage Bond buying, which means mortgage rates will fluctuate based on market conditions, and not Government subsidies.
-Fed also indicated that inflation grew a little, and bonds HATE inflation.
-ADP private payroll came in at 218,000 vs est. of 230,000, lower than expected, but still a lot of jobs.
Thursday was kind of a lull;
-Jobless claims 302k vs est of 301K (but watch this number, dipping into the 200K will be hugely positive for the economy and bad for rates)
-Chicago PMI, 52.6 vs est. of 63, pretty big miss, positive for rates.
-Unemployment 209K vs est. of 233K new jobs, and last month was revised from 298K down to 288K.
-Unemployment 6.2% vs est. of 6.1%
Lots of swings in rates this week, like I indicated over all rates worsened this week.
Not much coming out of overseas, Russia/Ukraine, Israel & Iraq have all been played out, so not too much affect on bonds there.
Economic news was a mixed bag this week, but the trend is for rates to start going up, the unemployment numbers, although not meeting expectation, are still good numbers and because we have had 3 really good months of numbers trending, bond traders are going to look more and more into these, thus causing rates to potentially go up.
That, along with the Fed finally getting out of QE3, sometime next month, will also trend rates higher.
But really how much higher, that is a million dollar question. I am thinking a steady trend up, with 2 areas that could swing it more. 1-Geopolitical stuff, i.e. Russia, Israel, etc.. 2-Inflation, this is starting to get some traction in the media. If we start to see inflation creep its ugly head, we will start to see rates jump, A LOT.
Lock them at these lows.
And the Coutdown Begins
364 more days until the new Good Faith Estimate and Truth in Lending is released, lots of info coming in the next year, pretty good shift in our industry.
I have links to them here:
New 2015 Good Faith Estimate
New 2015 Closing statement
Also, FYI, the closing statement, with out any changes need to be given to the borrower 3 business days BEFORE they can sign ANY documents.
And if something changes, they have ANOTHER 3 DAYS to review the statement.
More info and training will be coming, I will keep you posted!
Have you sent all of your existing clients a letter or post card, reminding them to:
-Change their Air Filters
-Change their batteries in their Fire Alarms
-Change their Water Filters