Jacksonville's Home Loan and Mortgage Broker

After a brief surge north of 4 percent last month, mortgage rates have settled down, near their lowest levels of all-time.  

According to Freddie Mac’s weekly Primary Mortgage Market Survey, for applicants willing to pay 0.7 discount points plus a complete set of closing costs, the average 30-year fixed rate mortgage rate fell to 3.88 percent this week.

0.7 discount points adds $700 to your mortgage closing costs for each $100,000 borrowed.

Mortgage rates are down this week on “safe haven” buying. The move is triggered by Wall Street’s concern that Spain and Italy will have trouble servicing their respective sovereign debt. In response, investors are selling risk-heavy assets and using the proceeds to purchase U.S. government-backed bonds.

This creates demand for mortgage bonds which, in turn, pressures mortgage rates lower.

The storyline is similar to what transpired in Greece last year, and, at least for now, it gives Ponte Vedra home buyers reason to cheer. So long as economic uncertainty remains, mortgage rates may stay low.

Of course, like all things in real estate, though, mortgage rates are local. Rates offered by banks varied by region.

Freddie Mac’s survey of 125 banks showed the following regional breakdown :

• Northeast Region : 3.88% with 0.8 discount points 
• West Region : 3.85% with 0.8 discount points
• Southeast Region : 3.91% with 0.8 discount points
• North Central Region : 3.89% with 0.6 discount points
• Southwest Region : 3.90% with 0.8 discount points

The best mortgage “deals” are currently available to North Central Region residents. The most expensive loans are for those in the Southeast.

Relative to history, though, all mortgage rates look inexpensive. Conforming 30-year fixed rate mortgage rates have never been as low as they are today. It’s a bonus for home buyers because cheap mortgage rate yield cheap mortgage payments. Home affordability remains near all-time highs.  

If you’re unsure of whether now is a good time to buy or refinance, the answer is yes. Talk to your loan officer to review your mortgage options.

In a week of up-and-down trading, mortgage markets improved for the second consecutive week last week. Weaker-than-expected jobs data plus evidence of a slumping Eurozone took mortgage bonds lower, capped by a furious Friday morning rally that dropped mortgage rates to near-record levels.

Once again, volatility ruled the bond pits.

Tuesday afternoon, after the release of the Fed March Minutes, mortgage rates spiked. Some products climbed as much as 0.250 percent. The surge stemmed from the Fed Minutes showing Federal Reserve members hesitant to begin new rounds of market stimulus without a demonstrated, national economic slowdown. 

Wall Street hadn’t expected the Fed’s verbiage to be so well-defined. With little evidence that such a slowdown was underway — the economy has shown two straight seasons of consistent, steady growth, after all — equity markets rallied and bond markets sunk, causing mortgage rates to rise.

By Wednesday, however, rates had started to fall. 

Civil unrest in Spain plus concern that the nation will fail to meet its debt obligations drew global investors away from equities and into the relative safety of U.S. government-backed bonds — including mortgage-backed bonds. This is a common investment pattern during times of economic uncertainty and one of the major reasons why mortgage rates have been so low, for so long.

If the scenario in Spain sounds similar to what transpired in Greece between mid-2010 and late-2011, that’s because it is. Mortgage rates in Florida may benefit in the medium-term.

Also helping rates last week was the March jobs report.

The U.S. government reported 120,000 net new jobs created in March, well short of the 200,000 figure that analysts expected. Market sold off sharply on the news, giving rate shoppers another chance to capture low rates.

This week, with the economic calendar light, look for Europe to dictate market action. Mortgage rates may move lower but there’s more room for rates to rise than to fall. Rates remain near all-time lows.

Mortgage markets improved last week on renewed concerns of a European debt default, and Federal Reserve rhetoric.

Conforming mortgage rates in Florida dropped on the news, one week after posting a 5-month high.

A major strike in Spain and growing unrest in Italy, both in opposition to recent austerity measures, have re-ignited fears that the Eurozone may lapse into recession.

These are similar beginnings as with last year’s events in Greece. The difference is that Spain and Italy represent a larger share of the Eurozone’s overall economy, and a debt default could trigger faster contagion.

Mortgage markets gained on the news in a bid of safe haven buying.

Bonds also gained as Federal Reserve Chairman Ben Bernanke clarified his position on the economy with respect to Fed-led stimulus. Summarized, he said that the Federal Reserve is inclined to keep its accommodative policies in place until the labor market is more fully recovered.

In addition, Chairman Bernanke alluded to making direct mortgage market intervention if U.S. economic growth were to stall in the near future.

The news helped push mortgage rates back below 4.000 percent last week, according to Freddie Mac’s weekly Primary Mortgage Market Survey. The average 30-year fixed rate mortgage rate fell to 3.99% for applicants willing to pay an accompanying 0.7 discount plus closing costs.

1 discount point is equal to one percent of your loan size.

This week’s mortgage market activity will be holiday-shortened so expect volatility — especially surrounding Friday’s March Non-Farm Payrolls report.

More commonly called “the jobs report”, Non-Farm Payrolls details national employment rates and gains or losses in the workforce size. Lately, what’s been good for jobs has been good for the economy so if the actual number of jobs created exceeds the 200,000 projected by economists, or if the Unemployment Rate drops off its current 8.3% reading, look for mortgage rates to rise.

In general, economic expansion is bad for mortgage rates throughout Jacksonville and the nation.

Other market-moving news this week includes Tuesday’s FOMC Minutes release and Thursday Jobless Claims data.  

After a brief run-up two weeks ago, mortgage rates are back below 4 percent. It’s good news for home buyers and mortgage rate shoppers of Ponte Vedra because with lower mortgage rates come lower mortgage payments.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the national, average 30-year fixed rate mortgage rate fell to 3.99 percent this week from last week’s 4.08 percent.

Last week had marked the first time since December 2011 that the benchmark rate crossed north of 4 percent — a span of 16 weeks.

And, it wasn’t just rates that got cheaper this week — closing costs dropped, too.

Freddie Mac’s survey showed that the average number of discount points to accompany a 30-year fixed rate mortgage fell one-tenth of a percent this week to 0.7, where one discount point is equal to one percent of your loan size.

As a real-life example, a $200,000 mortgage with an accompanying 0.7 discount points would be subject to an additional $1,400 one-time closing cost. Last week, that cost was $1,600.

Note, though, that these are average mortgage rates for the nation. On a local level, rates may be higher or lower, and so may the accompanying number of discount points.

For example, in this week’s Freddie Mac survey, each U.S. region boasts its own “average rate” :

• Northeast Region : 4.00% with 0.7 discount points
• West Region : 3.94% with 0.9 discount points
• Southeast Region : 4.01% with 0.8 discount points
• North Central Region : 3.99% with 0.6 discount points
• Southwest Region : 4.02% with 0.8 discount points

These rates are each well below the average rates of a year ago when the average 30-year fixed rate mortgage was 4.86%. 

Low mortgage rates can’t last forever so if you’ve been wondering whether now is a good time to buy a home or refinance one; or whether rising rates will harm your monthly budget, the answer may be yes. A weak economy held mortgage rates low last year. An improving economy should push rates higher this year.

Talk to your loan officer and review your home loan options. Looking ahead to spring and summer, mortgage rates appear poised to rise.

Mortgage markets carved out a wide range last week, eventually closing slightly worse. Mortgage-backed bonds sold off early in the week on rising investor sentiment. Then, they reversed higher on prepared remarks from Federal Reserve Chairman Ben Bernanke, which tempered Wall Street optimism.

When bonds prices rise, mortgage rates fall.

Conforming and FHA mortgage rates in Florida edged higher on the week, and remain at a 5-month high.

According to Freddie Mac’s weekly Primary Mortgage Market Survey, the average 30-year fixed rate mortgage is now 4.08% and the 15-year fixed rate mortgage is now 3.30%. Both loan types require an accompanying 0.8 discount points, plus a full set of closing costs.

1 discount point is equal to one percent of your loan size.

Last week’s conforming mortgage rates represent a sharp increase from the week prior when rates for the 30-year fixed rate mortgage and 15-year fixed rate mortgage averaged 3.92% and 3.16%, respectively.

If you’ve been shopping for a 30-year fixed rate mortgage, the interest rate increase added $9.22 to your monthly payment per $100,000 borrowed.

We can’t know in what direction mortgage rates will move this week, but we can be certain they’ll be volatile. Wall Street is suddenly on edge, unsure of whether the economy is improving as recent data suggests, or if the Federal Reserve is correct in that threats to growth persist.

The week’s data schedule is as follows :

• Monday : Pending Home Sales Index
• Tuesday : Consumer Confidence; Case-Shiller Home Price Index
• Wednesday : Durable Goods
• Thursday : Initial Jobless Claims; GDP
• Friday : Personal Income and Outlays

In addition, there are 6 Federal Reserve speakers scheduled for the week, including Chairman Bernanke. Expect mortgage rates to change frequently throughout the week as Wall Street wrestles with data and rhetoric.

Although mortgage rates spiked last week, historically, they remain low. If you’re nervous that rates may rise more, consider locking something in.

Mortgage markets worsened last week as the Federal Reserve’s Federal Open Market Committee suggested economic recovery may be closer than it originally expected, and that inflation may be a near-term economic concern.

Although the FOMC voted to leave the Fed Funds Rate unchanged in its current range near 0.000 percent, its published comments sparked a broad-based mortgage bond selloff.

Conforming mortgage rates throughout Florida rose sharply post-FOMC, climbing by as much as 0.375%.

If you’ve been shopping for a mortgage rate, the run-up was both untimely and unwelcome.

According to Freddie Mac’s weekly mortgage rate survey, for most of the year, conforming 30-year fixed rate mortgage rates had remained within a tight range near 3.90 percent for mortgage applicants willing to pay an accompanying 0.8 discount points.

This week, though, Freddie Mac is expected to report average 30-year fixed rate mortgage rates well north of four percent. It would mark the highest level for the benchmark mortgage rate since mid-December of last year.

There will be a lot more for rate shoppers to watch this week, too. There is a slew of housing data set for release and the heavily-anticipated HARP 2.0 Refinance program “goes live” nationwide.

HARP is a government-led refinance program meant to help underwater homeowners refinance their Fannie Mae- or Freddie Mac-backed mortgages into new loans at today’s low rates.

The program was first launched in 2009 and helped roughly one million U.S. homeowners. HARP’s newest iteration, though, provides for a more lenient underwriting process that is expected to open the program to an additional 6 million homeowners or more.

Mortgage rates may rise this week as a result of HARP-based loan volume. It may also rise on strength in housing — there are four data points due for release :

• Monday : Housing Market Index
• Tuesday : Housing Starts
• Wednesday : Existing Home Sales
• Friday : New Home Sales

As in most weeks, it’s less risky to lock a mortgage rate than to float one. Mortgage rates have much room to climb but very little room to fall. If you’re not yet locked, talk to your loan officer and make a plan.

Mortgage markets were mostly unchanged last week despite a series of positive developments. In addition to Greece successfully reaching a deal with its private creditors, the U.S. economy turned out strong reports — most notably with respect to Non-Farm Payrolls.

In February, the U.S. economy added 227,000 new net jobs and the figures from December and January were revised higher by an additional 61,000. It marked the 16th straight month of job gains nationwide.

The Unemployment Rate held unchanged at 8.3%.

Conforming mortgage rates in Florida improved slightly last week and mortgage rates continue to hover near all-time lows.

According to Freddie Mac, the average 30-year fixed rate mortgage nationwide is now 3.88% for Jacksonville mortgage applicants willing to pay 0.8 discount points and a full set of closing costs.

1 discount is equal to 1 percent of your loan size.

Freddie Mac also reported the 15-year fixed rate mortgage at its lowest level in history. The average 15-year fixed rate mortgage fell to 3.13% with an accompanying 0.8 discount points. This is more a full percent lower as compared to March 2011.

This week’s big event is the Federal Open Market Committee’s second scheduled meeting of the year. Whenever the FOMC meets, mortgage rates can change in a hurry.

The FOMC is a subcommittee within the Federal Reserve, the U.S. government’s monetary-policy making group. Since 2008, the Federal Reserve has held its benchmark Fed Funds Rate near 0.000%. It’s not expected to raise that rate Tuesday. However, just because the Fed Funds Rate won’t change, that doesn’t mean mortgage rates won’t.

This is because the Fed doesn’t set mortgage rates, but it does influence them. Market will read the Fed’s post-FOMC press release Tuesday for hints of new policy or economic growth. If the statement shows more optimism for the economy than expected, mortgage rates are expected to rise. 

Conversely, if the Fed shows pessimism for the U.S. economy, rates are expected to fall.

Other economic events this week include the releases of Retail Sales, Producer Price Index, and Consumer Price Index; plus three high-profile treasury auctions.

According to Freddie Mac’s weekly mortgage rate survey, for 13 straight weeks, the average 30-year fixed rate mortgage has held below 4.000% for mortgage applicants willing to pay up to 0.8 discount points plus a full set of closing costs.

These are the lowest mortgage rates in history and now — with a bevy of loan programs for the nation’s 11 million “underwater homeowners” including HARP, the FHA Streamline Refinance, and the VA IRRRL — millions of U.S. homeowners can exploit the current mortgage rate environment.

In this 4-minute clip from NBC’s The Today Show, you’ll learn about today’s mortgage market and your refinancing opportunities in Florida.

The video begins by telling us that 14 million credit-worthy Americans have yet to refinance their respective mortgages, and are leaving an average of $471 in “wasted savings” on the table each month which adds up to more than $5,600 annually.

That’s a big number.

Some of the video’s other key points include :

• Refinancing is “worth the hassle” when mortgage rates are as low as they are today
• The best rates are reserved for homeowners with the highest credit scores
• Comparison shop — your current mortgage lender may not offer you the best rates

Furthermore, the video reveals the characteristics of the homeowner type most likely to benefit from a refinance. These traits include having with 20% equity in the home; have plans to live in the home for at least the next 36 months; carrying a current mortgage rate of 5 percent or higher.

It should also be added that, with a zero-closing-cost or low-closing-cost mortgage, even a small reduction in your mortgage rate can make a refinance worthwhile.

Mortgage rates are low but can’t stay low forever. If you haven’t participated in the Refi Boom, talk with a loan officer and review your mortgage options. You may be able to save hundreds of dollars per month with just modest closing costs. 

Mortgage markets worsened last week as the U.S. economy continued to show that it’s in recovery, and as Federal Reserve Chairman Ben Bernanke publicly hinted at the same.

In a congressional testimony Wednesday, Chairman Bernanke suggested that new, Fed-led stimulus may not be imminent, surprising Wall Street analysts and market traders who, for months, have expected a third round of quantitative easing from the Fed.

Bernanke’s comments sparked a sharp bond market sell-off that briefly pushed conforming and FHA mortgage rates up 0.375% in Florida.

Other relevant data from last week included :

• Core inflation rising 1.9% from last year, below the Fed’s 2.0% target
• Consumer confidence climbing to a 12-month high
• Initial jobless claims falling to a 47-month low

Also, the Pending Home Sales Index posted its highest reading since the end of the 2010 federal home buyer tax credit, suggesting a strong spring housing market.

The economy appears much improved over this time last year.

By the end of the week, mortgage rates had recovered somewhat, but still closed worse on the week. Mortgage rates are higher than their lows of the year.

According to Freddie Mac’s weekly mortgage rate survey, the average 30-year fixed rate mortgage is now 3.90% nationwide with an accompanying 0.8 discount points and a full set of closing costs. Borrowers in Ponte Vedra wishing to pay no points, or fewer fees, should expect higher rates than the Freddie Mac average.

The average 15-year mortgage rate is 3.17% with 0.8 discount points and closing costs.

This week, mortgage rates should be volatile. There aren’t many new data points set for release, but the ones on the calendar are bona fide market-movers — especially Friday’s Non-Farm Payrolls Report.

More commonly called the “jobs report”, Non-Farm Payrolls data is closely watched because of the jobs market’s close ties to the health of the economy. Businesses have added jobs through 16 straight months and are expected to show another 210,000 added in February. If the actual number of net new jobs added exceeds 210,000, expect for mortgage rates to rise.

If the number falls short, watch for rates to fall.

Mortgage markets improved in a holiday-shortened week last week, drawing mortgage rates lower throughout Jacksonville and nationwide.

Few new economic releases reached the markets, but those that did suggested recovery — especially with respect to housing and employment, two key drivers of the U.S. economy overall.

Mortgage rates tend to rise when on strong data. That’s not what happened last week, however.

First, in housing, the New Home Sales and Existing Home Sales reports each showed strength for December and January. Separate reports show that sales volume is rising nationwide even as the number of available homes for sale fall.

Home Supply is reaching bull market levels, which pressures home prices higher.

And then, in employment, the government’s Initial Jobless Claims report turned up good news, too. The report’s 4-week moving average is now down to its lowest level since 2008, a figure that suggests that U.S. households are getting back to work and staying there.

As rate shoppers in Florida , don’t expect rates to fall forever.

Last week’s rate improvements were partly because the Greece bailout has yet to be finalized, and partly because concerns about Iran have sparked a mortgage bond flight-to-safety. International demand for U.S.-auctioned bonds was especially high last week and mortgage bonds benefited.

As the situations in Greece and Iran stabilize, therefore, all things equal, mortgage rates should rise.

There are just two key data points set for release this week — the Pending Home Sales Index (Monday) and Personal Income and Outlays (Thursday) — plus two key European votes on the Greece bailout. The Case-Shiller Index will also be released and the FHA is expected to announce new mortgage insurance premiums.

Mortgage rates remain near all-time lows. If you’re still floating a rate, or waiting to refinance, consider moving up your timeframe. It’s a good time to lock your mortgage rate for the long-term.