Mortgage Rates



Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com




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Wednesday, April 06, 2011


The equity markets opened stronger this morning resulting in some minor price declines in treasuries and mortgages. Crude oil high as is gold and silver, precious metals continue to increase on inflation fears and continued concerns about major currencies. Demand for precious metals strengthened over the past week as investors sought a shelter to protect their wealth against the conflict in Libya, the nuclear crisis in Japan and European sovereign debt concerns.

No economic releases today; the DJIA opened +39 at 9:30 keeping a little pressure on the bond and mortgage markets. The 10 yr now at 3.51% right at its near term support; for the past eight days the 10 yr has moved on a tight 10 bp range (3.40% to 3.50%). The wider and more important support for the note comes at 3.60%.

More mixed thoughts from another Fed official on ending QE and increasing the FF rate. Atlanta Fed Pres Lockhart said he doesn’t expect the central bank to tighten U.S. monetary policy by the end of the year with inflation low and the economic recovery fragile. “I wouldn’t rule it out entirely, but at this stage I personally am not leaning in the direction of thinking that is absolutely required.”

Mortgage applications decreased 2.0% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 1, 2011. The Refinance Index decreased 6.2% to its lowest level since February 25, 2011. The Government Purchase Index increased 10.3% to its highest level since May 7, 2010. The unadjusted Purchase Index increased 7.0% compared with the previous week and was 16.8% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is down 1.9%. The four week moving average is up 0.9% for the seasonally adjusted Purchase Index, while this average is down 3.2% for the Refinance Index. The refinance share of mortgage activity decreased to 61.2 percent of total applications from 64.3 percent the previous week. This is the lowest refinance share since May 7, 2010. The adjustable-rate mortgage (ARM) share of activity increased to 6.1% from 5.7% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.93% from 4.92%, with points decreasing to 0.70 from 0.83 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.14% from 4.16%, with points increasing to 1.09 from 0.99 (including the origination fee) for 80% loans.

The rest of the session today will be watching stock indexes; as long as they are improved the bond market doesn't have much reason to improve. Mortgage prices likely to stay weak also.