Mortgage Weekly Update - Last Week in Review
Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Foster points out this week the "roller coaster" ride last week's rates took even though they ended the week relatively unchanged from the beginning. This would indicate that timing of the loan might be crucial to getting that all important low rate locked in.Bond Traders and investors alike didn't buy tickets for this ride [the roller coaster], but they've had that "funny feeling in their tummy" for the past few weeks, as Mortgage Bonds and home loan rates continue to swing sharply higher, then plummet back lower, sometimes in the course of just a few hours. Say what indeed - what's causing all this dramatic action?
Last week, there was a definite lack of economic headlines to drive the ride, but the action was still intense for a variety of reasons. Our Mortgage Bonds are purchased by many foreign investors, who are watching global interest rates rise, and contemplating keeping more of their money "closer to home" and investing in their own country, rather than in the US. If they sell off...Mortgage Bonds plunge nauseatingly lower. Additionally, US companies that issue their own Corporate Bonds also buy and sell huge blocks of Treasuries and Mortgage Bonds, which can jolt the Bond market higher or lower on any given day. They do this in an effort to protect their own Corporate Bond issuance against rising interest rates, as they prepare and then sell off their own Corporate Bond issuance. Further, with oil prices ratcheting ever higher, investors pulled money out of Stocks on Friday and sent them swooning lower...but parked the money in Bonds, helping Bonds regain the altitude they'd lost earlier in the week.
A little sick to your stomach just trying to follow all the action? The good news is that despite lots of midweek action - home loan rates pulled back into the station on Friday around the very same levels they started the week at. But last week may have just been a kiddie ride compared to what the coming week may have in store...read on for this week's forecast, and learn why the action is likely to stay intense... Read more.
- Foster Weeks
posted by SFResidence.com @ 8:59 AM
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