Colorado Home Mortgage Loan: Ambac could cause rates to go up
Colorado Home Mortgage Loan rates continue to be the center of attention for those buying homes in the near future. I am asked constantly about how I determine where rates are going. Simply put I make an educated guess based on the economic data and the live pricing feeds I have into the Mortgage Backed Securities market. It is actually very simple to predict the direction Colorado Home Mortgage Loan rates will go. If the Mortgage Backed Securities market indicates that the prices on bonds are increasing then the rate on Colorado Home Mortgage Loans will decrease. Likewise, if the Mortgage Backed Securities price decreases Colorado Home Mortgage Loan rates will increase. The economic data released into the market projects the state of the economy today. If the economy shows signs of improvements Mortgage Backed Securities will drop in price. The reason they drop in price is due to investors moving money out of safe Mortgage Backed Securities investments and into high risk stock investments. Colorado Home Mortgage Loan rates will certainly increase when money is moved out of Mortgage Backed Securities market.
Over the last 9 Months the economic news has been very negative which in return has put Colorado Home Mortgage Loan rates into a very pleasing price range. It seems like everyone I talk to wants and expects to get their rate into the 5.5% range which has been the low points over the last 9 months. We have experienced this low point about every 60 days or so. It really depends on what the trend in the Mortgage Backed Securities market is and how investors are reacting to the economic data being released. Inflation continues to be the negative influencer for Colorado home Mortgage Loan rates. The mere fact that it is mentioned normally has Colorado Home Mortgage Loan rates moving in the wrong direction. The key to locking is to figure out when the low point will happen before you actually close on your loan.
So far we are trending around 5.875% which is still good for Colorado Home Mortgage Loan rates, but we certainly would like to get a little lower. So far today the Mortgage Backed Securities market has not responded well and it appears at least this morning that investors believe that the Durable goods report will come in better then expected. I am still not convinced and as I stated on my other blog www.coloradomortgagebanking.com today’s pricing trends normally predict what’s in store for the economic data being released the next day. We will have to watch for a late day rally to see if any insider information makes its way into the market. Rates will certainly be a little worse today, based on what I am seeing in the market. Though rates will jump a bit we are still holding strong on our FLOAT recommendation, no need to overreact with the market. If Durable Goods come in below expectations we will see some positive changes in the Colorado Home Mortgage Loan rate market. Stay tuned I will update you on live market pricing as it happens.
Right now the Mortgage Backed Securities market is not responding the way we would like. On the news front Ambac posted a 1.7 Billion dollar loss. Ambac is a bond insurer and losses with this company signals instability in Mortgage Backed Securities. This will probably be the reason Mortgage Backed Securities take some hits today. Colorado Home Mortgage Loan rates increased to its highest point in 6 months the last time a bond insurer company reported losses. Today we will not see the news effect the market as much because of all the other turmoil we are experiencing in the stock market. Company after company continues its lower then expected profit reports which will help minimize the decreases felt from Ambac news. Stay tuned, today will be an interesting day. We expect Colorado Home Mortgage Loan rates to improve over time, but today will not be that day. Hopefully the economic data released tomorrow will push out the negative press on Ambac and help get Colorado Home Mortgage Loan rates back where locking makes sense.
Tags: Colorado home mortgage loan, Home Mortgage, Mortgage Backed Securities, Rates
