Colorado Home Mortgage Loan

The week’s headline economic report showed that inflation rose far more than expected in July, yet mortgage rates barely reacted and ended the week essentially unchanged. The July Consumer Price Index (CPI), the most widely watched inflation indicator, rose at the fastest annual rate since 1991. The core rate, which excludes the volatile food and energy components, rose at a 2.5% annual rate. The Fed’s perceived comfort level for core inflation is between 1.5% and 2.0%.

Mortgage rates usually move higher after an unexpected increase in inflation. This time they did not. Investors have started to expect that inflation levels will diminish later in the year and point to a couple of factors. First, slower economic growth in major global markets will reduce demand for goods and energy. In addition, a stronger US dollar will lower the cost of imported goods.

Even the Fed’s Stern, noted for his vigilant anti-inflation stance, stated that he expects inflation to come d own after the third quarter. To summarize, economic weakness at home and abroad, a stronger dollar, and a decline in oil prices offer hope that future inflation levels will be lower.

The Economic Calendar will be very light next week. The Producer Price Index (PPI) will come out on Tuesday. PPI focuses on the increase in prices of “intermediate” goods used by companies to produce finished products. Housing Starts will also be released on Tuesday. Leading Indicators and the Philadelphia Fed index will come out on Thursday

You can get most of the Retail Sales  information from www.coloradomortgagebanking.com/news  Colorado Home Loan rates are currently moving up and down with very little volatility at the movement, indicating that Colorado Home Loan rate pricing should stay right where they started the day.  The Retail Sales numbers came in slightly higher then what investors anticipated they would, but not high enough to make Colorado Home Loan rates increase.  The real story will come in the days ahead.  We have two inflationary reports coming out and both reports can move Colorado Home Loan rates up or down fairly quickly.  The Consumer Price Index and the Producer Price Index both tell the story of what inflation has done to pricing as a whole.  These indicators, which are reported monthly, will set the stage for what Colorado Home Loan rates will do for the remainder of the month.  Experts are currently stressing the fact that energy prices are at a point where inflation has to be high.  I too believe that this will impact the numbers, but investors have already anticipated high energy costs into their risk assessments.  So what happens if these reports come in at or below expectations?  Colorado Home Loan Rates will improve.  Based on the state of the Economy and the fact that people are afraid to buy, inflation should be in line.  Inflation can really only go up if demand is high, if demand is low pricing will decrease.  Low demand normally will cause inflation to decrease.  So we are back to our original thought and that is what story will energy have with the numbers?  Hard to say exactly how investors will react to this, but we will know by Thursday.  I will keep the FLOAT recommendation in place, but stay tuned to see what the reports will do.  God Bless and thank you for staying tuned.

Colorado Home Mortgage Refinance loan rates will certainly have some improvement today on news that Consumer Sentiment has hit a new 20 year low.  In 1982 the U.S. found itself recovering from the worst Colorado Home Mortgage Refinance loan rates of all time.  It was obvious at the time that because jobless claims were high, interest rates were unbearable, and inflation was in double digits, that people were feeling beat and uneasy with the direction the economy was going.  Well at the time Consumer Sentiment was at 62.2.  Consumer Sentiment rating shows that Americans today feel about the same as Americans in the early 1980’s.  So do we now have clear and desisive proof indicating that we are in a tough economic situation?  Consumers certainly believe that.  When Consumer Sentiment is low consumers choose to save and invest in low risk investments.  These investments include, but are not limited to, Mortgage Backed Securities.  So for the short term, at least for today, Colorado Home Mortgage Refinance Loan rates are better.  I have yet to see any major shifts in pricing, but we will continue to monitor that as the day progresses.  Regardless, Colorado Home Mortgage Loan lenders released rates lower today, stopping the daily rate increases shown in the market over the last 96 hours.  LOCKING today and capturing some of the losses from yesterday will be a good choice if you are closing soon.  If not we have more economic news in store early next week.  Next week will be an interesting week for Colorado Home Mortgage Refinance loan rates.  Inflationary reports will be released and investors will certainly respond to what they hear.  Colorado Home Mortgage Refinance Loan rates will probably start off a little higher on Monday in anticipation to what Tuesday’s and Wednesday’s reports will say.  Once the information is released rates will respond quickly.  Colorado Home Mortgage Refinance Loan rates will certainly increase if inflation reports higher then expected, likewise they will drop if the reports come in as expected.   One nagging issues for inflation’s next week, will be the cost of energy factored into the inflationary data.  This is expected to have negative results on the data.   However, Given the state of the economy excluding energy, inflationary pressures should come in at or below expectation.  The make or break figure will be how much energy contributes to the overall inflation calculation.   Those looking to FLOAT may see the gamble pay off.  Tuesday and Wednesday will tell us where we stand.   The last two Inflationary reports came in as expected just an FYI. . .

Colorado home mortgage loan programs got a bit of good news today.  The Fed’s issued two new economic reports both coming in lower then expected.  Colorado home mortgage loan rates have dropped a bit on the news, but the lack of activity in the market makes it hard to gauge exactly what kind of long term impact these reports will have.  Stay tuned on Monday and Tuesday to see if in fact  rates drop on Colorado home mortgage loan programs.  The first report issued early this morning had its importance tied to inflation.  I wrote a lot about inflation and how inflation impacts Colorado home mortgage loans on my other blog site: www.coloradomortgagebanking.com/news so I will not go into too much detail in this article.  The report I am referring to is the Personal income and outlays report which focuses on an individuals source of income, and total income, from month to month.  This report also indicates where the income is being spent.  If spending activity is high the concerns for inflation is high.  When inflation concerns are high Colorado home mortgage loan programs tend to see interest rates increase.  The good news is that this economic report came in lower then expected and actually reiterated what I have been saying for awhile, and that is that inflation is not as bad as investors would have us believe.  The second report came from the University of Michigan and it was the Consumer Sentiment Survey which basically illustrates a persons belief on what the economy is doing.   This report came in very low but not too much lower then expected.  It goes to show that as a society we continue to have our perceptions manipulated by the mass amounts of media experts all claiming to know exactly what the economy is doing.  Unfortunately most of them have a pretty good idea, but because bad news increases ratings, good news normally finds a back burner.  Make no mistake we have major issues in the Colorado home mortgage loan markets and will continue to see these issues over time, but we do have some good data to report.  The most important misconception is that inflation has gotten out of control.  When you look at historical data we are actually trending very low.  Investors have too high of an expectation for where inflation should be, and it is not as bad as they would lead you to beleive.  When investors figure out a way to overcome their fears and accept the facts as it is reported, Colorado home mortgage loan rates will improve.  The next misconception is that home sales are considerably down, actually new data and previously reported data all say home sales are exactly where they should be.  The problem with the data is that sales are compare today with some of the best home sale numbers of all time.  People are still buying homes we are just not breaking any new records.  The last part comes in the forecasts of Foreclosures, yes Foreclosures are high, but they still account for a very small portion of all loans issued.  Foreclosures are a natural part of doing Colorado home mortgage loan business and financial institutions understand and calculate a portion of their portfolios going into default.  The press has jumped on this news to indicate a catastrophic epidemic hitting middle America, and though it is bad, it is not nearly as bad as they would have you believe.  Hope this helps, my recommendation continues to be a FLOAT recommendation.  We will watch the markets for you closely to see what next week will bring.  In the mean time have a great weekend and God bless.

Daniel

I want to go on record to say I am not an english professor but a Colorado home loan provider.  I have my MBA from UCCS and have made studying monetary policy a high priority.  How else can I offer the best Colorado home loan options if I don’t have the knowledge to back it up.  I will be posting news information at least once a day, so that all my clients can get up to date information on the markets and how Mortgage Backed Securities will impact your colorado home loan options.  The big news today came in the announcement that J.P Morgan was buying Bear Sterans a large provider of Mortgage Backed Securities.  The federal reserve has stepped in to help J.P Morgan in its buy out to help avoid any major obsticles in any home loan options.  Colorado home loan choices will continue to be maintained at its current rates.  We will probably continue to see activity in the bond market incresing the price of the bonds and decreasing the rates charged on Colorado home loan options this week.  Inflation continues to breath its unhealth breath on the markets and typically will drive interest rates up when it is the center of attention.  The Consumer Price index  that came out on Friday put to rest most of the inflation concerns for awhile.  Colorado home loan rates have been moving down for about a week and we should continue to see Colorado home loan rates coming in better as the week progresses.  Stay tuned for any major news like the Federal Funds rate decreasing tomorrow.  we are projecting a full 1.0% decrease in the Federal Funds rates to help liquidity issues in the market.  Statistically everything points to us being in a recession and nothing looks worse for the Federal Reserve then a recession, so they are doing all they can to pull us through.  Last weeks burst of funds in to the market helped drive Colorado home loan rates to this years all time low and the continued bad news in the economy will continue to drive Colorado hom loan rates down.  If the media starts to focus on inflation as its biggest economic foe we will begin to see investors over react and Mortgage backed securities may start taking a hit, increasing Colorado home loan rates.  The key here is what will win the battle inflation news or bad economic news.  If inflation wins then Colorado home loan rates go up.  If the bad economic news wins Colorado home loan rates drop.  Right now we are entering into the 2nd half and Bad economic news is winning.  Leave it up to our referees the Federal reserve to find a way to even the playing field by decreasing short term interest rates and increasing cash into the economy.  When this happens inflation is not far behind.  In the mean time Colorado home loan rates should continue to drop today and into tomorrow, keep your ears and eyes open we may need to lock your rate soon.  Recommendation:  Float