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

Colorado Home Mortgage Loan rates take another hard hit today.  New and old concerns related to inflation continue to make the headlines and Colorado Home Mortgage Loan rates are reacting negatively towards it.  The only major economic report released today were the Pending Home Sales numbers which came in considerably higher then expected.  Colorado Home Mortgage Loan rates already impacted by inflationary concerns saw an even greater loss when the report was released.  Colorado Home Mortgage Loan rates jumped up about .25% today and about .5% since last week.  Most Colorado Home Mortgage Loan lenders have hedged their pricing to a point where Locking just does not make sense.  The fear hear is how bad will inflation be, and to what extent will it play in the Colorado Home Mortgage Loan market.  Most experts believe that Colorado Home Mortgage Loan rates will continue to rise on concerns that inflation will increase due to the continued price increases related to oil.  So if you are closing in the near future and have not Locked in a rate then LOCKING may be a good idea.  I would recommend a LOCK today at 6.0% if you can still get that rate.  Colorado Home Mortgage Loan rates do have some room to drop especially if investors regain some confidence lost during current inflationary concerns. 

Colorado Home Mortgage Loan rates are impacted by economic conditions.  One condition not mentioned in awhile, but appears to be a perfect explanation to the economic status of our country today is “Stagflation”.  Colorado Home Mortgage Loan rates always do well during bad economic times, but mixed in with inflationary pressures Colorado Home Mortgage Loan rates have no other direction to go then up.  Stagflation is an economic condition first proposed back in the 1970’s.  It is controlled by two principal contributors inflation and economic slow downs.  We are currently experiencing both these conditions and should be talking about managing our decisions based on lessons learned during our last “Stagflation period”.  Colorado Home Mortgage Loans are greatly impacted by monetary policy.  Monetary policy is controlled by the Federal Reserve.  The Federal Reserve has two major concerns on their hand, Inflation and decreasing economic growth.  Depending on what policy the Federal Reserve implements can and will create a negative influence on the policy not being enforced.  For example if the Federal Reserve fights inflation then they will jeopardize stimulating economic growth.  Like wise Federal Reserve policy to stimulate economic growth will negatively impact inflation.  Kind of a damned if you do and damned if you don’t. 

Colorado Home Mortgage Loan rates also react positively or negatively depending on the policies being implemented by the Federal Reserve.  If the Federal Reserve combats inflation Colorado Home Mortgage Loan rates will react positively.  Likewise several techniques used to stimulate economic growth, like increasing the money supply will have a negative result on Colorado Home Mortgage Loan rates.   Stagflation was last felt during the late 1970’s, and though the Federal Reserve recognizes the issues on hand, they are conflicted on how the resolve the issue.  Fishers concerns on inflation lead to a steep increase in Colorado Home Mortgage Loan rates today and appears to be his biggest concern, however Bernanke and the other Federal Reserve Board members all feel Economic stimulation should be their primary concern.  This is why we are seeing Colorado Home Mortgage Loan rates increase and it is also why we are in the making of another possible “Stagflation Period”. 

As I stated before Stagflation can result when and economy is slowed by an unfavorable supply shock, such as an increase in the price of oil hear in the U.S. As inflation increases Economic conditions tend to worsen.  When the Economy faces times of uncertainty and an obvious decrease in production monetary policy is used to kick start the sluggish economy.  When the Federal Reserve jumps in and begins to increase the supply of money they increase the pressure centered around inflation.  As a result inflation increases even more.  The increased inflation causes Colorado Home Mortgage Loan rates to go up. Stagflation only becomes a problem when the marginal impact on Policies used to combat the economic issues cause more harm then good.  Generally the Federal Reserve can either stimulate the economy or attempt to rein it by adjusting interest rates making it cheaper to borrow money.  Adjusting the rate down tends to improve growth but it also increases the pressure on inflation. Adjusting the rate up tends to fight inflation but it hinders economic growth. During periods properly described as stagflation both problems co-exist. Major economic conditions of unusual proportion will have already created near-crises on both fronts before stagflation can set in.  I don’t have a solution to where Colorado Home Mortgage Loan rates will go but our government needs to improve on policy decision especially during such a fragile moment in time.  Let’s not have history repeat itself or we may find our unemployment rate hit 10% and Colorado Home Mortgage Loan rates will hit 10%.

Now with that said, I am confident that the Federal Reserve will do the right thing for the best long term results.  Now we may not like what they are doing, but so far they have shown no signs of repeating bad economic decisions.  Especially over supply issues in the money supply.  Call me with your Colorado Home Mortgage Loan questions and give me a chance to help you find the right Colorado Home Mortgage Loan.

Daniel 

Colorado Home Mortgage Loan rates took a hard hit today on reports that Inflation appeared to be under estimated.  Bill Gross an investment guru and expert in the market made some strong statements indicating that current inflationary data appeared to be under estimated, and that inflation data going forward would be worse then expected.  Bill Gross currently runs the biggest investment portfolio at PIMCO and has been an expert in this field for many years.  His comments to me appear to be accurate, but he does not sit on any committees responsible for reporting inflationary data.  These comments are made based on his professional opinion and by looking at the recent increases in oil, I believe he is correct.  Colorado Home Mortgage Loan rates took about a .25% hit today and appears to be on the rise.  Much of the activity felt in the Colorado Home Mortgage Loan rate market was based on fear, but the fear does seem to be warranted.  It is hard to gauge the exact impact oil will have on inflation, but it is easy to see that it will be a negative impact.  Colorado Home Mortgage Loan rates will continue to jump up as negative inflationary data comes in. 

I have implemented a FLOAT recommendation today simply because the increases felt  today were a result of fear, not hard statistical data released by any economic reporting agencies.  Colorado Home Mortgage Loan rates jumped up today and as a result 5.75% may not be available.  I am maintaining a Colorado Home Mortgage Loan lock recommendation at 5.75% and unless I see something in the data that requires we increase this recommendation to a higher rates will have my clients floating.  Floating will stay as the recommendation until we can get that Colorado Home Mortgage Loan rate at or below 5.75%.  It’s interesting what 24 hours will do, yesterday the feeling was that we have some tough times ahead and that we are not even close to being out of the economical debacle we currently face.  Today I am seeing experts changing their tune on the news that Jobless Claims came in better then expected.  Come on!  Realistically we have some tough times ahead which normally means Colorado Home Mortgage Loan rates should be getting better, but we have one major obstacle and that will be inflationary pressure.  Any positive gains in the Colorado Home Mortgage Loan market due to economic issues will be off set by how bad inflation reacts over the next 12 months.  To what extent this will happen is still hard to gauge.   

The Jobless claims report came in at 365K new claims filed, which is slightly better then the 370K expected.  Normally this alone would not create and movement in Colorado Home Mortgage Loan rates, but today it did push Colorado Home Mortgage Loan rates up a bit.  Initial jobless claims measure the number of first time filings for state jobless benefits. Claims are quite volatile from week to week; therefore many analysts track a four-week moving average to get a better sense of the underlying trend. The report also contains two other statistics- the number of people receiving state benefits and the insured unemployment rate.  The four-week moving average and continuing claims are watched more closely for changes. The labor market is considered to be improving when the four-week moving average goes below 400,000. If unemployment goes low enough it can put wage pressure on the economy and can cause increases in interest rates.  What is interesting about today’s release is that it is the 4^th highest Jobless Claims reported in the last 3 years yet the forecast seemed to be viewed as a positive sign for economic recovery.  Go figure.  Colorado Home Mortgage Loan rates in the past would have responded very positive to the high number, but with such terrible data being released month after month it actual appeared as an improvement. 

Tomorrow we will see our last economic report until Tuesday of next week.  Existing Home Sales will create some movement for Colorado Home Mortgage Loan rates but it does not move the market much.    The Existing Home Sales Index reports the number of existing homes sold, expressed on an annual basis. The sales of existing homes accounts for 84% of all houses sold and the total volume indicates housing demand.  The report is a strong predictor of future national mortgage origination volume and for near term spending for housing-related items.  Mortgage origination has reported negative increases the last two weeks so it is expected that tomorrows report will come in low.  Colorado Home Mortgage Loan rates should respond well but it will not make up all the ground lost today.  Not only will it not make up the ground lost today we may see Colorado Home Mortgage Loan rates get worse if inflationary concerns continue to dominate the Headlines. 

I do think its funny how Congress has required Oil CEO’s to come out and justify their profits.  What they should be working on is alternative solution to a problem that will not go away.  We have a Varity of options to explore and talking about whose fault it is will not solve the problem.  Colorado Home Mortgage Loan Rates will continue to see obstacles as long as oil continues to rise.  Oil is the biggest cost component in shipping which contributes a major impact to the ending price set on goods.  The increases felt in the market will translate to higher inflation.  We have a long way to go, and I do not have a solution to the problem, but I do believe we should do less talking and more doing.  For the sake of time I will limit my tirade to this one thought.  On rare occasions government intervention does help market systems and in the case of Oil something has to be done.  Those that voted in our current leadership party voted on the premises of change.  Well it appears to me that change has not happened.  What’s scary is that it does not appear that change will happen anytime soon.  Contrary to what these congressional people promised NOTHING HAS CHANGED.  If anything things are worse.  If we want change, maybe we need to re-look at who we voted in and think long and hard about voting someone else in. 

If you have time Check out www.coloradomortgagebanking.com/news for more insights on economic conditions.  Please call me with your Colorado Home Mortgage Loan questions.  God bless.

Daniel

 Colorado Home Mortgage Loan rates will be impacted by tomorrows Core PPI report.  PPI measures the change in prices, paid by producers, for a fixed basket of capital and consumer goods. It also measures the change in prices received by the manufacturing, mining, agriculture and electric utility industries. The “core” PPI excludes the often-volatile food and energy sectors and gives a clearer picture of the underlying inflation trend.  Colorado Home Mortgage Loan markets watch this closely because when inflation goes up the value of their bond drops.  When bond values drops the market develops an inverse relationship between bond prices and interest rates.  The inverse relationship causes Colorado Home Mortgage Loan rates to go up as bond prices go down.  Core PPI does exclude food and energy, but oil still makes its way into the numbers.  When Oil prices are high, the cost of shipping increases.  When the cost of shipping is up the cost of goods naturally follows.  Higher priced goods translate into higher priced products sold to the consumer.  The end result is INFLATION.  No way to avoid it, Colorado Home Mortgage Loan rates will always have negative reactions to inflationary pressures.  We do have a little bit of hope as it relates to PPI and that is CPI.  CPI which was reported a week ago came in lower then expected.  These two reports have similar characteristics and normally run in the same patterns.  Even though CPI came in lower then expected, I really have no guess on where Core PPI will come in at.  Normally I would predict a higher then expected number, however because Consumer Price Index came in lower then expected it might be safe to assume that PPI will do the same.  However I do not want to speculate, because everything else points to a higher then expected PPI number.

So Far today’s Mortgage Backed Securities market appears to be light in trading, but the price of bonds are on their way up.  This is good news for Colorado Home Mortgage Loan rates.  I am hoping that we are seeing some insider trading going on in anticipation of tomorrows PPI report.  It could also mean that we have some investors that lack the confidence in trading stocks today.  Regardless of the reason, Colorado Home Mortgage Loan rates do appear to be improving for the moment.  I definitely recommend LOCKING today the risk/reward is not worth floating through tomorrow.  Now if you are risk taker and PPI comes in low then you will see at least an 1/8^th better on your rate going into Wednesday. 

Today the only economic report we had was the Leading Indicators report which came in higher then expected.  Experts predicted a -.1% growth rate when in fact we had a Positive .1% increase.  This by its self had no impact on Colorado Home Mortgage Loan rates.  The Leading Indicators report is composed of ten indicators designed to forecast the strength of the economy six to nine months into the future. The ten indicators are picked from different parts of the economy and are chosen because of their relevancy and accuracy. They are each given equal weight when applied to the composite index.  The LEI can predict peaks and troughs in the economy but because many of the indictors are released individually before the LEI composite index is released, market rarely watch the report very closely.  Some of these indicators include but are not limited to; consumer price index, Hotel Occupancy Rates, total imports, tourist arrivals, and more.  These numbers give economist a basic understanding on the direction the economy is heading.  You can see why Colorado Home Mortgage Loan rates can be impacted, but it is the individual reports like Consumer Pricing Index which is released before this report where the real impacts are felt.

To get a basic understanding on the direction of Colorado Home Mortgage Loan rates visit www.coloradomortgagebanking.com  until then please call me direction for any of your Colorado Home Mortgage Loan questions.

Daniel

Check out www.coloradomortgagebanking.com/news for some additional news on Colorado home mortgage loan information.  Early this morning TPG a Texas investment company offered WAMU $5 billion dollars in an effort to block JP Morgan from buying WAMU.  WAMU has hit some difficult times with some of their Mortgage Portfolio’s and has recently become an easy target for take over.  As their stock decreases in value other institutions become very interested in purchasing a first rate bank at a discount.  This is what we saw in the last week or so, and just before JP Morgan could build enough momentum to purchase the stock out right, TPG infused WAMU with $5 Billion dollars under terms yet to be disclosed.  This sent the stock sailing and pushed investors out of Mortgage Backed Securities and back into the stock market.  The recent activity in the stock market has caused Colorado home mortgage loan rates to start out a little higher this morning.  These rates have pretty much stayed unchanged throughout the day.  Other Reports began to trickle in late this morning indicating a down grade in profit expectation for a couple of industry leading companies.  These reports caused several investors to bail out of stocks late in the morning defusing any of the stock markets gains from earlier in the day.   Overall Colorado home mortgage loan rates would have seen greater increases in their rates had the market not reported any derogatory news, but as it stands it was a day of ups and downs, bringing us right back to where we started.  Colorado home mortgage loan rates also suffered a bit due to the lack of activity in volume.  We expect to see more activity as the week progresses and should see rates impacted by the economic reports due out throughout the week.  If the trend continues as anticipated we should see rates fall back into Fridays lows.  FLOATING will not be a high risk, but please  remember that if we can lock you in around the 5.5% range then LOCK.  Over the last year 5.5% seems to be that low point and even if rates go a little lower you will still be locked into a Colorado home mortgage loan you can live with.  Good luck and God Bless

Just a reminder to anyone wanting additional informatio on Colorado home mortgage loan programs, I do write a blog on Coloradomortgagebanking.com/news and homestly you I never know how different the Colorado home mortgage loan information will be.  I typically write for that site first so it tends to be more technical Colorado home mortgage loan data then what is written here, but the message should be the same.  The market continues to see economic reports trickling in today, and so far it should be good news for Colorado Home Mortgage Loan rates.   The Jobless claims report was worse then expected and the LEI (Leading economic indicator) shows where the economy is and often indicates Recessionary presures.  Last look at Mortgage Back Securities indcate even though the Dow has hit the 150 point increase that Colorado Home Mortgage Loan rates are holding steady.  Most mortgage anaylsts are say that Floating can pay off for an even better Colorado home mortgage loan rate.  I am going against the curve today and have been that way for 4 days now and my recommendation is to Lock.  Monday’s Colorado Home Mortgage Loan rates continued to show the same strong rate trend from Friday and through out the week analysts have been going back and forth on floating or locking your Colorado Home Mortgage Loan. I have been advising everyone to Lock.  Rates have only really moved about 1/8 of a point or .125% up or down since Friday and it still remains good.  Colorado Home Mortgage Loan programs 6 weeks ago where .75% higher and anyone of my clients would have killed for today’s Colorado Home Mortgage Loan rates.  LOCK LOCK LOCK take the guessing out of it.  Rates are good and I should see my entire Colorado Home Mortgage Loan pipeline locked by the end of the day.  Stay tuned this evening for the days report and until then God Bless:-) 

If you currently have a colorado home equity loan you may have noticed your rate going down.  Colorado home equity loan programs are one of the few programs that tie directly to the Federal Funds Rate.  The Federal Funds Rate is a short term interest rate given to banks to meet reserve requirements.  When the Federal Reserve lowers this rate it stimulates lending activity and in return stimulates the economy.  If you have a Colorado home equity loan it may be a good time to call your lender and see if the have a Colorado home equity loan that you can lock in as a fixed rate.  Even if the Federal Reserve intends to continue to lower this rate which is now at 5.25%, it still might be a good time to lock a fixed Colorado home equity loan into place.  I have several lenders that offer these Colordo home equity loan programs for free which can do amazing things for your cash flow.  With that said lets quickly talk about the Mortgage back securities market which has had activity flowing like a tropical storm in the last few days.  The question continues to be what will impact us more bad economic news or inflationary pressures.  Colorado home mortgage loan rates will either go up or down depending on the flavor of the moment.  This couldn’t be more true for the Colorado home mortgage loan market as it was yesterday and today.  Mortgage Back securities started off high as economic data trickled in sending Colorado home mortgage loan rates down, but as the Federal Reserve meet and Bernanke spoke investors stayed tuned.  Like a pack of wolves circling the herd waiting for some type of slip anything really to react to investors choose to read into Bernanke statements about continuing to lower interest rates to keep the economy moving.  As the head of the Federal Reserve, Bernanke sent investors into a frenzy late yesterday and early today with concerns about inflation.  Inflation typically increases when spending is high.  When the federal reserve lowers short term rates, money becomes cheaper and people tend to spend more, causing Colorado home mortgage loan rates to go up, but on a lighter note sending Colorado home equity loan programs down.  Sorry for not updating the blog early on, it got crazy today and my clients needed me.  Stay tuned early tomorrow as I update this site with real time Colorado home mortgage loan information that you can react to immediately.  If you have question please contact me directly I enjoy talking to all of you, until then good night and god bless.