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U.S. Treasury Bonds
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Maturity
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Yield
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Last
Week
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Last
Month
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5 Year
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4.01
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4.06
|
4.42
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10 Year
|
4.75
|
4.79
|
5.11
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30 Year
|
5.38
|
5.40
|
5.63
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Interest rates this past week opened
flat, however Wednesday they dipped
down fairly strong only to bounce back by
the weeks end. Usually when
the stock market is pulling back, investors
will "run for cover" and invest in the bond
market as we saw demand this past week increase
for bonds. The current stock market is a
pure traders market and institutions are
sitting on the sidelines finding their opportunities
to nibble. Keep in mind, interest
rate pricing for consumers is closely tied
to bond pricing. Usually when bonds lower,
yields on those bonds rise and so do interest
rates. This rule is usually true when the
opposite occurs as well.
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Economic Indicators for this week that could
impact the mortgage or real estate markets
include...
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Could It Be Time To Refinance
AGAIN?
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New mortgage
applications filed with mortgage
lenders and brokers jumped last
week as Americans rushed to capture
falling mortgage rates, according
to data released on Wednesday by
a U.S. mortgage industry group.
These low rates will likely buttress
a robust housing market, which has
been a persistent bright spot in
a sluggish U.S. economy. Buying
a home is also increasingly seen
as a safer investment than the currently
floundering stock market.
Last year, lenders issued about
$1.2 trillion in mortgages to homeowners
to refinance their existing loans.
The Mortgage Bankers Association
of America's weekly reading of refinancing
activities, on a seasonally adjusted
basis, rose to 2,504.8 for the week
ended June 21, up a whopping 42
percent from the prior week. The
refinance index hit its highest
level since 2,768.3 for the Jan.
23 week.
Refinancing applications made up
half of the mortgage requests filed
last week, up from the prior week's
43.6 percent, the group said. The
group's index on new mortgage applications
for home purchases posted its second-highest
reading ever at 396.5, up 10.4 percent
from the previous week. The record
high for the index is 414, set in
the week ended May 31. On Thursday
of last week, the government reported
that new home sales rose 8.1 percent
in May to a record annualized rate
of 1.028 million units. May sales
of existing homes, five times bigger
than the new home market, dipped
0.3 percent to a still strong 5.75
million annualized units.
Strong
weekly increases in new applications
for refinancing and home purchases
pushed the groups mortgage market
index to its highest level in five
months, at 705.8, up 24.8 percent
from the previous week.
Most
mortgage interest rates, indexed
against Treasury yields, are approaching
record lows. More borrowers have
been favoring adjustable-rate mortgages
over fixed-rate loans, as one-year
rates are running more than two
full percentage points lower than
30-year rates. The share of adjustable-rate
applications last week was 18.6
percent, up from the prior week's
18 percent. With the hot housing
market in many areas, the industry
is also witnessing fixed rate to
an adjustable mortgage at a lower
rate for those planning on selling
their property in the near future
to lower their overall household
expense. But if a borrower plans
to stay in a home for a while, it
pays in the long run to lock in
a low rate with a fixed-rate mortgage,
rather than facing higher rates
down the road with a floating-rate
mortgage.
Consumers
refinance for many reasons. Lowering
their monthly payments is without
a doubt the most popular reason.
The mortgage industry has also seen
many 15 year “retirement refi-strategies”
employed recently to accelerate
the time frame for the repayment
of the mortgage.
The
purpose of this newsletter is not
to give legal or tax advice. The
purpose is to stimulate thought
for our clients and those professionals
we network with. The loan professional
that has made this information available
specializes in providing financial
solutions for those buying, selling
or refinancing real estate.
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