Hope you all had a good weekend!

Trading activity has almost ground to a standstill in the mortgage market as investors choose to take a cautious “wait-and-see” approach in front of the last Federal Open Market Committee meeting of 2009. The text and tone of the Committee’s post-meeting statement (scheduled for release at 2:15 p.m. ET, Wednesday, December 16th) will contribute significantly to the trend trajectory of mortgage interest rates up and through the Christmas break.

Any hint that the central bank is considering backing off of its asset purchase programs, or perhaps mulling an increase in its benchmark short-term interest rates will likely send mortgage interest rates notably higher. While it is worth noting this risk exists — the probability of such an outcome is exceptionally low. —Larry Baer

Today’s Urban Austin Mortgage Rates:
30yr fixed- 4.625% 0+1.25
15yr fixed- 4.125% 0+1.25
FHA/VA- 4.75% 0+1.25
USDA 100% financing- 4.75% 0+1.25

*These low rates are ONLY offered through Urban Austin Mortgage. The application process is FREE, simple and you can receive an approval in just a few hours. Let’s get to work!

Respectfully,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph
Austin, TX Home Loan – Quick Application

Happy Friday, everyone!

Selling pressure in the mortgage market surged this morning driven by a report from the Commerce Department indicating November Retail Sales increased 1.3%, its largest advance since August, after rising 1.1% in October. It was the second straight monthly gain for overall retail sales and handily beat market expectations for a 0.7% gain. Compared to last year, overall retail sales were up 1.9%, the first year-on-year gain since August 2008. Excluding autos, retails sales increased 1.2% last month, the largest increase since January.

As the day progresses I look for calmer, cooler heads to conclude that a significant amount of the surge in the pace of November sales was created through heavy discounting by retailers attempting to get a head-start on the holiday season. There is still a big question mark attached to the retail sales data regarding the sustainability of November’s solid performance. Fundamentally, conditions remain poor for consumers. Wage income is more than 3.0% below its year-ago level and there is little chance of improvement in that figure until the labor sector once again begins to produce more jobs than it looses on a month-over-month basis. In a nutshell — in my judgment it is unlikely this report is as threatening to the prospects of steady to perhaps fractionally lower mortgage interest rates as many “talking-heads” are currently trying to make it out to be. —Larry Baer

Today’s Urban Austin Mortgage Rates:
30yr fixed- 4.625% 0+1.5
15yr fixed- 4.125% 0+1.5
FHA/VA- 4.75% 0+1.5
USDA 100% financing- 4.75% 0+1.5

*These low rates are ONLY offered through Urban Austin Mortgage. The application process is FREE, simple and you can receive an approval in just a few hours. Let’s get to work!

Respectfully,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph
Austin, TX Home Loan – Quick Application

I sincerely hope your Monday is going well and you caught up on some rest this weekend.

With nothing on the economic calendar to stir trading activity — mortgage investors are generally marking time ahead of the three-part, $71 billion Treasury debt auction scheduled for Tuesday through Thursday. Believe it or not, last week’s heavy sell-off in the government debt market has probably limited the upward pressure this event might have otherwise exerted on mortgage interest rates over the course of the next five business days.

Mortgage investors will be intently watching the Treasury auction results for any sign that a change in market psychology occurred in conjunction with last Friday’s dramatically improved labor market story — or for an indication skepticism about the sustainability of the budding economic recovery remains high among credit market participants.

Given strong seasonal demand and the sharp price mark downs of last week, I think there is a reasonable chance overall demand for this week’s government debt offerings will be decent. Should my assessment prove accurate, the Treasury auctions will tend to be supportive of at least steady mortgage interest rates — with an outside chance rates will find the traction necessary to move to fractionally lower levels. —Larry Baer

The economic release of most interest to mortgage investors — the November Retail Sales report — does not arrive until Friday.

Easy Terms: Rates should hold steady this week.

Today’s Rates:
30yr fixed – 4.625% 0+1
15yr fixed – 4.25% 0+1
FHA/VA 30yr – 4.875% 0+1
USDA 100% financing – 4.875% 0+1

The application process is FREE and simple. Approval in just a few hours. Lets get to work!

Cheers,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph
Austin, TX Home Loan – Quick Application

SHORT-TERM TREND (10 days or less). Tilted slightly in favor of higher rates.

SUGGESTED PIPELINE STRATEGY: I recommend that you limit or preferably avoid initiating new “floating” loans in this category until/unless the price of the Fannie Mae 4.5% mortgage-backed security can muster the necessary momentum to close above a price of 102.281.

LONG-TERM TREND (11 days or more) Hovering at an important support level necessary to sustain a trend assessment favoring lower rates.
SUGGESTED PIPELINE STRATEGY: I recommend you initiate a “lock ‘em if you’ve got ‘em” pipeline risk management strategy for “floating” loans in this category as long as the price of the Fannie Mae 4.5% 30-year mortgage backed security trades below a price of 102.281.

——————————————————————————–

Commentary: The swoon in the mortgage market yesterday afternoon was primarily the result of capital flowing out of the relative safety of U.S. government debt obligations and mortgage-backed securities back into higher risk asset classes as market participants became increasingly convinced the Dubai story would not morph into a another major global financial crisis. Easy come – easy go.

Trading action so far today is being driven by a relatively few players moving light volume. As I write, there is nothing much going on to inspire more dynamic action between buyers and sellers.

According to a report released earlier this morning by ADP Employer Services, U.S. private employers cut 169,000 jobs from their payrolls in November which was fewer than the 195,000 jobs lost in October but more than the 155,000 jobs loss that most analysts had been anticipating the data would indicate. It was the eighth straight month of fewer job losses reported by ADP. It may not be exactly what market participants were looking for, but at least the trend is right.

The ADP report has been weaker than the government’s much more important Nonfarm Payroll figurers in nine of the past 11 months, with an average miss of -55,000. The probabilities remain high that Friday’s November nonfarm payroll will fall within shouting distance of the consensus estimate for a national job loss number of 130,000. If so, the Labor Department’s data will likely exert little if any influence on the mortgage market.

In their standard Wednesday report, for the week ended November 27th the Mortgage Bankers of America said their mortgage application index (a value that includes request for both purchase and refinance loans) was up 2.1% over the previous week. The purchase index was up 4.1% while the refinance index gained 1.7% from the week before. Refinance applications accounted for 72.1% of all applications. It was the first time in eight weeks that both the purchase and refinance indices increase from the previous week.

To sustain the current level of mortgage interest rates will likely require softer-than-expected November employment numbers on Friday and/or a major sell-off in the stock markets. While both outcomes are certainly possible – they are each in their own right not very probable.

In my judgment, Friday’s headline nonfarm payroll report will need to show the economy lost more than 150,000 jobs and/or the national jobless rate exceeded 10.3% last month in order to induce mortgage investors to push mortgage interest rates notably lower. In terms of stock market trading activity it will likely take a convincing move below the 10,200 mark for the Dow Jones Industrial Average before a sustained flow of capital out of the stock market could be counted on to support the prospects for notably lower mortgage interest rates.

By Larry Baer, Market Alert
_____________________________________________________
David Romero
Vice President / Loan Officer
ViewPoint Bankers Mortgage
Corporate
13101 Preston Rd. #100
Dallas, TX 75240
Phone: 972-792-4289 Ext 8303 | Fax: 972-692-8288
Email: david.romero@vpbmortgage.com
Web: http://www.dromeroloans.com

Friends,

I am going technical rather than upbeat today because we saw rates increase .125% since trading opened.

Following a stronger-than-expected weekly jobless claims number —mortgage investors were quick to push mortgage interest rates fractionally higher in the day’s early going.

“According to the Labor Department, new applications for jobless benefits unexpectedly fell by 5,000 last week to the lowest level in more than 14 months. While this jobless claims report falls outside of the survey period for tomorrow’s 8:30am ET release of the far more important November nonfarm payroll figures — some investors wasted no time placing their “bets” for a surprisingly mortgage market unfriendly employment story.

I personally think these mortgage investors may have jumped the gun a bit. Even though the first-time claims number was better than the majority of economist had anticipated — the number of people continuing to collect benefits after the initial week rose by 28,000. Going one step further, with hiring so slow, the unemployed are exhausting their regular benefits (26 weeks in most states) and instead are claiming extended benefits or Emergency Unemployment Compensation. Growing totals for these programs have more than offset the decline in the regular weekly jobless claims number. For the week ending November 14th, the enrollment in the extended benefits programs offered by the government grew by 323,000. From this perspective, the weekly jobless claims numbers are almost certainly glossing over the underlying anemic conditions in the labor market.

The probabilities remain high that Friday’s November nonfarm payroll will fall within shouting distance of the consensus estimate for a national job loss number of 130,000. If so, the Labor Department’s data will likely exert little, if any influence on the mortgage market. On the other hand, if the headline number shows the economy lost 150,000 jobs or more and/or the national jobless rate exceeds 10.3% — the odds are high that a large number of investors will be caught leaning the wrong way — resulting in higher prices and lower mortgage interest rates before the day is over.” —Larry Baer

My advice is to jump now and lock your rate. Waiting at this potentional transition point could back fire.

Today’s Rates:
30yr fixed- 4.75% 0+1
15yr fixed- 4.25% 0+1
FHA/VA 5.00% 0+0
USDA 100% financing 5.00%

Have a great day and I look forward to receiving your loan application!

Cheers,

D. Stephen Steakley, Jr.
Austin, Texas Home Loan Expert
512-577-8898 ph
Austin, TX Home Loan – Quick Application