Scott Storace - Branch Manager, 100 Pacifica Drive Ste. 140, Irvine CA 92618 NMLS #226339 949.973.0141

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  • Home Loans up to $3,000,000
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Mortgage Market Report 5/16/12: Orange County, CA

This mortgage market report will provide the data and insight from trading on Wall Street. Interest rates are derived from the yield on mortgage backed securities (bonds). When the pricing of mortgage backed securities (MBS) goes up you can expect lower interest rates. When MBS pricing goes down, expect higher pricing on interest rates for home mortgages. 

Mortgage applications for the week ending May 11th rose 9.2% on a 13.0% spike in refinance applications.  New purchase applications fell 2.4%.  Mortgage rates continue to be at or near record-low levels with the Freddie Mac composite 30yr fixed rate mortgage now at 3.75%.  Housing starts jumped from 699k to 717k in April.  While housing starts remain at a low level, the trend is positive.  Taking a little steam from the better starts report was a drop in building permits.  Permits fell from 769k to 715k for the month.   At 1:00 pm CST, all eyes will be on the Minutes from the April FOMC meeting.  We do not expect the Minutes to make much news, but there’s always the chance.  The Fed seemed to halt a third round of quantitative easing during the April meeting given the uptick in the Winter economic data.  Any hint today that they are still considering it in the near future would definitely receive a market reaction.  However, with the 10yr Treasury already trading below 1.80% from the flight-from-Europe mess, it’s hard to imagine such a revelation having a big impact either way.  The Fed could not be clearer about its intent to keep rates low for the future, and if that’s not enough, the domestic economy and Europe are making sure of it.  10yr Treasuries are still lingering near 1.80% this morning and next resistance is at 1.75%, the bottom of a 2.5 month bullish rate channel which we failed against each day this week.  Key resistance is 1.75% and then 1.672%, the Sept. 2011 low print.  Support is now 1.94%-1.95% with better support up at 2.14%.  Daily momentum is back to mixed and still overbought.  These levels are still very strong so no one will think differently about you by taking advantage of current rates. Better safe than sorry!

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