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

"From the minute you call me to the minute we close, I have your back. No hassles, no banker’s hours & quick response times." - Scott Storace

  • Home Loans up to $3,000,000
  • Interest Rate Float Down Option
 

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Mortgage Market Report 5/23/12: 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. 

Just when we thought Europe was on the back burner, Greek’s Prime Minister turned up the heat.  Comments about making preparations to leave the Eurozone  have sent shivers throughout global markets.  Stateside traders traded the headline by selling stocks (Dow off 170 points) and buying bonds, notes, etc as flight to quality and safety is in vogue.  Overseas markets in the German Bund and UK Guild ( 10 year fixed notes) are on pace to set historic low yields at the close.  Our 10 year note dropped from 1.78% to 1.71% in a nano second.  Mortgage backed securities are having a good day, up 7/32’s across the interest rate stack.  

Earlier today, the FHFA Home Price Index rose 1.8%, its biggest monthly gain since 1991 with the Pacific area of our country leading the way at plus 3.1%.  Good news for the good guys (and gals).  April New Home Sales were also released, up 3.3%.  The gain was a touch higher than consensus at 343K versus 335K.  Monthly supply of new homes fell to 5.1 months, a good sign than a recovery due to additional household formation is underway.  Technically, the market looked and traded bearishly yesterday and then came right back in your face today (rally).  Traders call this a bear trap.  What we have really accomplished is neutralizing the market while leaning to the bullish side (expecting better mortgage pricing).  We felt the market was consolidating and at some point would continue the rally.  Just didn’t think it would be today.  This also shows you how fickle the market can be and how it can change on a dime.  Use the rallies to your benefit and hit the float down button as you just don’t know what tomorrow will bring.  Just out are details of the today’s 5 year note auction.  35 billion of these puppies crossed the block. Overall, a nice auction.  We’ll give it a B.

Scott Eggen                                                                                                                                                                            SVP Capital Markets

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