New Homes Data Shows More Gains:

The Commerce Department said Thursday that builders broke ground on a seasonally adjusted annual rate of 699,000 homes in January. That's up 1.5 percent from December and reached the highest level since December 2008. Construction began work on 508,000 single-family homes last month and December single-family homes were revised up strongly to show builders started 513,000 homes — a 12 percent gain from November.

In a separate report, building permits, a gauge of future construction, rose 0.7 percent. The majority of those permits were for single-family homes. It can take 12 months for a builder to obtain a permit and construct a single-family home.

In a third report released last week, A measure of builder sentiment has risen for five straight months and is now at its highest level in nearly five years. Many builders are seeing more people express interest in buying a home, leading them to believe 2012 could be a turn-around year for the market. Mortgage rates have never been cheaper. And home sales started to rise at the end of last year.

What Happened to Rates Last Week?

Mortgage backed securities (MBS) lost just 7 basis points from last Friday to the prior Friday which moved mortgage rates sideways on a week-over-week basis.  But MBS pulled back -65 basis points from our best levels on Wednesday.  This means that mortgage rates were much higher on Friday than on Wednesday.
The reason for the big change in direction?  Greece is the word.
Mortgage rates are artificially low due in large part to fear and concern about several members of the European Union defaulting.  This has lead overseas investors to pour money into the safe-haven of our mortgage-backed-securities and as a result of that increased demand, mortgage rates fell.
MBS sold off (less demand, which equates to higher rates) after the European Central Bank announced that they would hold a "bond swap" for those that own the worthless Greek debt.  This was seen as the last step that was needed to get Greece the next round of bailout money.

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. 

Quote of the week:

Ian Shepherdson, chief U.S. economist at High Frequency Economics 

Brought to you by:

Quentin Keefe
Loan Officer
Office: 603-669-5626
Cell: 603-321-6730
qkeefe@regencymtg.com

Regency Mortgage Corp.
175 Canal Street
Manchester, NH 03101
NMLS # 8158

www.regencymtg.com

Consumer Sentiment Moves off of Highs:

Americans turned less optimistic about the economy in early February on worries about falling income even as their outlook on the jobs market rose to a record high, a survey released on Friday showed.

The Thomson Reuters/University of Michigan Index of Consumer Sentiment fell back in February with a preliminary score of 72.5 that is 2.5 pts lower than January's score of 75.

Current conditions, and more precisely a negative tone towards current finances, was the heaviest drag. Even though optimism towards the job market kept up, the CSI was unable to hang on to sentiment expressed last month. Market expectations averaged to 74.5.

The optimism in their job outlook is encouraging though and is certainly reflective of the steady string of better than expected Initial Weekly Jobless Claims and the recent decline in the national Unemployment Rate.  As these trends in lower Unemployment continue, look for the Consumer Sentiment to regain some ground.

What Happened to Rates Last Week?

Mortgage backed securities (MBS) lost -26 basis points from last Friday to the prior Friday which moved mortgage rates higher on a week-over-week basis.  That also marked a -68 basis point drop in MBS pricing from our all time high on 02/02/12.
Mortgage backed securities (and therefore mortgage rates) moved sideways during the week with only minor movements in reaction to the 10 year and 30 year U.S. Treasury auctions.  But MBS did sell off on Friday on news that Greece would come through with another austerity package that would qualify them for additional bailout funds.
The Greek story has been an important one for mortgage rates.  Mortgage rates are artificially too low due to increased demand for U.S. bonds as a pure "safety play" against a European financial collapse.  A default by Greece would start a "domino effect" of other countries defaults too.  So, any positive news that a default is postponed will cause our rates to increase.

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. 

Quote of the week:

Banking Analyst Dick Bove 

Brought to you by:

Quentin Keefe
Loan Officer
Office: 603-669-5626
Cell: 603-321-6730
qkeefe@regencymtg.com

Regency Mortgage Corp.
175 Canal Street
Manchester, NH 03101
NMLS # 8158

www.regencymtg.com

Housing Market Picture Brightens with Job Gains:

The pace of job creation surged in January, with the US economy generating 243,000 new positions while the unemployment rate dropped to 8.3 percent, according to government data released Friday.

Both numbers were far better than the consensus estimates, which expected a growth of 150,000 jobs and a steady unemployment rate of 8.5 percent.

Job gains have been concentrated primarily in the service sector, particularly in retail and the food and beverage industries. Warehousing, manufacturing, mining and health care also have participated.

True to form, services were responsible for 162,000 of the January swell, with manufacturing payrolls growing 50,000. Government cuts subtracted 14,000 from the total. Retail has added 390,000 jobs since December 2009, while durable goods manufacturing is up 418,000 over the past two years, according to government figures.

Housing demand is driven primarily by two factors (neither is interest rate): Consumer Sentiment and Employment Stability.  So, the surprisingly strong Nonfarm Payroll data is certainly good news for the housing industry.

What Happened to Rates Last Week?

Mortgage backed securities (MBS) gained just +4 basis points from last Friday to the prior Friday which moved mortgage rates sideways on a week-over-week basis.
But the real story was that on Thursday MBS shot up to their highest levels (and therefore lowest mortgage rates) ever as the benchmark Fannie Mae 3.5% coupon traded at its highest level since it has been issued.
But MBS sold off of their highs and had a major reversal on Friday which moved mortgage rates upward from Thursday's level on the much better than expected Unemployment Rate and Nonfarm Payroll data.

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. 

Quote of the week:

Depeche Mode 

Brought to you by:

Quentin Keefe
Loan Officer
Office: 603-669-5626
Cell: 603-321-6730
qkeefe@regencymtg.com

Regency Mortgage Corp.
175 Canal Street
Manchester, NH 03101
NMLS # 8158

www.regencymtg.com

Existing Home Sales Rose 5% in December:

Home sales rose in December to the highest pace in nearly a year. The gain coincides with other signs that show the troubled housing market improved at the end of last year.

The National Association of Realtors said Friday that sales increased 5 percent last month to a seasonally adjusted annual rate of 4.61 million, the best level since January 2011 and the third straight monthly increase.

Sales are increasing at a time when the market is flashing other positive signs. Mortgage rates are at record-low levels. Homebuilders have grown slightly less pessimistic because more people are saying they might be open to buying a home this year. And home construction picked up in the final quarter of last year.

The median sales price rose 2.3 percent to $164,500 in December.

What Happened to Rates Last Week?

Mortgage backed securities (MBS) lost -91 basis points from last Friday to the prior Friday which moved mortgage rates upward.
The biggest economic surprise was the large decrease in the weekly Initial Jobless Claims data which is certainly positive for the economy, but negative for bonds.
But the real catalyst was a change in market sentiment that Greece's bond holders were close to accepting the new terms of a "voluntary" hair cut of 60% to 70% on what they are owed. This removed some of the "fear factor" premium in bonds that have kept mortgage rates artificically low for the past 8 weeks. 

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. 

Quote of the week:

NAR President Moe Veissi

Brought to you by:

Quentin Keefe
Loan Officer
Office: 603-669-5626
Cell: 603-321-6730
qkeefe@regencymtg.com

Regency Mortgage Corp.
175 Canal Street
Manchester, NH 03101
NMLS # 8158