We are opening up with a relatively unchanged market from yesterday’s close and while we are approaching the 2.00% level on the 10yr (1.98% to be exact) I believe all-in-all the bond/mortgages markets are holding up pretty well in light of the recent events. There is still buzz in the air regarding Friday’s NFP monster number and it appears that there will eventually be a resolution on a Greece bail-out plan. Both things would weigh on the bond markets but it would be really hard and irrational complaining about a 2.00% 10yr. This is still an extremely low rate environment and one that is very conducive to loan originations.
In regard to the NFP number the talk is that the Fed might have understated the strength underlying our economy. That is a fair argument considering that the Fed stated they would keep rates low thru at least the end on 2014. There is little doubt that our economy has consistently showed promising signs but the thought here is that the Fed is very concerned about Europe and its impact on our economy. Also they are very much aware of the surplus of foreclosed properties that need to be redistributed before there is any serious thoughts of an true economic rebound. However like I mentioned this is a great environment for originating loans and this week’s MBA Weekly Application Survey clearly shows that. Here are the highlights:
- Applications rose 7.5% from the prior week
- Refi Index increased 9.4%
- Purcahse Index had a marginal increase of .1%
- The refi share increased to 80.5% from 80.0%
- The ARM share increased to 6.0% from 5.6%
- During the month of January the investor share was 6.4% which was a decrease from 6.9% in December
- During the month of January the second home share increased to 5.9% from 5.4% in December
- All average interest rates set records for the lowest rate in the history of the survey.
- The conforming 30yr was 4.05% w/.44pts
- The FHA 30yr was 3.89% w/.78pts
- The conforming 15yr was 3.33% w/.37pts
Like I said….good time to be an originator.