Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) gained +28 basis points from last Friday's close which caused 30 year fixed rates to move lower. We had a fairly light week in terms of the number of economic releases and there were no major U.S. Treasury auctions to guide bond trades. It was a very choppy week as MBS sold off on Monday (higher rates), rebounded Tuesday (lower rates) and then sold off again on Wednesday (higher rates). On Friday, MBS rallied (better rates). We had a mixed bag of housing data as Existing Home Sales were much stronger than expected, while New Home Sales were much weaker than expected. The Federal Reserve Open Market Committee (FOMC) released the minutes from their last meeting. While it didn't provide any clear direction on the Fed's time table to start reducing their monthly bond purchases, it did appear as though a larger percentage of the voting members were open to some sort of taper in September. Friday's rally gave you the best rates of the week. This was due to the Fed's Bullard making a comment that the Fed can "afford to be deliberate" about their timing of reducing their monthly bond purchases. The rally was accelerated by a much weaker than expected New Home Sales report.

Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) gained just +8 basis points from Wednesday's close. Which caused mortgage rates to move sideways. he FNMA Benchmark 4.0 MBS has traded in a fairly narrow range all day with only a 20BPS spread between our highs and our lows. Initial Weekly Jobless Claims came in at 336K which was higher than the consensus estimate of 322K. Plus the prior week was revised slightly higher. Still, the more closely watched four week moving average fell another 2,250. While this report did come in a little higher than expected (and that would normally be good for pricing), it was still below 340K and the prior revision wasn't as bad as some expected. The Leading Indicators were released at 10EDT and came in close to market expectations (0.6 vs est of 0.5) and did not have an impact on pricing. The continued concern over a Fed tapering in September kept pressure on MBS all day. We tested our new floor of support twice and it did hold both times which has kept MBS from selling off further.

Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) gained +62 basis points from Monday's close. This almost erased Monday's sell off of -68BPS, so far this week the net effect is that pricing is moving sideways. It was our second straight day of no major economic reports or Treasury auctions yesterday to guide traders. MBS moved upward right out of the gate, recovering some lost pricing after Monday's big sell-off. The reason for this? A temporary surge in demand from the emerging markets as fear of a Fed taper and subsequent higher U.S. rates, has the emerging markets scrambling to lock in some lower rates for their governments.

Mortgage Rates

Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) lost -68 basis points from Friday and closed at their worst levels of 2013 which means that you saw your highest rates of 2013. MBS started the day selling off (worse pricing for you) as speculation among bond traders that the Fed would begin tapering their monthly MBS purchases on Sept 18th continued to mount. There were no economic release or Treasury auctions. Once again, the stock market and bond market moved in the same direction (both sold off). If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Mortgage Rates

Mortgage Rates We have a very light week for economic releases with Existing Home Sales and Weekly Initial Jobless Claims being the most important. The most impactful events this week will not economic reports but Fed events. Wednesday's FOMC minutes will be a major driving force in pricing as traders look to see how much traction tapering talk had at the last FOMC meeting. Thursday and Friday the market will focus on the Jackson Hole Wyoming meeting as Central Bankers and economists from around the world attend the retreat. Traders will be focusing on any discussion on the timing of the Fed's tapering of bond purchases and who the next Fed Chair will be. Sentiment continues to mount that the Fed will taper in September. We will need some new commentary from the Fed's talking heads that changes trader's minds from expecting a taper in September to December for MBS to see any improvement in pricing.

Mortgage Rates

Lock Advice 7-Day Neutral 7-15 Day Locking 15-30 Day Locking Mortgage backed securities (MBS) lost-49 basis points from Wednesday's close which caused 30 year fixed rates to move upward. MBS have now lost a big -135BPS from Monday's open to yesterday's close. Once again, we started the day selling off before our first dose of economic data even hit due to the German Sund (there version of our U.S. Treasury 10 Year note) saw their yields shoot up on continued optimism for growth in Germany and in Europe. This zapped money out of U.S. bonds which caused MBS pricing to rise. Then, Initial Jobless Claims were much better than expected (320K vs estimates of 335K) and hit a 6 year low. This is the type of data that traders think will cause the Fed to taper in September which of course pressured MBS further. enough to reverse the course of the morning's sell off.The Home Builder's Index was much stronger than expected (59 vs est 56) could count on these moving in opposite directions? They actually have been moving inthe same direction more often than not since April. This tells us that these markets are not as tethered as they once were and in many cases operate independently of each other. The stock market was under pressure due to earnings reports from CISCO and Walmart. The bond market was down due to strength in Europe,a better than expected Initial Weekly Jobless Claims report - which in turn led to great speculation about the Fed tapering in September. We had a mixed bag of economic data this morning. Both Building Permits and Housing Starts improved from their prior reading but came ina litue lighter than market expectations. These reports do not have the same impact as they did 5 years ago and probably wont until we get some readings consistently above 1M. Unit Labor Costs rose, this is not a big market mover but needs to be closely watched moving forward. Ifthis is a trend, then it is inflationary in nature and therefore negatiw for bonds longer term. Non-Fann Productivity was much better than expected (0.9% vs 0.5%). Now, normally this would cause MBS to rally. Because bonds love strong productivity levels. But offsetting this data was the fact that the prior reading of 0.5% was revised downward to -1.7%. We still have our biggest report of the day, Consumer Sentiment hdex due out just before 10EDT today. Pre-Market Status: Neutral. Overall, MBS did not really move on this morning's data. It looks like our floor of support is going to hold for the second straight trading session. It is all on today's Consumer Sentiment Index reading this morning. If we get a stronger than expected number, then it could provide enough momentum for us to break below our support level which would be ugly for your pricing. lfwe get a weaker than expected number, we could make up some lost ground from yesterday.

Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Mortgage backed securities (MBS) gained a paltry +8 basis points from Tuesday's close which caused 30 year fixed rates to move sideways. Both the headline and core PPI numbers were lighter than expected. This is normally (and the term "normally" doesn't always apply in today's market place) positive for bonds as it shows very low inflation. But it was very close to market expectations (0.1% vs est of 0.2%) and did not materially impacting pricing as MBS had some headwinds from Europe. The Eurozone posted 0.3 percent growth in the second quarter of 2013 from the first, beating expectations for 0.2 percent growth and signaling the end of the longest recession in continental Europe in over 40 years. This better than expected news has helped to keep pressure on MBS pricing yesterday. MBS traded in a fairly narrow range that was only 23BPS wide from our highs to our lows of the day and were confined to trade within the trading channel. The stock market (as measured by the DOW) tanked -113.35 but MBS barely moved...just another data point that demonstrates that stocks and bonds are operating independently of each other.