Guest Post – Tradition Mortgage’s Weekly Update November 2, 2015

Rates Tick Up on Fed Comments

Central banks around the world have had a heavy influence on mortgage rates recently. In the previous weeks, the European Central Bank’s (ECB) plan to expand its bond buying program had a favorable effect, while China’s policy changes had an offsetting effect. This week, it was the U.S. Fed. Even though many recent economic reports in the U.S. contained signs of a slowing economy, the Fed statement explicitly kept the door open for a federal funds rate hike at its December meeting. The hawkish tone surprised investors and caused an unfavorable reaction in mortgage rates.

US Gross Domestic Product numbers were down slightly, however the weakness in the third quarter was mostly due to changes in inventories. A decline in inventories offset 1.4% of growth during the third quarter, meaning that GDP would have increased nearly 3.0% if inventory levels had simply held steady. Similar to last year, GDP growth has averaged a reasonable 2.0% this year, and may be further consideration for a Fed rate bump in December.


Week Ahead: The important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. With a possible rate hike in December, there might be a larger than usual reaction to incoming economic data.

Volatility:        Moderate
Trend:              Higher

Today’s rate snapshot: 30-day lock rates as of 11/02/2015 8:50AM:
30-year Fixed (conforming):      3.875% (3.99%APR*) .125 higher thank last week
15-year fixed (conforming):       3.125% (3.25% APR*) .125 higher thank last week
7-year ARM (conforming)          3.375% (3.49% APR*) .125 higher thank last week
30-year Fixed (jumbo)               3.875% (3.99% APR**) .125 higher thank last week

*Based on 70% LTV, primary residence, rate and term refinance and purchase, 175k minimum loan size, 30-day lock. Rates subject to change at any time based on bond market pricing fluctuations. **Minimum loan size for a jumbo loan is $418,000.  This information is intended for professional reference only, and not intended for consumer use. Additional qualifications and disclosures apply.

Have a great week!

Jim Krantz
Vice President
NMLS # 761955
Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489

Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 /