mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc

Home Prices Jump Most in Seven Years:

U.S. single-family home prices rose in March, racking up their best annual gain in nearly seven years as the housing recovery continues to provide a source of strength for the economy, a closely watched survey showed on Tuesday.

The S&P/Case-Shiller composite index of 20 metropolitan areas gained 1.1 percent in March on a seasonally adjusted basis, topping economists’ forecasts for 1 percent. Prices in the 20 cities jumped 10.9 percent year over year, beating expectations for 10.2 percent and the biggest increase since April 2006.

All 20 cities covered by the index saw yearly gains for the third month in a row. Average prices in March were back at their late-2003 levels.

For the first quarter of this year, the seasonally adjusted national index rose 3.9 percent, stronger than the 2.4 percent gain that was seen in the final quarter of last year.

What Happened to Rates Last Week?

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Mortgage backed securities (MBS) lost -83 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move upward for the third straight week. We had our highest mortgage rates on Friday and our lowest rates on Tuesday.

We had a very volatile week with large swings in MBS pricing. We traded in a very large range with a -166 BPS range between our highs and lows. Bonds (which include MBS) sold off on much better than expected Existing and New Home Sales, Initial Jobless Claims and Durable Goods Orders. So, mortgage rates were on a higher path last week.

But that was amplified by Ben Bernanke’s statements on Wednesday. As he discussed the potential to scale back on monthly MBS purchases if conditions continued to improve. Then, later that day, the minutes from the last FOMC meeting were released and it became clear that there is some discussion at the Fed of pulling back on MBS purchases as early as June. This caused bonds to sell off and pushed mortgage rates higher.

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.

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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.

mortgage broker denverVince Reece
Senior Loan Officer
Office: 303-840-0966
Cell: 303-818-0699
19519 E Parker Square Dr
Parker, CO 80134

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