ARAMCO Report - The Mother of ALL Mortgage Blogs!

ARAMCO Report - Tuesday May 26, 2015

Posted by The Aramco Group on Tue, May 26, 2015 @ 17:05 PM

Purchases out pace refinances, first time since December

More people sought mortgages in order to purchase a home during the month of April 2015 than did those who were looking to refinance according Ellie Mae — a mortgage processing company. This is the first month since December 2014 that purchases outpaced refinances.

Approximately 52 percent of mortgages were for purchases in April as opposed to the 47 percent that were for refinances.

Purchase originations should continue to outpace refinance applications as low interest rates tick up over the course of 2015. This is because the financial reasons that lead households to purchase a new home are different than the reasons households might seek to refinance.

Fed Chair Janet Yellen again corroborated on 5/22/15 that it will be “appropriate” for the Fed to raise interest rates later this year. This one of the primary reasons purchase originations should continue to outpace refinances for the rest of 2015 as a healthier economy and stronger labor market should offset potential homebuyer concern that mortgage rates will go up in the future.

Potential homebuyers or people currently looking to refinance will find current mortgage rates near all-time lows as conforming no point 30-year mortgage rates average 3.875 percent while 15-year rates average 3.125 percent.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Topics: Fed, Housing Market, Fed Chairwoman, 30 year fixed rates, Federal Reserve, Mortgage applications, Refinancing

ARAMCO Report - Wednesday May 14, 2015

Posted by The Aramco Group on Wed, May 13, 2015 @ 16:05 PM

How lower import prices may influence interest rates

Import prices for goods coming to the U.S. went down 0.3 percent in April 2015, according to The U.S. Department of Labor. This is after prices fell an adjusted 0.2 percent in March 2015, and in total have fallen 10.7 percent over the last 12 months. Lower oil prices and the strengthening of the U.S. dollar drove most of this decline.

The Federal Reserve is currently debating when it would be appropriate to raise short-term interest rates from their current level at 0.25 percent. The Fed is waiting for the U.S. economy will enter into a beneficial period of 2 percent annual inflation. Decreasing import prices are the opposite of inflation, however, so the Fed may continue to delay. Although there has been a recent uptick in bond yields and mortgage rates, low inflation rates would bode well for mortgage interest rates staying level.

Total mortgage application activity for both refinancing and home purchases fell 3.5 percent in the week ending May 8 according to The Mortgage Bankers Association.

Potential homebuyers will find mortgage rates near historic lows. Conforming no point 30-year fixed mortgage rates average 3.875 percent, and 15-year rates average 3.125 percent. 

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: financial recovery, Interest Rates, Fed, Fed Chairwoman, 30 year fixed rates, economic growth, Federal Reserve, inflation, economy

ARAMCO Report - Thursday April 30, 2015

Posted by The Aramco Group on Thu, Apr 30, 2015 @ 15:04 PM

Inflation hoped for by Fed, shows slight rise

Minutes from the Federal Reserve’s last meeting, released April 29, 2015, maintained the bank’s optimistic tone about the economy despite a weak first quarter this year. Labor statistics and related economic indicators in particular continued to move toward fulfilling the Federal Reserve’s expectations about inflation.

According to a report from the Labor Department, released on 4/30/15, the cost of employing the average U.S. worker climbed 0.7 percent in the first quarter of 2015. This is one of the most closely watched measures of wage inflation, and employment costs have risen 2.6 percent over the past 12 months.

The Federal Reserve’s ten committee members voted unanimously to keep short-term interest rates between 0.0 – 0.25 percent in April, where it has been since December of 2008, but they left a summer rate hike on the table. The Fed will be gauging reports like this one and the two major upcoming jobs reports before its next meeting in June.

As for long-term interest rates, homebuyers and homeowners looking to refinance will find that conforming no point 30-year fixed mortgages average 3.75 percent while 15-year mortgages average 3.0 percent.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: Interest Rates, Fed, Labor Department, Department of Labor, 30 year fixed rates, Federal Reserve, Wages

ARAMCO Report - Tuesday April 14, 2015

Posted by The Aramco Group on Tue, Apr 14, 2015 @ 15:04 PM

How retail spending can relate to mortgages

The Commerce Department reported that American retail sales rose 0.9 percent (seasonally adjusted) in March 2015 from the previous month due to strong auto sales. This is the strongest gain in the last calendar year. Retail sales levels can reflect two things: the financial liquidity and confidence of the end consumer, and the stabilization of the prices that manufacturers charge. Both types of information are good barometers for the general economy, and are parts of what The Fed will base its decision on when it decides to raise interest rates. There are markets for Fed futures, which are financial contracts that let investors indirectly and fluidly price when they expect the Fed will raise interest rates. The market currently prices the first interest rate hike in December of this year.  Those interest rates, when they increase, will have an immediate correlation to mortgage rates.  The Fannie Mae 30-year 3 percent bond’s yields stayed flat yesterday, and so did average mortgage rates. Conforming no point 30-year fixed rates averaged 3.75 percent while 15-year rates averaged 3.0 percent. 

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: mortgage interest rates, Fed, 30 year fixed rates, Bond yields, mortgage, Federal Reserve, Mortgage Market, retail sales, Mortgage rates

ARAMCO Report - Wednesday April 8, 2015

Posted by The Aramco Group on Wed, Apr 8, 2015 @ 15:04 PM

Meeting minutes from the Federal Reserve, released today, revealed that “several” of the Bank’s members thought they could raise interest rates in June. However, these opinions might be slightly out of date: minutes are officially released three weeks after a meeting, and a weak jobs report released one week ago is largely anticipated to have changed minds. Look for a change in rates closer to September. Meanwhile, interest rates took a slight dip during the last two weeks, and mortgage applications went up because of it. Mortgage application activity for home purchase is one of the strongest predictors of future home sales, and the gauge for these loan requests was at its highest week-over-week levels since July 2013. According to the Mortgage Bankers Association applications for such loans greatly outperformed refinance applications: the former rose 6.8 percent during the week that ended April 3rd. Current conforming no point 30 year fixed mortgage rates average 3.75 percent while 15-year rates average 3.0 percent.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: Interest Rates, Fed, 30 year fixed rates, Federal Reserve, Mortgage Market, Mortgage applications, Mortgage Bankers Association

ARAMCO Report - Thursday March 19, 2015

Posted by The Aramco Group on Thu, Mar 19, 2015 @ 19:03 PM

The Federal Reserve (The Fed) triggered an impressive bond market rally in the middle of this week that pushed mortgage rates down one eighth of a percent. The result is that conforming no point 30 year fixed mortgage rates now average 3.75 percent with 15 year rates closer to 3 percent. The Fed triggered the rally by committing to a gradual path to raising its rates in 2015 due to revised down projections for growth and inflation. Inflation is a general measurement of the amount of money transferring hands and is a proxy for overall gainfulness of employment in the U.S. Jobs are up but inflation has been below targets for 34 straight months. The Consumer Price Index currently estimates inflation at -.o1 percent since January 2014 versus the Fed’s goal of approximately 2% per year by 2017. Interest rates should stay low for the medium term as the bank continues to shepherd the economy upward. Expect rates to rise in the summer, and for them to stay below 1 percent for the rest of 2015. 

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at Aramco.Biz or call me at (877) 700-0942. This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

 

Topics: financial recovery, Consumer Price Index, CPI, Interest Rates, Fed, Fed Chairwoman, 30 year fixed rates, economic growth, Federal Reserve, inflation, economy

ARAMCO Report - Wednesday July 30, 2014

Posted by Mehran Aram on Wed, Jul 30, 2014 @ 17:07 PM

A stronger than expected 4% annual growth rate in 2nd quarter GDP sparked a sell off in the bond market, pushing mortgage rates up by 1/8th of a %. With conforming no point 30 year fixed rates closer to 4 1/4 % and 15 year rates closer to 3 1/4. Meanwhile the Federal Reserve said the U.S. economy is improving and the risks of deflation are disappearing. The Fed did cut back its monthly bond buying by another $10 billion while committing to keep interest rates low for a considerable time.

And now for something, completely different: Did you know that Japan has approximately 200 volcanoes? Japan is home to 10% of the active volcanoes in the world!

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at www.ARAMCO.Biz or call me at (877) 700-0942.

This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: Reverse Mortgage, Aramco Report, and now for something completely different, Interest Rates, Fed, U.S. economy, bond buying, 30 year fixed rates, Federal Reserve, Japan, annual growth, volcanoes