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Higher interest rates looming

Posted by The Aramco Group on Sun, Jul 19, 2015 @ 14:07 PM

Federal Reserve Chairwoman Janet Yellen spoke out for the first time since international economic events in Greece and China caused uncertainty about the future of global financial stability. Her comments signaled that it might be time for a rate hike later this year.

With the European Union in turmoil over the Greek default and China reeling over a stock market tumble, the Fed reaffirmed its intention to raise short-term interest rates within the next several months. Ms. Yellen claimed that the rate increase would be a step to “begin normalizing monetary policy.”

Borrowers with adjustable mortgages tied to short-term interest rates may see in increase in monthly payments. Consumers who foresee paying a higher interest rate may want to consider refinancing to take advantage of the stability of a fixed-rate mortgage with today’s conforming no point 30-year fixed rates averaging 4.125 percent and 15-year fixed rates averaging 3.25 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381–8888 and your question may be featured in an upcoming article.

Topics: Interest Rates, Janet Yellen, Fed Chairwoman

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 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 - Tuesday February 24, 2015

Posted by The Aramco Group on Wed, Feb 25, 2015 @ 09:02 AM

In her semiannual testimony to lawmakers Federal Reserve Chairwoman Janet Yellen sent a clear signal to investors, not to expect a rate increase anytime soon. Both stocks and bonds rallied and mortgage rates fell by a 1/8th of a % with conforming no point 30 year fixed rates averaging 3 3/4s and 15 year rates closer to 3%. Meanwhile according to the S&P Case-Shiller, year over year December home prices for San Diego County rose by 4.8%. In San Francisco prices rose by 9.3%. And now for something completely different… Did you know that the Coca-Cola Company makes so many different beverages worldwide, that if you drank one per day, it would take you over 9 years to try them all?

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: home prices, San Diego, Interest Rates, Janet Yellen, Fed Chairwoman, 30 year fixed rates, Coca-Cola

ARAMCO Report - Monday August 25, 2014

Posted by Mehran Aram on Mon, Aug 25, 2014 @ 17:08 PM

According to a recent report from the Federal Reserve Bank of Chicago, U.S. economic activity in July expanded at a rate above its historical trend. While Fed Chairwoman Janet Yellen continues to outline positive news in the job market as support for the Fed increasing rates, the bond market remained relatively unchanged on Monday. 30-year fixed rates remain at around 4.125% while 15-year rates average 3.25%.

And now for something, completely different: Did you know that the average American is more than $200,000 in debt? And to top that, most Americans have less than $500 in savings.

For more information on a home purchase, refinance, or a reverse mortgage, visit our website at www.ARAMCO.Biz or call me at (866) 700-0942.

This is Mehran Aram with today's ARAMCO Report.

Ask Mehran Aram

Topics: Aramco Financial, Aramco Report, home purchase, Federal Reserve Bank of Chicago, debt, savings, Aramco Mortgage, Janet Yellen, American, Fed Chairwoman, 30 year fixed rates