ARAMCO Report - The Mother of ALL Mortgage Blogs!

ARAMCO Report - Monday June 1, 2015

Posted by The Aramco Group on Mon, Jun 1, 2015 @ 16:06 PM

Weaker Economic Data Supportive of Low Interest Rates

Recent weak reports—about the GDP contracting and consumer sentiment going down—support a low interest rate environment. 

The negative reports from the U.S. Commerce Department and the University of Michigan Consumer Sentiment Index contributed to a mild flight to safety rally on Friday May 29, 2015 that drove down 10-year T-Bill yields and mortgage rates.

The most impactful contributing report was the Commerce Department’s revised quarter-one GDP figures that showed the economy contracted 0.7 percent. While this is less than the 1.0 percent revision economist expected, it may nonetheless spoil hopes that the country would have grown an average of 3.0 percent over the last 12 months.

The University of Michigan’s announced on the same day that its Consumer Sentiment Index also fell to May reading of 90.7, from 95.9 in April. This is a six-month low for the index.

Housing data is a silver lining however as the unfavorable economic data supports the Fed’s continued patience in not yet raising short-term interest rates, which promotes buyer demand.

People looking to buy a home will find mortgage rates near all-time lows with conforming no point 30-year fixed rates averaging 3.75 percent and 15-year rates averaging 3.00 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: Interest Rates, U.S. economy, GDP, 30 year fixed rates, interest, economic data, U.S. Department of Commerce, University of Michigan

ARAMCO Report - Thursday March 26, 2015

Posted by The Aramco Group on Thu, Mar 26, 2015 @ 14:03 PM

Investors looked to the security of U.S. government bonds after the Commerce Department reported a weaker than expected uptick in GDP in the fourth quarter. T Bills strengthened for the first time in three days. Economists at the U.S. Department of Commerce expected that the country’s GDP to grew at 2.4% over the whole of 2014, but downgraded their estimate to 2.2 percent. The difference of 0.2 percent of the U.S.’s $16.7 trillion GDP (2013 estimate) is about $33.4 billion less than expected. With the bond market closing in positive territory, conforming no point 30-year fixed rates remain at around 3.75 percent while 15-year rates are averaging 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: bonds, Treasury, bond market, GDP, bond buying, 30 year fixed rates

ARAMCO Report - Friday January 30, 2015

Posted by The Aramco Group on Mon, Feb 2, 2015 @ 11:02 AM

Another big sell off in stocks sparked a flight to safety rally in bonds pushing the yield on 30 year treasuries to an all-time low of 2.243%. The benchmark 10 year note yield recorded its largest one month decline since mid-2011 now at 1.673%. The catalyst behind the move was a much lower than expected 2.6% increase in 4th quarter GDP. Conforming no point 30 year fixed mortgage rates average 3 5/8ths with 15 year rates closer to 2 7/8ths.

And now for something completely different…  Did you know that there is only one ATM machine in the world that is capable of giving instructions in Latin. This one and only Latin speaking ATM machine is in Vatican City.

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: GDP, bond buying, Stocks, Latin, Bond yields, sell-off, ATM, Vatican City

ARAMCO Report -Friday September 26, 2014

Posted by Mehran Aram on Fri, Sep 26, 2014 @ 17:09 PM

A larger than expected 4.6% growth in the 2nd quarter GDP and a rise in consumer confidence gave the stock market a boost on Friday. But it did not spark a selloff in bonds, leaving mortgage rates unchanged. Conforming no point 30 year fixed rates average 4 1/4% with 15 year rates closer to 3 3/8ths. Meanwhile according to Realty Trac, year over year the share of home sales at or below $200,000 was down 9% while sales for over $500,000 rose 23%.

And now for something completely different: Did you know that there are so many restaurants in New York City that you can eat at a different place everyday for 12 years and never visit the same place twice? That’s amazing!!

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 sales, Reverse Mortgage, and now for something completely different, bonds, Realty Trac, GDP, 30 year fixed rates, New York City, Mortgage rates, consumer, restaurants

Of GDP, QE3, and HLR (Home Loan Rates)

Posted by The Aramco Group on Fri, Feb 24, 2012 @ 15:02 PM

If at first you don't succeed, try, try again.

That popular idiom could be applied to the Advance Gross Domestic Product (GDP) reading – the first of three readings – for the 4th Quarter of 2011. That reading came in at 2.8%, a bit below the expected 3.2%. This number will be revised two more times, but if the final GDP remains at 2.8% then the overall GDP for 2011 would be a paltry 1.57%.

That's not much.

GDP represents the market value of all of the goods and services produced within a country in a given period and is an indicator of our standard of living. So 1.57% would certainly put the "gross" our Gross Domestic Product, especially when you consider that the government has underwritten more than half of that economic growth with the Payroll Tax benefit.

What's more, in addition to being subsidized by the government's Payroll Tax Holiday, the GDP reading was driven mainly by a buildup in inventory (retailers buying from wholesalers), NOT by consumer sales. It would be quite reasonable to see this trend reverse in the first part of 2012, which would make for a weaker GDP reading. And a weaker GDP reading will make a third round of quantitative easing (QE3) a virtual lock.

(This definition of quantitative easing is courtesy of Investopedia: "A government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.")

So why is this significant and what does it have to do with home loan rates?

First, it's important to understand that home loan rates are tied to mortgage bonds, and when bonds improve, home loan rates typically move lower. (All bets are off currently, however, due to the unresolved Greek debt crisis, of which I've written on numerous occasions.) History has shown that bonds improve in anticipation of quantitative easing, then selloff once the official announcement is made. Think about the old investing adage: "Buy on the rumor and sell on the news."

If rumors of QE3 continue to swirl, we should continue to see great home loan rates leading up to any actual announcement. And even if the Fed doesn't pull the trigger on QE3, rates will likely remain attractive as the continuing debt problems in Europe will make U.S. bonds a safe haven for investors.

The bottom line is that now remains a great time to purchase or refinance a home. If you have any questions or need any help navigating today's opportunities, call or email me anytime. I would love to meet you and help you get the lowest possible rate for your purchase or refinance.

Topics: mortgage interest rates, Greek Debt Crisis, European Union, mortgage backed securities, GDP, economic data