News Reports This Morning State the U.S & China Are Close to Reaching a Trade Agreement
Happy Monday! 10-year yield closed over 2.56% on Friday vs 2.50% previous day; Dow gained 269 points and MBS decreased 22 bps. This morning the 10-year yield is 2.55% and yield curve has improved with the 3-month yield at 2.44%. The middle of the curve is inverted with 5-year at 2.37%. The 10-year is bouncing at the top of 2.47% to 2.55% range during April. A more important ceiling is around 2.60%.
This morning Chicago Federal President Evans stated in an interview that he feels rates should be left at current level until fall of 2020 to support sustained inflation.
News reports this morning state the U.S and China are close to final discussions regarding a trade agreement.
Among economic reports this week will be the home builders index on Tuesday, retail sales on Thursday and housing starts on Friday.
The Modern Mortgage Loan Originator uses Mortgage Coach and RateWatch. Dave wants to remind everyone of the contest in the Mortgage Coach Productivity Mastermind Group within Facebook: https://www.facebook.com/groups/INSANEPRODUCTIVITYwithMortgageCoach/
Cost of Waiting Analysis
-- Home Value annual increase 4% - 5% based on variety of reports including NAR, Case Shiller and MBA.
-- Mortgage rate environment flat for the next 3 months; points increase .4 at 3 months; rate increase .125% at 6 months and 12 months. Long-end of curve could stabilize based on economy. MBS and mortgage rates less apt for dramatic moves.
Cost of Waiting TCA with 30-year FRM at three, six- and twelve-month future periods (updated 4/11): https://mcedge.tv/1ceubg
Borrower discount points and Seller Concession in lieu of Price Reduction
-- Average sales price reduction is 3% - 5% versus asking price.
-- 10/1 and 7/1 ARMs gain .125% rate vs 30-year FRM through stack; 7/1 may also gain 40+ bps at 1%+ discount stack
-- 5/1 ARM gain .25% rate vs 30-year through stack;
Seller Concession TCA with concession used within discount points to lower the interest rate (updated 4/11): https://mcedge.tv/1ceut3
Seller Concession TCA including ARMs with concession utilized by borrower at 2% discount (updated 4/11): https://mcedge.tv/1ceu87
Borrower paid discount TCA 30-year FRM at PAR, 1% and 2% discount; 10/1 ARM at 2% discount (updated 4/11): https://mcedge.tv/1ceu98
Rent versus own TCA including worsening rates and increasing rent: https://mcedge.tv/1celkq
Have a great day!