Joseph-Brady.com

Philadelphia Mortgage Rates Report: September 24th, 2007 – Cautiously Floating

Again Philadelphia mortgage seekers should consider cautiously floating their rates as bonds move slightly lower today. The Fed’s last federal funds rate decrease may be causing some concerns of an increased fear of inflation. Bonds are trading marginally lower as commodity prices have increased today. However, there is not much news although expect the Fed to be watching the Core Personal Expenditure Index (PCE) that comes out Friday. This is a gauge the Fed uses on inflation, which may become a cause of concern in the near future.   Other news today may come from speakers such as the Dallas Fed President Richard Fisher and the new Chicago Fed President Charles Evans.  For today, with little news until Friday, keep an ear out for the two Fed speakers and cautiously floating loans.

By, Joe Brady

Philadelphia Mortgage Market Rates Report – September 17th, 2007 (10:00am): Cautiously Floating

On the day before the much anticipated Fed meeting, Philadelphia home buyers should consider cautiously floating their loans. Bond prices have slightly fallen today primarily due to Alan Greenspan’s continued fear of inflation.  Although Greenspan is the former chairman of the Fed, he still holds a great deal of respect in economics and people tend to listen. Another factor of this marginal bond change was the NY Empire State Index falling below expectations of 18 to 14.7.

Bonds seem to be in limbo right now awaiting the Fed’s economic report tomorrow, September 18^th. It is expected that the Fed will cut interest rates either 25 or 50 basis points.  The reason for this cut revolves around the troubled credit markets following the collapse of subprime mortgages.  Traditionally this increases bond prices; however, amongst the concern of inflation, negative news on inflation could adversely affect bonds. So keep an eye on the Fed report tomorrow and consider cautiously floating loans today.

By, Joe Brady

 

Philadelphia Mortgage Market Rates – August 31st, 2007 (10:00pm) – Neutral

Philadelphia home buyers should be aware of some important economic news coming out today. The volatile Philadelphia market will gain some incite from President Bush and Ben Bernanke as to where rates may be heading and their take on the fallout from the subprime meltdown. Earlier today the PCE, or Personal Consumption Expenditure report, came out at 0.1%, less then expectations of 0.2%. This resulted in pushing stocks higher as inflation seems to be tamed and still within the yearly Fed target rate at 1.9%. However, this is causing bonds to edge lower at the present time.

Ben Bernanke is speaking today and many investors hope to hear a glimpse of where rates are heading. This is highly unlikely, but we are still expecting a rate cut as inflation again has not risen and the ‘liquidity crisis,’ although recovering, is still hurting cashflows. President Bush is also set to speak at 11:10am EST to propose programs to aid those struggling with subprime mortgages or ARMs that are readjusting. In light of this coming news, we recommend a neutral bias this morning. However, keep an eye on coming news today by both the President and the Fed Chairman.

By, Joe Brady

Philadelphia Mortgage Market Rates Report: August 21st, 2007 (11:30am EST) – Floating

Today’s Philadelphia home buyers should focus on floating as bonds are trading higher, up 25 basis points, or 0.25%. After last week’s volatile ups and downs, bonds moved higher today on news of a possible German banking crisis. This potential crisis will push funds away from Germany and into the US markets.  More reassuring news came from the Treasury Secretary Henry Paulson as he stated that this liquidity crisis is a result of a risk-adjustment and “is against the backdrop of a strong global economy [and] a very healthy U.S. economy.”

However, an active Fed is still vital in order to keep these unstable markets in line.  Last Friday they cut the discount window rate, the rate at which the Fed lends to banks, from 6.25% to 5.75%, the first time since after September 11^th, 2001.  They are also extending the terms of this lending from 1 day to 30 days which will enable banks to more easily weather this ‘crisis.’ In other words, the Fed is doing what it can to resolve the situation and as of today we recommend Floating for Philadelphia home buyers.

By, Joe Brady

Philadelphia Mortgage Rates Report: August 15th, 2007 (1pm EST): Cautiously floating to locking

Slightly better news in the markets today although still remaining quite volatile. Bond prices are marginally up in response to the release of a few economic reports. Today the CPI (Consumer Price Index) and the core CPI came out with ‘on target’ results. The CPI hit below expectations of 0.2% at 0.1% and the Core CPI, which measures consumer inflation without the volatile energy and food prices, came in at 0.2%. The results may be connected with lower gas prices, but are still the lowest inflation readings over the past 8 months. Potentially the Fed may ease up on inflation worries with this news and focus on stabilizing this ‘credit crunch,’ much data and time is still needed in analyzing.

More good news came with the reported $121 billion of net foreign purchases of U.S. securities in the month of June. Despite the month old data, it provides a show of confidence in the market. However, the question on everyone’s mind is what the results will be for the struggling month of July. We will have to wait until next month to show the effects of this liquidation crisis. With this seemingly positive news amongst weeks of fears in inflation and liquidity, we recommend CATIOUSLY floating or when in doubt or fearful of the volatile market, always be safe and Lock.

By, Joe Brady

Philadelphia Mortgage Rates Report: Monday August 13th, 2007 (1:00 pm EST) – Neutral to Locking

In response to a stabilizing global market, bond prices have moved slightly higher early this morning. Amidst last weeks rush to liquidate credit markets, the ECB has now injected $278.9 billion, with $65 billion today. The Japanese were also active as they pumped $5 billion into Japan’s money markets. These bold and abrupt actions have eased liquidation fears as European stocks begin to move higher throughout the day. This is expected to spillover in the US markets as well, easing the downward stock pressure of last week. Also providing market confidence is Goldman Sachs.  Early this morning they acknowledged a significant loss of value in their Global Equity Opportunities fund and are now placing an additional investment of $3 billion into the fund (with the aid of outsiders) as a show of confidence and step toward adding liquidity.

With the potentially market rebound, bond prices are expecting to decline slightly as money moves out of bonds and into stocks. A neutral to locking position is therefore strongly advised. But, when in doubt, lock.

The changing credit markets are putting some pressure on the Fed and stirring much debate on whether or not interest rates should be cut. There is an increase concern of inflation with this monetary injection into the markets; however, also an ongoing unease with the sub-prime mortgage problems throughout the economy. The debate falls as to whether or not a rate cut and ‘bailout’ for risky investors should take place. This leaves much to question and an anticipation for the Fed’s next move on September 18^th.

By, Joe Brady

 

Philadelphia Mortgage Rates Report: August 10th, 2007 – Cautiously Float Conforming, Lock Non-Conforming

Philadelphia home buyers should float conforming loans and lock non-conforming amidst this ‘liquidity crisis.’ Bonds are trading slightly higher today in response to the continued stock market decline. However, the volatile market can change quickly and dramatically so a watchful eye is required at this unstable time for any floating conforming loans.

The news today includes the ECB (European Central Bank) unloading another $83 billion dollars into the European banking system after loaning $131 billion yesterday. The Fed also responded by pumping $19 billion into the economy today after $24 billion yesterday. These actions are attempts to calm investors’ fears of a liquidity problem and stabilize the global financial markets.

In related news, the Fed is now expected to cut rates come September or even before then in response to this global credit problem. Traders are putting a 33% chance that the Fed will cut rates prior to September 18^th. The last time this occurred was on September 13^th and 18^th 2001, in response to the events on 9/11.

With these historically changing markets, we strongly recommend our customers to lock all non-conforming loans.

By, Joe Brady