The Mortgage Man
Get more out of your mortgage experience!Archive for oil prices
Tuesday September 2, 2008
So, what happened with mortgage rates while you were weathering Gustav?
Well, the long weekend is over. Summer has officially ended. And, we are back at work to see what gifts were left behind by our friend Gustav. Those who made the mass exodus from New Orleans are probably mad and irritated that they left. But, it is that kind of thinking that gets people killed when the storm is worse than expected rather than weaker than expected.
New Orleans survived the storm, and for the rest of us on either side, it definately could have been worse. But the markets today are reacting to the lack of any affect on the offshore oil platforms. As reports from all of the companies with assets in the Gulf begin to come in, we are seeing that the damage is mininal if at all, and the oil traders are running for the hills because of it.
So what does this have to do with mortgages and real estate? Well, the sell off in oil is creating a run on the stock market. A run on the stock market is causing bond traders to sell bonds and buy stocks. As the bonds fall from a sell off, mortgage rates rise. Because of this, today is a great day to lock in your rate ahead of losses that are sure to happen this afternoon or tomorrow in mortgage rates.
Thursday August 28, 2008
Here is how the market is shaking out today.
Today, the preliminary Gross Domestic Product report came in at 3.3% above expectations of 2.7%, and well over the previously reported 1.9%. The final number for this report is not due out until next month, but the preliminary reading has people exiting bonds and buying stocks today.
Because of this, you might want to lock your rate if you have a loan in processing. Additional pressure on bonds is being created by oil prices trading above $120 per barrel again on fears of Hurricane Gustav and how it will affect the 3500 oil drilling platforms in the Gulf of Mexico. if there is significant damage done to oil drilling operations from Hurricane Gustav, we may see a greater spike in oil next week, creating even more pressure on the bond market.
Lots of uncertainty on the horizon, but prudence may be the word of the day in my advice to lock in and protect from potential loss.
Monday August 18, 2008
Mortgage bonds break above the 25 day moving average.
Mortgage bonds have been moving in a sideways channel for almost a week with strong support levels below it, and the 25 day and 50 day moving averages showing resistance above. As these moving averages continue the downward slope to catch up with the lack luster market, it is only a matter of time before the charts are forced to move above resistance or below support levels.
Friday, bonds squeaked above the 25 day average then came back down. And today, they opened above the 25 day, and have been solidly testing the 50 day. Since there is no economic data due out today, this push for strength in bonds is based almost solely on weakness in Stocks. With oil making a move back up today, it is very possible that mortgage bonds may close above the 50 day moving average.
If this were to happen, it would be a real positive note for a trend in better mortgage rates to come. Of course there is more to the market than just trends on a chart. But, it can be seen as a psychological victory on the part of traders. Based on this information, it might be advisable to float your rate today to see if you can lock in a slightly lower rate tomorrow. The choice is yours, but it is worth watching.
The Mortgage Man 
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