Written By — Chad Emerson
Good news and bad news for the mortgage market today. The good news first, August Institute of Supply and Management Index was recalculated to show readings down from 54.3 to 51.5, that is normally supportive of steady to potentially lower mortgage rates. BUT, not so fast, the Non-Farms had to put their two cents in with numbers that are causing yet another sell-off on Wall Street. Mortgage-backed securities are trying to rally back from their opening of -17, to just -8 as I write. What caused our skittish investors to dump their MBS were better numbers than expected on non-farm payrolls. Non-farms were down 54,000 when most forecasters were expecting at least somewhere north of 75,000 and potentially up to 100,000. Anything less than 75,000 was sure to cause a sell off.
So this is the way it is going to be for some time, whereas the mortgage rates will be dependent on stock purchase/sales. The growing concern on MBS is that the price has just hit an all time high, and what happens if they can’t find anyone else willing to pay even more for MBS? They will be left holding on to a depreciating asset, and ultimately be left licking their wounds and selling for less than what they bought them for. Sometimes it’s hard to resist the temptation to catch the train will it’s moving, as everyone wants a piece of the pie, but the cooler calmer heads on Wall Street know not to buy on momentum and that is what investors are starting to think about prior to purchasing.
I will update everyone of rates as soon as the smoke clears, and rate sheets are updated.
Rates holding tight at 5.25% for 20% down investment SFR Purchase.
The same for 25% down investment duplex
Chad Emerson
Senior Loan Officer
PrimeLending
270 N. Loop 1604 E., Ste. 310
San Antonio, TX 78232
Office Direct: (210) 483-4962
Mobile: (210) 557-6320
E-Fax: 1-(866) 217-8894
cemerson@primelending.com
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