Scott Kinne First Heritage Mortgage

Scott Kinne's Mortgage information Blog

  • About Scott
  • Testimonials
  • Resources
    • First Time Home Buyer Tips
    • First Time Home Seller Tips
    • Closing Costs
    • Home Appraisal
    • Home Inspection
    • Affordable Credit Repair
    • Interest Rates
    • Loan Programs
    • Loan Process
    • Loan Checklist
    • Mortgage Glossary
    • Mortgage FAQ
  • Main Website
  • Contact
  • Apply

The Week In Review (October 22, 2007) : What To Watch For

October 22, 2007 by Scott Kinne

Rising oil prices, weak housing data, and ongoing credit concerns pushed mortgage rates lower last week as investors sought safety for their dollars. Stock markets took losses and bond markets — including mortgage bonds — booked gains. Remember, when mortgage bonds go up in price, mortgage rates come down.

To understand why mortgage rates tend to drop when stock markets have a sell-off, we should look at the situation from an investor’s perspective.

When lots of investors are selling stock positions, stock markets fall. The investors get cash in return for their sold securities. But cash doesn’t offer much of a return on investment. So, investors look for “better” places to invest their cash.

The bond market usually fits the bill.

As more dollars enter the bond market, the relative demand for each type of bonds increases. With the higher demand, bond prices move higher, thereby pushing yields down. And mortgage bonds are just one type of bond that benefits like this — there are municipal bonds, corporate bonds, and treasury bonds/notes, too.

This week, the biggest news will be Wednesday’s release of the Existing Home Sales report, and Thursday’s New Home Sales. Both are expected to show relative weakness from August’s figures but because the weakness is expected, the news shouldn’t move mortgage rates.

The biggest threat to mortgage markets this week will be changing expectations about the Federal Open Market Committee’s meeting next Tuesday and Wednesday. If markets believe that the Fed will try to spur economic growth, expect money to flow back into stocks (at the expense of bonds) which will pull mortgage rates higher.

Filed Under: Uncategorized

Scott Kinne

Contact Scott

Vice President, Senior Loan Officer
NMLS ID #182351
Office: 703.293.6146
Mobile: 571.237.6241
Fax: 571.317.2478
skinne@fhmtg.com

Licensed In Maryland, Virginia, Washington D.C., West Virginia
  LOAN APPLICATION
  FREE RATE QUOTE

Connect with Me!

Sign Up For My Free Newsletter

Categories

Recent Posts

  • Getting A Mortgage When Self-Employed: What You Need To Know
  • On Time, Every Time: How Being Late on Monthly Payments Can Affect Your Mortgage
  • What Is A Loan Contingency: An Overview
  • What’s Ahead For Mortgage Rates This Week – January 23, 2023
Equal Housing Lender
nmlsconsumeraccess.org
First Heritage Mortgage, LLC, Company NMLS ID #86548

Our Location

3201 Jermantown Road
Suite 800
Fairfax, VA 22030
Business: 703-293-6146
Cellphone: 571-237-6241

Copyright © 2023 · Powered by MySMARTblog