Tag Archives: Mortgage Rates

May 2020 Podcast Video, Financial Planning and Capital Market Update – By John Kvale

Hello and Welcome to our May 2020 Financial Planning and Capital Market Update!

If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast audio format as well as Video!

Newbies –

We like to articulate our thoughts and review on a Monthly basis our Financial Planning Tips, Capital Markets and current events!

Hope you enjoy!

May – 2020 Video (YouTube)

 

Financial Planning Tip  –

Mortgage Rates

Looking at the chart of the 10 year treasury, we can see rates have finally settled and we are hearing the volume of lenders overflow has calmed as well. While the 10 year is not an exact predictor of Mortgage Rates it is loosely correlated.

Now may be a good time to check your Mortgage Rate and consider refinancing!

Here is one of our favorite and most popular posts on the items to remember when you are getting a mortgage and especially when you refinance.

5-29-20 10 year us treasury

The Virtual Pivot

In true making Lemonade from Lemons fashion, not only have we been able to access the John Mauldin event, with over forty hours of speakers, but a National CFA(Chartered Financial Analyst) event and several others were completed virtually.

We have so much awesome information to share in the coming weeks…. oddly, that we would have not had access to if they had been held live!

Looking forward to sharing…. tons if info!!

Capital Market Comments – They Came Out!

The Look Through Continues

With current earnings being less than stellar, you may ask why the markets are clawing their way back?

It does appear investors are looking through the valley and attempting to price in what a recovery may look like.

The Tuesday after Memorial Day offered multiple openings across the country…. Wall Street wiped its brow as people came out!

Expect bumps, and headline shocks, both positive and negative … but that’s why we are happily conservative investors at heart!

5-29-20 YTD SP 500 Small Cap International

Have a Great Day – Talk to you at the end of June!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
street-cents

Good News On Housing, Mortgage Rates, And A Happy Consumer … Early Observations

Last week we had two good personal data points concerning housing which set us in motion for additional research.

With residences being one of the larger assets for many, a downturn in prices i.e. 07-09 … caused pause for much of the consumer due to a drop in asset value, creating a negative feed back loop, thereby lowering confidence and spending.

Things may look different this time.

Initial Data Points On Housing/Residence

The jury is still out on all of this, and we would think commercial i.e. Office Properties, raw land, and other similar assets may see negative pressure initially coming from our current situation and the easy pivot to Virtual ….

However a silent winner, or at least a stabilization of value may be residential. It makes sense as there are usually winners and losers when change occurs.

With two noted sales last week, we set out for more information on what may be occurring.

The MBA Purchase index, (includes all purchase mortgage applications) has bounced back strongly and is back to about 90% of the original tracking high, set just a few months ago. Hat Tip RB, for bringing this to our attention, we were very surprised!

Here is a good chart, which is copyright protected, as such, not included in this post.

Mortgage Rates Lower – Included in the nice bounce back of the Purchasing Index above, are the following updated lower Mortgage rates … a second positive to go with the consumer and residence real estate.

While this lowered mortgage rates took time to develop (blip in chart), due to a dash for cash and a wave of refinance, along with underwriters concerns of consumer credit health, due to heightened unemployment, it does appear lower rates may be adding wind to the sails of residential market.

5-16-20 30 year mortgage rate

Consumer Confidence – One of the most widely followed confidence indexes, the University of Michigan Sentiment index last week released their latest results, and found surprisingly the index jumped higher than expected, mostly based on current situations, likely associated with the light at the end of the tunnel of openings.

Here is a chart from last month, again copyright restricts last weeks results, but this index bounced back to almost 74 last week…again surprisingly.

Certainly headed in the correct direction.

- U of M -

So a hot New Homes Mortgage Purchasing Index, along with lower Mortgage rates and a happier than expected consumer may lead to additional good news for the economy, spending, asset prices, and an eventual return to a more normal!

It’s early, and things could change quickly, but the initial bread crumbs look VERY positive!

Have a Great “Positive Consumer” Day!

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents

 

 

Interest Rates Presenting an Opportunity, Eventually … Current Freddie Mac Mortgage Rates as of Last Week

Really like to work on articles a few days, to even a few weeks (ever so often months) in advance … repeat visits to the draft make for a better post as different moods make for different views.

Well…given the speed of Capital Markets lately… a second or third look may garner a loss of possibility.

Break In: As mentioned above, things are moving quickly, yesterday early in the AM, FOMC (Federal Open Market Committee) chaired by Jerome Powell lowered interest rates by .50 or 50 basis points as an insurance policy against slowing economic conditions. This does not directly affect loan rates, but speaks to a slower economic situation, which does effect rates across the board!

More on this at a later time…. but the following is an all time inter-day low yesterday for the 10 year treasury yield…at least for the moment!

img_6213

.91% – this from the cell, such the unusual format.

Break In Again: Interestingly, after a big rally on Monday and another set for today, the treasury yield is unexpectedly staying low and not rising dramatically in yield, which is what one would expect. This actually gives loan rates time to catch up in their possible slower decline – making this exercise all the better!

Now… let’s carry on …

Fixed Rate Loans, Especially Long Dated, such as 30 Year Mortgages Need Review

Not withstanding the comments in the opener, interest rates have dropped so fast on Virus fears and possible slowing economic conditions as a result that some loans may have not completely caught up as of yet…

3-2-20 Chart of 10 year Treasury

That is an all time low- WOW!

Freddie Mac Rates

Here are the latest average mortgage rates from Freddie Mac as of last week… they are posted only weekly….

2-27-20 Freddie Mac Avg Rates

Now is a good time to review any fixed rate loans, ESPECIALLY longer dated ones… in refinancing a mortgage, here is a detailed post, the following is the most important nugget from that post…

Think 18 months cost break even – We like to have the saving from the refinance cover the cost of the refinance within 18 months – i.e. Person with $30k mortgage at 5% probably would not need to refinance to 4%, but a $3 million mortgage may be smart to refinance from 4.25% to 4% or the like, if the numbers work out.

Have a Great “Fast Moving Markets” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents