Mortgage rates soared last week as mortgage markets experienced a 4-day freefall.By the end of the trading week, conforming mortgage rates had jumped by as much as 0.500 percent. The spike in rates can't be pinned on any one factor, but 3 contributing factors include: The lingering impact of high energy prices on inflation The ongoing weakness of the U.S. dollar A rally in the financial sector, marking a return to risk-taking Inflation and a weak dollar both devalue mortgage repayments, a well-chronicled relationship on this Web site. In short, when mortgage bond investors find ...

For the first time in its history, the FHA changed its funding fees and mortgage insurance structure this week.  FHA-insured home loans are now subject to a risk-based pricing adjustment, as shown by the table above. Because of risk-based pricing, FHA home loans are now more expensive for borrowers with less-than-ideal credit profiles, and less expensive borrowers with perfect ones. Prior to the changes, most FHA borrowers paid an up-front fee of 1.500 percent, plus on-going annual mortgage insurance payments equal to one-half-percent on the amount borrowed. FHA-insured ...

Another day, another piece of inflationary data. June's Consumer Price Index showed a 5 percent year-over-year increase in what is now the largest annual Cost of Living increase for Americans in 17 years. This is bad news for both home buyers and homeowners in want of a new mortgage because rising costs are inflationary and inflation causes mortgage rates to move higher. Predictably, mortgage rates jumped Wednesday morning after the CPI data was released and they edged higher throughout the rest of the day. This morning, mortgage rates are higher again on unexpected strength in ...

Last week, Forbes Magazine published a Top 10 list that should grab the attention of housing market bottom-feeders. The Top 10 list of Increasingly Affordable U.S. Housing Markets shows that falling home prices and steady mortgage rates are providing a support floor in some of the country's most beat-up regions. The report's methodology is simple: Take citywide income data as reported by HUD Match it against purchase prices from court records Run the math using "prevailing interest rates" from Wells Fargo A city is considered "more affordable" if increasing numbers of "average ...

Mortgage markets have turned their attention back to the U.S. economy this morning, causing yesterday's rate improvements to unwind a bit. Rates had fallen Monday after the Federal Reserve and U.S. Treasury's joint announcement in support of Fannie Mae and Freddie Mac.  Today, it's the data that is taking center stage. Most notably, the U.S. Dollar is trading at an all-time low versus the Euro and other currencies. This is a negative for active home buyers because American homeowners repay their mortgage interest in U.S. dollars.  When the dollar loses value, so does the value of ...

Mortgage rates fell slightly in a week that included a bank failure, more oil price spikes, and questions about the health of the nations' mortgage market. Rates would have fallen more if not for a late-Friday sell-off that added 0.125 percent to most products. As financial markets fell under stress, most people missed the strong points that emerged about the U.S. economy last week: Fewer Americans filed for unemployment benefits Wal-Mart reported stronger-than-expected sales Consumer confidence rose for the first time in 7 months And, also worth noting: homes under contract ...

"Economic uncertainty" is turning into a 2008 buzzword and there's good reasons why. On the one hand, there are precursors to inflation in the economy: Rising oil costs Rising food prices Higher Cost of Living On the other hand, there are precursors to recession in the economy, too: Mounting job losses Less access to credit and/or loans Falling consumer confidence data The pie chart at right illustrates just how uncertain the "experts" are about the state of the U.S. economy.  They're evenly split, right down the middle. This isn't good news or bad news for ...

According to RealtyTrac, the rate of foreclosures across the U.S. is slowing. Versus May, June foreclosures fell at a 3 percent clip. 25 states showed improvement month-over-month, led by many of the same areas that had fueled foreclosure activity in 2007. A sampling of RealtyTrac's data includes: California : Foreclosures down 4.54 percent Georgia : Foreclosures down 14.91 percent Arizona : Foreclosures down 0.07 percent Michigan : Foreclosures down 6.00 percent Illinois : Foreclosures down 15.65 percent However, the improving nature of the data is not what is making ...