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As financial markets froze this very week in 2007, the real-time media market was catching fire. So instead of summarizing it all with a 140 character Tweet, below we offer some broader perspective by bringing everyone’s favorite obsessions together: mortgage rates, Twitter, and iPhones. Stat-filled timeline and rate chart are included.

Home prices started falling in 2006 but it wasn’t until 2007 that the full impact of loose credit was felt. Loans made to unqualified (mostly U.S.) borrowers underpinned bond funds around the globe and countless derivatives were created from those bonds. Because of this, Nouriel Roubini was one of the first economists to note that “we have a subprime financial system, not a subprime mortgage market.” more…

Back in January, here’s what we said about rates and the economy:

“As we move through 2010, our outlook is for waning Fed support to push rates approximately 1% higher, and for a choppy economic recovery marked by modest GDP growth and minimal employment improvement.”

Conforming 30-year fixed rates were at 5% at the time. At this July 14 writing, rates are much lower at 4.57%. Clearly our rate view was conservative but at least our economic outlook is still accurate, and at least rates are lower. more…

Zero-point rates on 30yr fixed Conforming loans (up to $729k) held last week near record lows for a second straight week, and one-point rates on Jumbo loans (above $729k) are steady in the low- to mid-5% range.

Rate Lock Advisory Week of June 14
WeeklyBasis continues its rate lock bias going into next week because European debt problems that caused U.S. rates to drop during May and early-June are easing, and rates could reverse as a result.

This coming market week of June 14-18 is likely neutral for rates. We’ve got business and consumer inflation reports Wednesday and Thursday, and housing starts and building permits Wednesday. The X-factors for rate markets are ongoing global debt fears, and continued Senate and House debate to reconcile their two versions of financial reform bills. Mortgage bonds remain in a slightly overbought state, and if these bonds sell off, rates would rise. more…

Zero-point rates on 30yr fixed Conforming loans (up to $729k) begin the week back at record lows, and one-point rates on Jumbo loans (above $729k) are steady in the low- to mid-5% range. The European debt crisis flared up again last week and Friday’s jobs report was drastically lower than expected. The result was that global investors continued to be net buyers of Treasury and mortgage bonds as a safe haven, and when mortgage bond prices rise on these buying rallies, rates drop.

Record Low Rates To Start Week
As of market close Friday mortgage rates were again at their lowest levels since 1971. Here is a chart showing this. more…

Despite a volatile week, rates were net down .125%, bringing conventional conforming rates (on loans up to $417,000) within .1% of all-time record lows. Below is a recap of last week and rationale for a rate lock bias going into next week. And don’t forget that Friday is the last day homebuyers can be in contract to be eligible for the Federal homebuyer tax credit—those in California have a new state credit with different deadlines. More on both tax credits here.

Rate Factors Week of 4/19/10
The largest factor pushing rates down early and late last week was the ongoing debt crisis in Greece. As bond market investors have grown more skeptical about Greece’s ability to fund their debt obligations, they have sold out of Greece and other European bonds to buy mortgage and Treasury bonds. When mortgage bond prices rise on this buying, rates drop. more…

The California Association of Realtors (CAR) predicts that the money allocated for the CA first-time homebuyer credit may run out in 10-20 days once the program starts on May 1. This is what CAR said:

“The $100 million allocated for California’s first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.’s Economics team. California’s Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied. However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis. more…

California Tax Credit
The newly announced California tax credit is available to homebuyers closing from May 1, 2010 to July 31, 2011, but they must be in contract by December 1, 2010. The credit is for 5% of the home price up to $10,000 cap. It’s for owner-occupied single family homes only, and it’s for first time buyers or buyers of homes that have never been occupied. This credit is on a first-come, first-served basis until the state’s allocated $100m to first time buyer and $100m to never-occupied programs are used up. There are no income limits on borrowers. The tax credit has to be claimed one-third per year over three years. UPDATE APRIL 17: California Association says CA credit could run out in a few weeks.

Federal Homebuyer Tax Credit
The deadline for the Federal homebuyer tax credit fast appraching. Federal homebuyer tax credits are available to buyers in contract before April 30, 2010 and closing by June 30. The credit is allowed for single buyers earning up to $125,000 and married couples earning up to $225,000. Who qualifies: first time buyers who haven’t owned a home in three years get an $8000 credit, and buyers who have owned a primary residence for at least five of the last eight years get a $6,500 credit. The tax credit is equal to 10 percent of a purchase price—credits are capped at $6500 for repeat buyers or $8000 for first time buyers, and purchase price is capped at $800,000. more…

As most know from our weekly coverage over the last 64 weeks, the Fed has been using a $1.25 trillion budget to buy mortgage bonds since January 1, 2009 in order to elevate mortgage bond prices and push rates down. Rates are 1.125% lower than they were when the program was announced, and the Fed will use up it’s final $3b next week, then the program is over. Below is more information on what this means going forward.

Rates rose about .2% last week, so any quote a mortgage shopper received before March 23 will be higher now. This rise came from overall bond market panic about the ability of governments to meet future bond repayments. This started with worries about Greece and Portugal, then spread further in Europe and there’s been ongoing rumors about whether ratings agencies will downgrade America’s AAA credit ratings. Mortgage bonds sold off and rates rose on this sentiment as well as paltry performance on new Treasury auctions. We’re now about .375% above all-time record lows and could move higher. more…

The most-asked questions by home mortgage borrowers so far in 2010 are about where rates will go, how to lock rates in a volatile trading environment, and how home appraisals affect the lending process. Each question is addressed below.

Where Will Rates Go By Summer?
Rates on loans up to $417,000 are about 5% as of mid-February, and rates could rise as much as .5% by summer for three macro reasons: (1) The Fed will end it’s $1.25t mortgage bond buying program March 31, and then we’ll likely see profit taking on mortgage bonds as private investors sell, which pushes prices down and yields—or rates—up; (2) An improving economy and resulting inflationary fear will cause mortgage bonds to sell off because inflation eats up bond returns, so this would also push bond prices down and rates up; and (3) Inflation will cause the Fed to start hiking short rates from current near-zero levels. Global investors currently borrow on these short-term rates to buy long-term securities with higher returns. When short rates rise, it will erode the benefit of this interest rate trade and force selling of long-term securities—including mortgage bonds—to repay short-term loans. That selling will also push rates higher.

How Do You Decide When To Lock A Mortgage Rate?
We can expect continued rate volatility as markets struggle to interpret the impact daily economic indicators have on the aforementioned macro rate factors. For now, rates are holding close to record lows, but intraday rate swings can be .25% to .5% as mortgage bonds trade on different interpretations of daily economic data. So how do you decide when to lock a rate? You need to set a rate target with your mortgage advisor based on current trading ranges and estimated results of upcoming economic data, and you need to be ready decide on a rate lock based on those rate expectations. If it looks like rates will trade above that target, it’s time to lock your rate—this includes locking ahead of economic releases that might have surprise results: better to lock at your target than having rates trade the wrong way on surprise data. It’s a very simple strategy, and making the lock decision process more complicated than this adds unnecessary stress. more…

A common question among mortgage shoppers is: what if rates get better after I lock a rate for my loan? The answer is that locking a rate is much like buying a stock.

When you choose to buy a stock at a specified price, you’re executing a Limit Order. This means you set the price at which the trade will be executed rather than being subject to the market price at a trade interval.

So if you execute a limit order to buy a stock at $55.00, you own it at $55.00. If the market price declines to $52.50 after you own that stock, you can’t go back to the securities firm and re-purchase those shares at the lower price. You could elect to use some kind of hedging strategy to offset the loss but even then, you’d be incurring more cost to buy more securities to create a hedge. more…