Golf

Mortgage Market in Review (1/22/16)

Home InspectionMarket Comment – 1/22/16

Mortgage bond prices finished the week slightly lower which pushed rates higher. Rates swung back and forth throughout the week. Positive stocks Tuesday morning put some upward pressure on rates. That was quickly reversed mid week as a stock selloff ignited. We ended the week with some stock strength early Friday morning. The NAHB housing index was 60 versus the expected 61 reading. Consumer prices fell 0.1% in December versus the expected unchanged reading. The core, which excludes volatile food and energy, rose 0.1% versus the expected 0.2% increase which was rate friendly. Housing starts were 1149K. Analysts expected a higher reading of 1203K. Weekly jobless claims were 293K versus the expected 279K. Mortgage interest rates finished the week worse by approximately 1/4 of a discount point.

LOOKING AHEAD

Economic
Indicator
Release
Date & Time
Consensus
Estimate

Analysis
FHFA House Price Index Tuesday, Jan. 26,
10:00 am, et
Up 0.4% Moderately Important. A measure of single family house prices. Weakness may lead to lower rates.
Consumer Confidence Tuesday, Jan. 26,
10:00 am, et
95.8 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
New Home Sales Wednesday, Jan. 27,
10:00 am, et
499K Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
Fed Meeting Adjourns Wednesday, Jan. 27,
2:15 pm, et
No rate changes Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
Weekly Jobless Claims Thursday, Jan. 28,
8:30 am, et
295K Important. An indication of employment. Higher claims may result in lower rates.
Durable Goods Orders Thursday, Jan. 28,
8:30 am, et
Down 0.2% Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
Q4 Advance GDP Friday, Jan. 29,
8:30 am, et
Up 2.0% Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Q4 Employment Cost Index Friday, Jan. 29,
8:30 am, et
Up 0.4% Very important. A measure of wage inflation. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment Friday, Jan. 29,
10:00 am, et
93 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

ECB QE

The European Central Bank jumped back into the trading discussion as ECB President Draghi caused volatility in the global financial markets last week. Draghi indicated the ECB could ease policy at their March meeting amid growth concerns. He went on to commend Fed Chair Yellen for raising rates in the U.S. despite different conditions in the eurozone. Draghi stated, “The U.S. recovery is more advanced than what’s happening in the euro area and Japan, so it’s entirely natural that policies do differ, and they will be on a diverging path for a while.”

Equities rallied across the globe at the expense of mortgage bonds in response to his remarks. This reversed some of the flight to quality buying of U.S. debt instruments earlier this month. The good news for U.S. borrowers is the signal that the global economic recovery is still wobbly. Now is a great time to take advantage of the historically favorable rates.

Copyright 2016. All Rights Reserved. Mortgage Market Information Services, Inc.  www.ratelink.com The information contained herein is believed to be accurate, however no representation or warranties are written or implied.
Mortgage Business

Mortgage Market in Review

Market Comment 1/9/16

Mortgage bond prices finished the week higher which helped rates improve. MBS trading started on a positive note amid significant stock weakness tied to global events. Chinese manufacturing data showed weakness and the equity selling contagion spread across most of the globe. U.S. stocks were negative throughout most of the week. The DOW fell over 800 points with several days of 200+ point losses. Fed official Lacker caused some concern with remarks of 4 or more possible rate hikes this year. His comments and some of the data tempered the MBS gains. ADP employment rose 257K versus the expected 199K increase. Weekly jobless claims were near expectations at 277K. Unemployment was 5% as expected however the payrolls figure surged higher with an increase of 292K versus the expected 200K increase. Mortgage interest rates finished the week better by approximately 3/8 of a discount point. Continue reading

Golf

Mortgage Market in Review

Interest rate hedgeMarket Comment – December 18, 2015

Mortgage bond prices finished the week slightly lower which pushed rates a bit higher. Trading started on a sharply negative note as traders positioned themselves ahead of the expected Fed rate hike. We recovered some of the losses later in the week amid mixed economic data. Consumer prices were unchanged in November and the core value, which excludes the volatile food and energy costs, rose 0.2%. That data was near expectations and supports the Fed’s 2% inflation target. Housing starts printed at 1,123K versus the expected 1,150K. Weekly jobless claims were lower than expected at 271K. The Philadelphia Fed survey, an indication of manufacturing strength in the Mid-Atlantic region, fell 5.9%. Traders expected a 2% increase. Leading economic indicators rose 0.4% which was stronger than the expected increase of 0.1%. Mortgage interest rates finished the week worse by approximately 1/4 of a discount point.
LOOKING AHEAD

Economic Indicator Release Date & Time Consensus Estimate Analysis
Q3 Gross Domestic Product Tuesday, Dec. 22, 8:30 am, et Up 2.1% Important.                   The aggregate measure of US economic production.                   Weakness may lead to lower rates.
FHFA House Price Index Tuesday, Dec. 22, 10:00 am, et Up 1.4% Moderately Important.                   A measure of single family house prices.                   Weakness may lead to lower rates.
Durable Goods Orders Wednesday, Dec. 23, 8:30 am, et Up 2.2% Important.                   An indication of the demand for “big ticket” items.                   Weakness may lead to lower rates.
PCE Core Inflation Wednesday, Dec. 23, 8:30 am, et Up 0.1% Important.                   A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
Personal Income and Outlays Wednesday, Dec. 23, 8:30 am, et Up 0.2%, Up 0.1% Important.                   A measure of consumers’ ability to spend.                   Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment Wednesday, Dec. 23, 10:00 am, et 92 Important.                   An indication of consumers’ willingness to spend.                   Weakness may lead to lower mortgage rates.
New Home Sales Wednesday, Dec. 23, 10:00 am, et 505K Important.                   An indication of economic strength and credit demand.                   Weakness may lead to lower rates.
Weekly Jobless Claims Thursday, Dec. 24, 8:30 am, et 269K Important.                   An indication of employment.                     Higher claims may result in lower rates.

Fed Rate Hike

The Federal Reserve hiked rates last week which ended a seven year period of a near zero interest rate policy.  The Fed began easing monetary policy in August 2007 to support the economy at the onset of the Great Recession.  Over the next 16 months rates were cut an additional 11 times as economic conditions continued to deteriorate.  Global financial markets were in turmoil, stocks lost half their value and the banking system seized.  The Federal Reserve along with other central banks coordinated an attack to stop the carnage.  After seven years of ultra accommodative policy the Fed hiked rates to ward off potential inflation.  The Fed had to take away the punch bowl at some time or risk the possibility of creating a bubble that could pop and cause economic crisis.

Global traders are not as concerned over the first rate hike.  It is what happens next that causes them heartburn.  Low interest rates have helped many companies and consumers in the past 7 years.  This is a great time to take advantage of low mortgage rates to buy a house or refinance.  As the economy improves the Fed will continue to hike rates and mortgage rates will likely follow.

Golf

Mortgage Market in Review

Interest rate hedgeMarket Comment – Afternoon of December 11, 2014

Mortgage bond prices finished the week slightly higher which pushed rates a bit lower. Trading started on a positive note early in the week amid weak stocks. There was no data until the end of the week but we had several Treasury auctions that were near average. Weekly jobless claims were 282K. Analysts expected claims at 270K. The initial reaction was muted as traders already priced in the fact that the Fed is poised to raise rates. Retail sales rose 0.2% versus the expected 0.3%. However, the ex-autos figure rose 0.4% versus the expected 0.3% increase. The producer price index showed some signs of inflation. PPI rose 0.3% versus the expected unchanged reading. The core, which excludes volatile food and energy, rose 0.3% versus the expected 0.1% increase. Mortgage interest rates finished the week better by approximately 1/4 to 3/8 of a discount point. Continue reading

Golf

Mortgage Market in Review

Market Comment – November 20, 2015

(this is from a newsletter I follow – The Mortgage Market in Review)

Mortgage bond prices finished the week higher, which pushed rates lower.  The data was generally as expected.  Consumer prices rose 0.2% and the core rate, which excludes volatile food and energy costs, also rose 0.2%.  Housing starts were weaker than expected at 1,060.  Market participants looked for starts of 1,160K.  Weekly jobless claims were 271K versus the expected 272K.  The Philadelphia Fed survey rose 1.9% versus the expected 1% decline.  Leading economic indicators rose 0.6% as expected.  Mortgage interest rates finished the week better by approximately 1/4 of a discount point.

LOOKING AHEAD

Economic
Indicator
Release
Date & Time
Consensus
Estimate

Analysis
Existing Home Sales Monday, Nov. 23,
10:00 am, et
5.55M Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
Treasury Auctions begin Monday, Nov. 23,
1:15 pm, et
None Important.  Notes will be auctioned.  Strong demand may lead to lower mortgage rates.
Q3 GDP Tuesday, Nov. 24,
8:30 am, et
Up 1.5% Very important.  The aggregate measure of US economic production.  Weakness may lead to lower rates.
Consumer Confidence Tuesday, Nov. 24,
10:00 am, et
97.4 Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.
Weekly Jobless Claims Wednesday, Nov. 25,
8:30 am, et
269K Important.  An indication of employment.   Higher claims may result in lower rates.
Personal Income and Outlays Wednesday, Nov. 25,
8:30 am, et
Unchanged,
Up 0.1%
Important.  A measure of consumers’ ability to spend.  Weakness may lead to lower mortgage rates.
PCE Core Inflation Wednesday, Nov. 25,
8:30 am, et
Up 0.1% Important.  A measure of price increases for all domestic personal consumption.  Weaker figure may help rates improve.
Durable Goods Orders Wednesday, Nov. 25,
8:30 am, et
Down 0.6% Important.  An indication of the demand for “big ticket” items.  Weakness may lead to lower rates.
U of Michigan Consumer Sentiment Wednesday, Nov. 25,
10:00 am, et
93.3 Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.
New Home Sales Wednesday, Nov. 25,
10:00 am, et
474K Important.  An indication of economic strength and credit demand.  Weakness may lead to lower rates.

Consumer Confidence

The Conference Board releases the Consumer Confidence Index on the last Tuesday of every month.  The report details the levels of confidence individual households have in the performance of the economy.  The data is derived from a survey of 5,000 households nationwide.  The survey polls consumer opinions on current business conditions, their jobs, their incomes, and their future spending plans.  The consumer confidence index is significant in that it provides a precursor into consumers’ willingness to spend in the months ahead.  However, many analysts point out that willingness to spend does not always convert to actual expenditures.

Copyright 2015. All Rights Reserved. Mortgage Market Information Services, Inc. www.ratelink.com The information contained herein is believed to be accurate, however no representation or warranties are written or implied.

Golf

Weekly Mortgage Market in Review

Market Comment

Mortgage bond prices finished the week near unchanged which kept rates in check. Trading was negative the beginning of the week tied to comments from Fed officials. San Francisco Federal Reserve Bank President John Williams said the last meeting to keep rates unchanged was a “close call.” He went on to note, “the public or market perceptions were that we had completely moved off 2015, and I don’t think that was accurate.” Cleveland Fed President Mester said the economy can handle a rate increase. The end of the week data helped alleviate some of the earlier weakness. Retail sales and producer prices were lower than expected. Mortgage interest rates finished the week near unchanged despite the volatility.

LOOKING AHEAD

Economic
Indicator
Release
Date & Time
Consensus
Estimate

Analysis
Consumer Price Index Tuesday, Nov. 17,
8:30 am, et
Down 0.2%,
Core up 0.1%
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Industrial Production Tuesday, Nov. 17,
9:15 am, et
Up 0.2% Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization Tuesday, Nov. 17,
9:15 am, et
77.2% Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates.
NAHB Housing Index Tuesday, Nov. 17,
10:00 am, et
65 Moderately Important. A measure of single family housing. Weakness may lead to lower mortgage rates.
Housing Starts Wednesday, Nov. 18,
8:30 am, et
1213K Important. A measure of housing sector strength. Weakness may lead to lower rates.
Fed Minutes Wednesday, Nov. 18,
2:00 pm, et
None Important. Details of the last Fed meeting will be thoroughly analyzed.
Weekly Jobless Claims Thursday, Nov. 19,
8:30 am, et
272K Important. An indication of employment. Higher claims may result in lower rates.
Philadelphia Fed Survey Thursday, Nov. 19,
10:00 am, et
-3.8 Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Leading Economic Indicators Thursday, Nov. 19,
10:00 am, et
Down 0.2% Important. An indication of future economic activity. A smaller increase may lead to lower rates.

Industrial Production

The Federal Reserve releases the Industrial Production report each month. It is a real measure of output from manufacturing, mining, electric, and gas utilities. The data is significant in that it provides an indicator of the state of the economy. Analysts use the data to attempt to determine market direction. The Fed uses the data to help set the course for monetary policy. Generally the Fed likes to see steady growth in the economy with little price pressures.

Mortgage interest rates generally react favorably to weaker than expected industrial production data. In times of economic weakness investors often move out of stocks and into mortgage bonds. When things look good investors often move out of bonds and back into stocks. We have seen these patterns in recent months. Floating into significant economic data always has some risk involved. Now is a great time to take advantage of mortgage interest rates.


Copyright 2015. All Rights Reserved. Mortgage Market Information Services, Inc. www.ratelink.com The information contained herein is believed to be accurate, however no representation or warranties are written or implied.

Golf

Mortgage Market Update

Market Comment – September 26, 2015

Mortgage bond prices finished the week lower which pushed rates higher. Rates were worse the beginning of the week in response to 100 plus point gains in stocks Monday morning. Some of the losses were reversed Tuesday as stocks struggled. The data was mixed. Existing home sales were weaker than expected. The FHFA Housing Price Index was higher than expected. Weekly jobless claims were 267K versus the expected 271K. Final Q2 Gross Domestic Product was 3.9% compared to the expected 3.7%. Comments from Fed Chair Yellen Thursday night caused rate concerns (see below.) Mortgage interest rates finished the week worse by about 3/8 to 1/2 of a discount point.

LOOKING AHEAD
Continue reading