Mortgage Commentary
#1
07-17-2007, 09:42 AM
Mortgage Commentary
Monday’s bond market has opened in positive territory despite early stock gains and a lack of economic news. The stock markets are showing sizable improvements with the Dow up 71 points and the Nasdaq up 4 points. The bond market is currently up 4/32, but we will likely not see an improvement in this morning’s mortgage rates as a result of weakness in bonds late Friday.
This week brings us the release of five important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.
The first piece of data comes tomorrow morning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.1% increase in the overall reading and a 0.2% rise in the core data reading. The bond market should react quite favorably to weaker than expected readings, but a bigger than expected jump in the core reading could send mortgage rates higher.
June’s Industrial Production data will also be posted tomorrow morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.3% rise in production, indicating that the manufacturing sector showed moderate growth during the month. A smaller than expected increase would be good news and could help push mortgage rates slightly lower tomorrow.
Fed Chairman Bernanke will speak before the House Financial Services Committee Wednesday morning and the Senate Banking Committee Thursday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns. This should create a great deal of volatility in the markets during the testimony and the question and answer session that follows. If he indicates that inflation is a threat to the economy, we will likely see the bond market tank and mortgage rates rise.
Overall, I think we will see the most movement in mortgage pricing this week tomorrow or Wednesday due to the release of the inflation related indexes and Mr. Bernanke’s testimony Wednesday.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
This week brings us the release of five important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.
The first piece of data comes tomorrow morning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.1% increase in the overall reading and a 0.2% rise in the core data reading. The bond market should react quite favorably to weaker than expected readings, but a bigger than expected jump in the core reading could send mortgage rates higher.
June’s Industrial Production data will also be posted tomorrow morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.3% rise in production, indicating that the manufacturing sector showed moderate growth during the month. A smaller than expected increase would be good news and could help push mortgage rates slightly lower tomorrow.
Fed Chairman Bernanke will speak before the House Financial Services Committee Wednesday morning and the Senate Banking Committee Thursday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns. This should create a great deal of volatility in the markets during the testimony and the question and answer session that follows. If he indicates that inflation is a threat to the economy, we will likely see the bond market tank and mortgage rates rise.
Overall, I think we will see the most movement in mortgage pricing this week tomorrow or Wednesday due to the release of the inflation related indexes and Mr. Bernanke’s testimony Wednesday.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
#2
07-17-2007, 10:39 AM
RE: Mortgage Commentary
we just locked at 6 3/8%. we are closing in about 45 days. i couldn't take the stress of watching the rates anymore. hopefully this works out well for us.
Thread
Thread Starter
Forum
Replies
Last Post