November 11th, 2022 11:52 AM by T. Fanning
Happy Veterans Day! A sincere thank you to all who served and are serving!
Rates had a phenomenal week due to better-than-expected inflation news. November's preliminary reading of the University of Michigan's Index of Consumer Sentiment will be posted at 10:00 AM ET tomorrow. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 59.6, down a little from October's final reading of 59.9. That would be considered slightly favorable news for bonds because waning sentiment means consumers are less optimistic about their own financial situations and are less likely to make large purchases in the near future. With consumer spending making up over two-thirds of our economy, any related data is watched closely. The lower the reading, the better the news it is for mortgage shoppers.*
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans; FHA and VA 1x Close Construction-Perm; 1.50% Down FHA Advantage Program; CHFA Financing; HomeStyle renovation program; and a Jumbo, 5% down program. We also can do hobby farms, Ag properties and Non-QM (stated income, verified assets for self-employed borrowers)! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
As always, please let me know if I can help you, your friends/family/potential buyers/borrowers!
Last Updated: 11/10/22
Thursday's bond market has opened up sharply following the release of extremely favorable inflation data. Stocks are reacting to the same headlines, fueling a huge rally that is pushing the Dow up 894 points and the Nasdaq up 594 points. The bond market is currently up 58/32 (3.85%), which will create a significant improvement in this morning's mortgage rates. The spike in mortgage bond prices this morning is too large to estimate just how it will translate to actual mortgage pricing since some lenders may not reflect the full move in today's rates in case there is a retreat later in the day.
Yesterday's 10-year Treasury Note auction did not go well with the benchmarks showing a weak demand for the securities compared to other recent sales. The bond market initially reacted negatively once results were posted but was able to recover that move before closing. We have a 30-year Bond auction taking place today with results being posted at 1:00 PM ET. Another ugly sale could lead to afternoon weakness in bonds that may cause a slight upward revision to mortgage rates before the end of the day.
Today's major economic release was October's Consumer Price Index (CPI) at 8:30 AM ET. It revealed a 0.4% rise in the overall CPI and a 0.3% increase in the core data that excludes volatile food and energy prices. Both readings were well below expectations up 0.7% and 0.5% respectively, signaling inflationary pressures at the consumer level of the economy were softer than thought. That is very good news for bonds and mortgage rates because waning inflation makes longer-term securities such as mortgage bonds, more attractive to investors. It also raises the possibility of the Fed slowing their short-term interest rate hikes sooner than later.
Also posted early this morning was last week's unemployment numbers that showed 225,000 new claims for benefits were filed last week. This was a bit higher than the 220,000 that was expected and an increase from the previous week's 218,000 initial filings. We can label the release favorable for rates, but the truth is the CPI is really the only thing in focus this morning. That report carries much more significance than this weekly update does.
The bond market will be closed tomorrow in observance of the Veteran's Day holiday and will reopen for regular hours Monday, although the stock markets have a full day of trading. There is no early close today ahead of the holiday. If lenders are open for business tomorrow, they probably will use this afternoon rates or not allow new locks until Monday morning.
November's preliminary reading of the University of Michigan's Index of Consumer Sentiment will be posted at 10:00 AM ET tomorrow. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 59.6, down a little from October's final reading of 59.9. That would be considered slightly favorable news for bonds because waning sentiment means consumers are less optimistic about their own financial situations and are less likely to make large purchases in the near future. With consumer spending making up over two-thirds of our economy, any related data is watched closely. The lower the reading, the better the news it is for mortgage shoppers.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Float if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.*
*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
Company NMLS ID: 479289 | LO NMLS: 208694
CO License: 100008854
FL Company License: MBR4416 | FL License: LO89221
Regulated by the Colorado Division of Real Estate
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.