July 29th, 2022 10:17 AM by T. Fanning
Happy Friday,
Although the Feds raised their benchmark rate .75%, mortgage rates reacted very favorably, ending the week lower. Next week's calendar opens Monday and closes Friday with major economic reports. We will get July's manufacturing index from the Institute for Supply Management late Monday morning and the almighty monthly Employment report Friday morning. In between are a couple of moderately important releases also.*
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: 7/29/22
Friday's bond market has opened in negative territory following stronger than expected economic news. Stocks are responding with gains of 101 points in the Dow and 166 points in the Nasdaq. The bond market is currently down 8/32 (2.69%), which should erase yesterday's afternoon gains to keep this morning's mortgage rates close to Thursday's early pricing.
June's Personal Income and Outlays report was posted at 8:30 AM ET, revealing a 0.6% rise in income and a 1.1% jump in spending. Both readings were stronger than expected, indicating consumers earned more than thought (ability to spend) and actually spent more than predicted. This data is relevant because consumer spending makes up over two-thirds of the U.S. economy.
Another important reading in this data is the Fed's preferred inflation index referred to as the PCE. The month over month overall reading and more important core reading showed increases of 1.0% and 0.6% respectively. Both matched forecasts, but the year over year increases were higher than expected. This is what could be driving bonds into negative territory this morning since it points towards stronger than forecasted inflation.
Today's second release was the 2nd Quarter Employment Cost Index (ECI) that rose 1.3% during the April through June months. Analysts were calling for a 1.1% increase, meaning employer costs for wages and benefits rose more than many had predicted. This is also an inflation warning that forces us to label the report negative for bonds and mortgage rates.
Finishing this week's calendar was the release of July's revised University of Michigan Index of Consumer Sentiment at 10:00 AM ET. They announced a reading of 51.5 that was a bit higher than the expected 51.1, but not enough of a variance to cause any concern in the bond market. The upward revision means surveyed consumers were a little more confident in their own financial situations and are more likely to make a large purchase in the near future. While we have to say the report is bad news for bonds and mortgage rates, it has not had an impact on this morning's pricing.
Next week's calendar opens Monday and closes Friday with major economic reports. We will get July's manufacturing index from the Institute for Supply Management late Monday morning and the almighty monthly Employment report Friday morning. In between are a couple of moderately important releases also. Look for details on all of next week's activities in Sunday evening's weekly preview.
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... Lock 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
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