The Home Loan Mortgage Blog

Weekly Update - 12/11/20

December 11th, 2020 12:53 PM by T. Fanning



Hey, I hope you're enjoying the snow!

Rates ended the week a tad lower from last Friday's numbers. 
Next week has a handful of relevant economic releases scheduled that may influence mortgage rates. Next week brings us very few economic reports for the markets to digest, but one is considered to be highly important to the financial and mortgage markets. In addition to the limited economic calendar, there is the final FOMC meeting of the year taking place that will also include revised economic projections from the Fed. The week starts off light with nothing of importance scheduled the early days though.*

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% Down Conventional Program; 1.50% Down FHA Advantage Program; CHFA Financing; Down Payment Protection program; HomeStyle renovation program; and a jumbo, 5% down program. We also can do hobby farms, Ag properties and Alt-A (stated income, verified assets for self-employed borrowers)! To see a detailed list of programs, visit our website:  www.hlmcolorado.com/mortgageprograms

As always, please let me know if I can help you/friends/family/potential buyers/borrowers!                

Last Updated: 12/11/20

Friday's bond market has opened in positive territory with stocks showing losses and fears of a government shutdown take centerstage. Early stock weakness has the Dow down 54 points and the Nasdaq down 53 points. The bond market is currently up 7/32 (0.88%), which should improve this morning's mortgage rates slightly if comparing to Thursday's early pricing.

Yesterday's 30-year Treasury Bond auction went much better than Wednesday's 10-year Note sale with the benchmarks showing a noticeably stronger interest in the securities. The results appear to have contributed to yesterday's afternoon bond gains but did not lead to widespread intraday improvements to mortgage rates.

November's Producer Price Index (PPI) was posted at 8:30 AM ET this morning, revealing a 0.1% rise in the overall and core data readings. Both were expected to show a 0.2% increase, meaning inflationary pressures at the producer level of the economy were a little softer than thought. Since rising inflation makes bonds less appealing to investors, we can consider the data favorable for the bond market and mortgage rates.

December's preliminary reading to the University of Michigan's Index of Consumer Sentiment was released at 10:00 AM ET. It came in higher than expected at 81.4, indicating surveyed consumers felt better about their own financial situations than analysts were predicting. Because stronger sentiment usually means consumers are more apt to spend, the surprise increase is bad news for mortgage rates.

Also worth noting is a possible government shutdown at midnight tonight if Congress fails to pass a short-term government funding bill. It looked as if enough progress had been made earlier in the week that this situation would have easily been averted. Late objections about the Continuing Resolution in the Senate raises the possibility of the government shutting tonight. The Continuing Resolution is the temporary funding bill to keep the government open for another week to allow the parties more time to negotiate a final package.

Generally speaking, another shutdown would be bad news for stocks, especially when the current status of the economy is taken into consideration. A shutdown means no paychecks for government employees and contractors. It also shuts down federal agencies related to the mortgage industry such as FHA staff and IRS employees that are needed for income verification as part of the underwriting process. While the theory that bad news for stocks is good news for bonds and mortgage rates may still apply here, it will certainly be a difficult time to try and close on a home purchase or refinance if the government does shut tonight. Hopefully, a resolution can be made today to avoid the shutdown, or at the very least get it done over the weekend.

Next week brings us very few economic reports for the markets to digest, but one is considered to be highly important to the financial and mortgage markets. In addition to the limited economic calendar, there is the final FOMC meeting of the year taking place that will also include revised economic projections from the Fed. The week starts off light with nothing of importance scheduled the early days though. 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...
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.*

*http://www.hlmcolorado.com/DailyRateAdvisory




LO NMLS: 208694 | CO License: 100008854 | Company NMLS ID: 479289
Regulated by the Colorado Division of Real Estate
www.nmlsconsumeraccess.org
Posted in:General
Posted by T. Fanning on December 11th, 2020 12:53 PM

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