December 13th, 2024 1:37 PM by T. Fanning
Hi, happy Friday!
It's been a tough week for mortgage rates, with steady increases each day and no clear reason tied to new economic data. Typically, weaker data lowers rates, but despite favorable initial market reactions, the bond market reversed course by day's end, driving rates higher.
Next week promises significant activity for financial and mortgage markets. Monday is quiet, but the rest of the week features key events, including the Retail Sales report, PCE inflation indexes, the year's final FOMC meeting, and a Treasury auction. Several moderately important economic releases are also scheduled, making it a busy week for mortgage rates.
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans (100% FHA financing); Conventional 0% down; Conventional, 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 can also do non-traditional programs! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
Last Updated: 12/13/24
Friday's bond market has opened in negative territory as the upward momentum in yields continues. Stocks are mixed with the Dow down 36 points and the Nasdaq up 116 points. The bond market is currently down 8/32 (4.36%), which should cause another increase of approximately .250 of a discount point in mortgage pricing. If you saw an upward revision late yesterday, you should see a smaller increase this morning than those who did not get a change Thursday afternoon.
Yesterday's 30-year Treasury Note auction drew a much different interest than Wednesday's 10-year Note sale did. The benchmarks pointed to an average level of demand, at best, compared to other recent sales. Bonds started to weaken after results were announced at 1:00 PM ET, eventually leading to an upward revision in rates from many lenders. This did not come as a complete surprise since there appeared to be a muted response to the stronger than expected inflation data earlier in the day. After Wednesday's decent sale created failed optimism about yesterday's auction, bonds slid after results were posted.
There is no relevant economic data set for release today. This morning's early bond losses are likely due to weakness in overseas markets and concerns about next week's FOMC meeting. The general consensus is the Fed will make a quarter-point cut to key short-term interest rates, but going forward after that is being debated. There also are worries what may be said in the post-meeting statement and press conference regarding how the Fed feels inflation will do under the new administration and how it may impact monetary policy. We can expect the cautious tone to remain until those questions get answered.
Next week has plenty scheduled that will likely affect the financial and mortgage markets. It starts light with nothing happening Monday, the only day without at least one item listed. The rest of the week has highly important economic releases scheduled that will give us insight into consumer spending (Retail Sales report) and the Fed's preferred inflation gauges (PCE indexes). Between them is the last FOMC meeting of the year and a Treasury auction. Other activities include a handful of moderately important economic releases. It appears that it will be an extremely active week for mortgage rates. 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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