March 12th, 2021 11:27 AM by T. Fanning
Rates ended the week mixed, with conventional loans slightly improving and government loans (FHA, VA, USDA) slightly worsening. Next week has a couple of highly important events taking place that have the potential to heavily influence the markets and mortgage rates, including a key consumer spending report and another FOMC meeting with revised economic projections. There are also a few other moderately important releases that we will be watching. Monday has nothing scheduled that we need to be concerned with.*
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 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, your friends/family/potential buyers/borrowers!
Last Updated: 3/12/21
Friday's bond market has opened well in negative territory, extending overnight weakness in the international markets. Stocks are mixed with the Dow up 145 points and the Nasdaq down 155 points. The bond market is currently down 23/32 (1.61%), which should push this morning's mortgage rates higher by approximately .250 of a discount point.
February's Producer Price Index (PPI) was posted at 8:30 AM ET, revealing a 0.5% rise in the overall index and a 0.2% increase in the more important core data. Both readings fell within analysts' forecast range, indicating an increase in inflationary pressures at the producer level of the economy, but not at a surprising rate. Technically speaking, rising inflation is bad news for long-term securities such as mortgage bonds. However, today's report didn't alter trader's opinions for the better or worse. That leaves us to consider the data neutral for mortgage rates.
Also released this morning was the University of Michigan's Index of Consumer Sentiment for March. It came in at 83.0, up from February's 76.8 and higher than forecasts. The increase means more surveyed consumers felt better about their own financial situations than did last month. Since stronger confidence usually means consumers are more likely to spend money in the near future, fueling economic growth, this report should be considered unfavorable for bonds and mortgage rates.
It appears that this morning's bond selling is more about President Biden's speech last night than it is about today's economic data. Bonds went into selling mode during overnight trading, supposedly due to his comments regarding economic growth and the impact the stimulus package is going to have on it. This falls under the theory that good news for the economy is bad news for bonds and mortgage rates. Whether that is indeed the reason for this morning's weakness, or if it is just another turn in the recent rollercoaster ride the bond market has been on, remains to be seen. Regardless though, today looks to be a bad one for mortgage rates.
Next week has a couple of highly important events taking place that have the potential to heavily influence the markets and mortgage rates, including a key consumer spending report and another FOMC meeting with revised economic projections. There are also a few other moderately important releases that we will be watching. Monday has nothing scheduled that we need to be concerned with. 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/DailyRateAdvisoryLO NMLS: 208694 | CO License: 100008854 | Company NMLS ID: 479289
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.