April 14th, 2023 10:49 AM by T. Fanning
Hello, I hope you had a great week!
Rates again ended the week with only minor changes. Next week has only a couple of relevant economic reports scheduled for release, most of which are housing related. There also is another Treasury auction and the Fed Beige Book release set for midweek. Furthermore, corporate earnings season will pick up steam next week, likely influencing stocks directly and bonds indirectly. It begins with nothing of importance set for Monday.*
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans (100% FHA financing); 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: 4/14/23
Friday's bond market has opened well in negative territory to end the week on a sour note for mortgage rates. Stocks are much calmer with the Dow down 56 points and the Nasdaq up 23 points. The bond market is currently down 16/32 (3.50%), which should push this morning's mortgage rates higher by approximately .500 - .625 of a discount point if compared to Thursday's early pricing.
Yesterday's 30-year Treasury Bond auction drew a similar demand as Wednesday's 10-year Note sale did. The benchmarks showed interest in the securities was average compared to other recent sales. This caused a slight negative move in bonds after results were posted at 1:00 PM. It may have contributed to some lenders revising rates higher during late afternoon trading.
Today's highly important economic release was March's Retail Sales data at 8:30 AM ET. The Commerce Department announced a 1.0% decline in consumer spending, much weaker than the 0.4% decrease that was expected. A secondary reading that excludes more costly and volatile auto transactions also came in much softer than predicted. Since consumer spending makes up over two-thirds of the U.S. economy and this is a sign of weakness, we can easily consider the data very good news for bonds and mortgage rates.
The second release of the morning was March's Industrial Production data at 9:15 AM ET that revealed a 0.4% rise in output at U.S. factories, mines and utilities. This was a little stronger than the 0.2% increase that was expected, hinting at stronger manufacturing activity. Accordingly, we can consider the report to be slightly unfavorable for mortgage rates.
Closing out this week's calendar was the University of Michigan's Index of Consumer Sentiment for April at 10:00 AM ET. It stood at 63.5, up from March's final 62.0. The higher reading means more surveyed consumers felt better about their own financial situations than did last month. Because rising confidence usually translates into stronger consumer spending levels, the increase is bad news for bonds and mortgage rates.
Out of this morning's three economic reports, only one of them carries enough importance to cause this morning's bond sell-off and it gave us favorable news. It looks as if traders are paying more attention to tidbits of information from overseas than data here. Of particular interest is European Union central bank talk regarding more rate hikes in the future due to stubbornly high inflation. Anytime the bond market hears about high inflation numbers, it is safe to assume we will get a negative reaction and an increase to mortgage rates.
Next week has only a couple of relevant economic reports scheduled for release, most of which are housing related. There also is another Treasury auction and the Fed Beige Book release set for midweek. Furthermore, corporate earnings season will pick up steam next week, likely influencing stocks directly and bonds indirectly. It begins with nothing of importance set for Monday. 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... Lock 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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