May 31st, 2024 2:16 PM by T. Fanning
Happy Friday, I hope you have a good weekend!
This week's core PCE inflation came in at 0.2%, lower than the 0.3% forecast. Bond markets can breathe a bit easier about the first quarter’s inflation. Even though the actual figure was nearly 0.3%, other parts of the report were bond-friendly too. It was a rollercoaster week for interest rates, starting with rates going up and ending coming back down. Overall, rates were mixed.
Next week, the markets will closely monitor a full schedule of key economic releases. This begins with the ISM manufacturing index on Monday morning and culminates with the monthly Employment report on Friday morning, along with several moderately important reports in between.
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
As always, please let me know if I can help you, your friends/family/potential buyers/borrowers!
Last Updated: 5/31/24
Friday's bond market has opened in positive territory following mostly favorable economic news. Stocks are looking to close the week on a negative note with the Dow down 7 points and the Nasdaq down 51 points. The bond market is currently up 16/32 (4.49%). This morning's early bond gains, along with some strength late yesterday, should improve this morning's mortgage rates by approximately .250 of a discount point.
April's Personal Income and Outlays report was posted at 8:30 AM ET. It is this report that gave us the Personal Consumption Expenditures price indexes (PCE), which are the Fed's preferred inflation reading over the various reports that we see monthly and quarterly. The overall PCE reading for April rose 0.3% while the core reading rose 0.2%. Both matched forecasts. The year-over-year readings were unchanged from March's rate, as they were expected to do.
This morning's good news came in the other headline numbers in the report, such as the 0.2% rise in consumer spending when it was expected to rise 0.4%. Personal income rose 0.3%, just as analysts predicted. The softer rise in spending is good news for bonds and mortgage rates because that category makes up over two-thirds of the U.S. economy. Slower spending should translate into weaker economic growth that makes bonds more attractive to investors.
Next week has a full schedule of relevant economic releases that the markets will need to digest. There is something of interest set for release each day, beginning with the highly important ISM manufacturing index late Monday morning and ending with the almighty monthly Employment report early Friday morning. Between those two there are a handful of moderately important reports 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... 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.*
*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
Company NMLS ID: 479289 | LO NMLS: 208694
CO License: 100008854
FL Company License: MBR4416 | FL License: LO89221
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.