The Home Loan Mortgage Blog

Weekly Update - 6/10/22

June 10th, 2022 9:59 AM by T. Fanning

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Hi, I hope you’re having a good Friday.

 

It wasn’t a great week for interest rates – across the board, rates were up from last Friday’s numbers. Next week has plenty for the markets to digest, with economic releases scheduled everyday except Monday. Some of the data is considered to be extremely important, including a key measure of consumer spending and the sister release of today's CPI (May's Producer Price Index). In addition to the abundance of economic data, we also have an FOMC meeting that is expected to yield another half point increase to key short-term interest rates. This meeting includes revised economic projections and a press conference with Fed Chairman Powell.*

 

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 Non-QM (stated income, verified assets for self-employed borrowers)! 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!


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Last Updated: 6/10/22

 

Friday's bond market has opened in negative territory following the release of this morning's big inflation report. Stocks are showing significant losses with the Dow down 759 points and the Nasdaq down 361 points. The bond market is currently down 14/32 (3.09%), which should cause an increase in this morning's mortgage rates of approximately .500 of a discount point if compared to Thursday's early pricing.

 

Yesterday's 30-year Treasury Bond auction went much better than Wednesday's 10-year Note sale. The benchmarks showed a decent demand for the securities, helping bonds improve during early afternoon trading. Those gains were enough for some lenders to issue an intraday improvement in rates before the end of the day. Many may have waited for this morning's data before reflecting that move.

 

The first of this morning's two economic releases was the highly important Consumer Price Index (CPI) for May. It revealed a 1.0% increase in the overall reading and a 0.6% rise in the more important core data that excludes volatile food and energy costs. Both readings were higher than expected, indicating inflationary pressures at the consumer level of the economy were stronger than thought. Since bonds are sensitive to rising inflation, this is unfavorable news for mortgage rates and is the driving force of this morning's bond selling.

 

June's preliminary reading to the University of Michigan's Index of Consumer Sentiment was also posted this morning, giving us a measurement of consumer willingness to spend. It came in at 50.2, falling well short of the 58.8 that was expected. The large drop means surveyed consumers were much more concerned about their own financial situations than they were last month. Waning confidence usually translates into softer consumer spending, limiting economic growth. Therefore, we can label this report to be good news for bonds and mortgage rates even though it doesn't look like it by this morning's trading.

 

Next week has plenty for the markets to digest, with economic releases scheduled everyday except Monday. Some of the data is considered to be extremely important, including a key measure of consumer spending and the sister release of today's CPI (May's Producer Price Index). In addition to the abundance of economic data, we also have an FOMC meeting that is expected to yield another half point increase to key short-term interest rates. This meeting includes revised economic projections and a press conference with Fed Chairman Powell. Look for details on market expectations of the meeting and all of the week's relevant 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

www.nmlsconsumeraccess.org

Posted by T. Fanning on June 10th, 2022 9:59 AM

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