The Home Loan Mortgage Blog

Hi! Hope your week’s been great!

The Federal Reserve cut its key interest rate by half a percentage point on Wednesday to mitigate economic slowdown. The central bank noted slower job gains and progress toward its 2% inflation goal. Fed Chair Jay Powell emphasized that the labor market and economy remain solid, and the larger cut aims to sustain this stability. Ironically, rates trended up ever so slightly this week.

With the FOMC meeting behind us, the Fed's quiet period is over. Next week, numerous Fed-member speeches, including one by Chairman Powell on Thursday morning, could influence bond trading and mortgage pricing throughout the week.

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: 9/20/24

Friday's bond market has opened in negative territory despite little to drive trading this morning. Stocks are also showing losses with the Dow down 50 points and the Nasdaq down 61 points. The bond market is currently down 12/32 (3.75%), which should push this morning's mortgage rates higher by approximately .250 of a discount point.

We don't have any relevant economic data being released today. We are likely seeing traders digest this week's events and data that raises optimism the U.S. economy will continue to grow. The Fed's .500 rate cut has altered theories about the direction of the economy in the coming months. They lower key rates to boost economic activity to avoid slipping into a recession. This week's news changed the opinion of some analysts that were predicting the economy would weaken, now predicting little chance of a recession. Since bonds tend to thrive in weaker economic conditions, we are seeing negative movement as a result.

Next week has plenty of economic data and other events scheduled that may influence mortgage rates. It starts light with nothing of importance set for Monday but gets more active as the week progresses. The more important releases come late in the week, such as August's Durable Goods Orders and Personal Income and Outlays that includes the Fed's preferred inflation gauges. In addition to those and a few moderately important reports, there are also a couple of short-term Treasury auctions that may come into play during afternoon trading midweek.

Now that the FOMC meeting is behind us, so is the Fed's required quiet period where members cannot speak publicly about the economy or monetary policy. Those Fed-member speeches get into full swing next week with a good number of them scheduled, including one by Chairman Powell Thursday morning. They are spread throughout the week, meaning they may affect bond trading and mortgage pricing multiple days. 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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