Will New Mortgage Regulations Bruise Housing Market?
by ADMIN on JANUARY 17, 2013
Will New Mortgage Regulations Bruise Housing Market?
There have been predictions of tidal waves of regulations coming in the next six months. It will probably be focused on a small percentage of loan applicants.
Mortgage industry insider warns about a stifling regulatory cliff
Back in December, The Washington Times reported that lending to homebuyers in the United States remained little above the depressed levels hit during the recession because banks are still wary about lending because of this tidal wave of regulations that will be coming out this year.
Five years of criticism of banks by politicians, the public, the media and regulators have left the industry averse to taking risks, said David H. Stevens, president of the Mortgage Bankers Association, noting that banks today are willing to make loans only to the wealthiest or most creditworthy borrowers unless the borrower has government backing. “The pendulum may have swung too far.
We’re at a point right now where banks are afraid to make a bad loan,” he said in an interview with editors and reporters at The Times.Federal Reserve Chairman Ben S. Bernanke is concerned about the slowdown in lending and has sought to coax more credit out of banks by driving interest rates on mortgages to record lows, but many overzealous state and federal regulators seem oblivious to the harm they are doing to the market and the broader economy through an onslaught of regulations and enforcement actions against banks, Mr. Stevens said.
Tidal Wave of Regulations
From Mortgage News Daily, the future of the mortgage industry will be bruised by the coming tidal wave of regulations over the next six months.
David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA), told member of the Exchequer Club on Wednesday that in the 12 months since he last addressed them there had been some progress in clearing the uncertainty of a year earlier and an improving housing market. The first of the rules mandated under Dodd Frank have come out of the Consumer Financial Protection Bureau (CFPB) and the housing market appears to be in a broad recovery. The new regulations, he said, will help shape the lending environment in which MBA member must operate and homeowners must navigate.
While this won’t guarantee that it will solve the problems of the housing & mortgage markets. The rules must be thought through and be mindful of the impacts down the road.
90% of mortgages go through GSE and FHA underwriting, so new rules are unlikely to impact the tightening credit. Unfortunately, it probably won’t loosen it up either. But Stevens said there is still much more to be done. MBA members have been flooding the office with questions and concerns about the rule and so far the association has identified three major items that need a closer look.
• The three percent point and fee limit is overly inclusive because it includes affiliated fees and compensation for loan officers.
• The 43 percent DTI limit on jumbo loans will make those loans more expensive in high cost areas. Other attempts to apply an ability to repay standard have completely exempted large balance loans which are necessarily made to higher income households and an exemption based on loan size might make sense.
• The three percent point and fee cap, and the 150 basis point over APOR calculation for the safe harbor, could limit access or increase the cost of lower balance loans.
t’s clear we need a balanced housing policy in the United States. The United Kingdom banks are exiting the lending business due to risks created by their regulatory environment.
Major banks and lenders are exiting the mortgage business because of the high losses from defaults on loans made during the housing bubble and risks of further losses through regulation and litigation, Mr. Stevens said. He pointed to Metropolitan Life’s recent decision to drop its mortgage-lending division and Wells Fargo’s decision to shut down its wholesale lending channel.
So What’s It All Mean?
Chances are it won’t impact you. Too find out for sure, contact your loan officer to find out more about your particular situation.
This Week’s Market Commentary
byADMIN on JANUARY 7, 2013
This week brings us little to drive bond trading and mortgage rates. There is only one monthly economic report scheduled, which is considered to be of low importance to the markets anyhow. That would give the appearance that we are in for a quiet week for mortgage rates, but I don’t believe this will be the case. There probably will be less activity and movement than we saw last week. However, I suspect that we will still end up seeing a fair amount of movement in rates between Monday’s opening and Friday’s closing.
There is nothing of importance scheduled to be posted Monday or Tuesday. This means that the stock markets will probably dictate bond directionthere first part of the week. If the major stock indexes rally again, they will pressure bonds leading to higher mortgage rates. However, stock weakness should allow bond prices to rise and mortgage rates to improve.
Besides the sole monthly economic report late in the week, we also have two Treasury auctions that have the potential to influence mortgage pricing. They will be held Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important of the two as it will give us a better indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would likely result in upward revisions to mortgage rates.
Also worth noting is some news from overseas before the markets open Thursday. The Bank of England’s monetary policy announcement (equivalent to our FOMC) will be released at 7:15 AM ET while the European Central Bank will announce at 7:45 AM ET. The ECB will draw the most attention as global investors are extremely concerned about the Eurozone and what actions will be taken to shore up some of its’ member’s finances. We should be on alert for a reaction in the bond and mortgage markets if they yield any surprises.
November’s Goods and Services Trade Balance will be posted early Friday morning. It measures the size of the U.S. trade deficit and is expected to show a $41.8 billion deficit. This data usually does not directly affect mortgage rates, but it does influence the value of the U.S. dollar versus other currencies. A stronger dollar makes U.S. securities more attractive to international investors because they are worth more when sold and converted to the investor’s domestic currency. But unless we see a significant variance from forecasts, I don’t believe this data will lead to a change in mortgage rates Friday.
Overall, it would be easy to say this will be a calm week for the mortgage markets due to the lack of important or highly influential events scheduled. I would not be surprised to see stocks move lower for the week, helping to push funds back into bonds. We saw some improvement in bonds late Friday, so if your lender did not improve rates during afternoon trading, you have an improvement of approximately .125 – .250 of a discount point waiting at Monday’s opening. That could shrink or get larger depending on how the markets perform during early morning trading, but there is a decent possibility of starting the week off in the right direction. With the benchmark 10-year Treasury Note currently yielding 1.90%, I believe there is more likelihood of seeing bonds improve (pushing yields and mortgage rates lower) in the immediate future than seeing them move lower (raising yields and mortgage pricing). Of course, this is just speculation and only an opinion, so please maintain contact with your mortgage professional if still floating an interest rate.
Preparing Your Yard for Winter
by ADMIN on OCTOBER 16, 2012
Preparing Your Yard for Winter
Welcome to part 3 of our 4 part series on preparing your home for winter. Here in the Great Northwest, need to prepare for frost, ice, snow and heavy rains. Some meteorologists are predicting that we’ll be getting an El Nino year. So the good news is it will be a warmer winter (unless you enjoy snow sports), but the bad news is that we will get more rain which could also be considered good news since we would be filling up our reservoirs and aquifers.
So here’s what you can do to get your yard ready for frost and heavy rains:
Remove Debris
First things first, you need to remove the debris before winter arrives including leaves, rocks, sticks, trash, and dead flowers. This will keep your yard and flowerbeds looking nice throughout the fall and winter months, as well as reducing the amount of yard work you will need to do in the spring.
Bushes
Roses, azaleas, and hibiscus will need to be protected against the cold weather. You can get creative with cardboard or garbage bags if you know there is a frost warning. Make certain you hold the cover down in place with stakes, bricks or heavy rocks.
Add mulch around the roots, but make sure it doesn’t touch the base of the plant. Give the plants a good watering before you turn off your sprinklers.
Trees
While the weather is still pleasant, put mulch around the base of the trees to help the tree retain water in the roots, and keep the soil at a steady temperature. This also cuts down on the weeds you will have to pull in the spring.
Mulch can be bark chippings, straw, pine needles, or a mixture of things. You can get free chippings by contacting your local tree removers and asking if they’ll drop off some mulch. But be aware that they may have a minimum amount that they drop off.
In a few weeks, you will want to trim your trees, bushes and roses. But, don’t prune now because the buds that will open in the spring have already formed, and you might clip them off accidentally. So what should you trim? Snip off unhealthy or dead sections, and trim off dead flowers.
Also, check to see if branches are close to your house. If they are, trim them back as you don’t want them banging against the house during strong winds.
Garden
If you have strawberry plants, they should be covered with layers of straw to keep them protected from getting frostbitten. Plant those bulbs now before the ground gets too hard to dig. You will be well rewarded in the Spring.
You can pull out your summer vegetable garden, or you can leave it to overwinter and see what pops up in the spring.
Consider planting a few cold weather flowers to brighten up your garden.
Sprinklers
If you know you’re not going to turn on your sprinklers at all during the winter, then drain them of any water. You would turn off the water supply going to the sprinklers, and then open the drains including the backflow to get all of the water out. Leave the drains open for several hours to ensure it’s completely drained. You can remove the sprinkler heads to allow the water to drain more easily, and you can hook up an air compressor to blow air through the system. Make certain that you’ve set the controller to Off or Rain.
Make sure your hoses are drained completely, roll them up, and store them away in a shed or garage. Keeping them out of the elements will also prolong the life of the hose.
There are many informative and interesting books about managing your personal finances out there. These three are some of the best stand-outs to make a change in the way you view and handle your money.
1. The Intelligent Investor by Benjamin Graham
The author of this book is considered one of the best financial investors of the century, and his advice is still extremely relevant since its original publishing in 1949. His stock market strategies are highly well-respected, and this book will give you a deeper understanding of how to invest your money.
2. The Total Money Makeover by Dave Ramsey
This bestseller is a great overview to managing your finances. It covers getting out of debt, investing, saving for emergencies, college, paying off your mortgage, and much more.
This book explains what people not just in Beverly Hills or the Upper East Side are doing to make themselves financially successful. It goes over the seven common key traits that the authors have found that wealthier people possess, maybe even your next door neighbor, and shows you how to cultivate them for yourself.
Do you have any favorite personal finance books that belong on this list? Add them to the comments!
Best Eco-Friendly Lightbulbs
byADMIN on JUNE 5, 2012
For the best eco-friendly light bulb, consider how and where it will be used in your home.
Compact fluorescent bulbs (CFLs) and light-emitting diodes (LEDs) have improved dramatically and are getting even better. You can choose a light bulb that makes everything look as nature intended and still get energy savings.
The best LED bulbs can cost $10 to $70, but considering that they last for up to 25 years, they are a worthy investment.
When selecting a bulb, lighting expert Michael Hsu says considering how it will be used makes a big difference. His recommendations:
For Recessed lighting, Hsu uses the Sylvania Ultra Professional Series LED. It’s exceptionally good at highlighting colors when illuminating people, plants and furniture. It works well in track lighting ($33 to $70 at sylvania.com).
For a shaded floor lamp, the Phillips L Prize LED bulb sends light in all directions ($50 at usa.lighting.phillips.com). The GE Reveal CFL does the same and has very pleasing light (from $8 at gelighting.com).
For task lamps, which cast focused light, LED’s are a good match and don’t produce as much heat as incandescents. Quoted in The Wall Street Journal, Hsu likes the Sylvania Ultra Professional Series PAR20 ($33 at sylvania.com), because it renders beautiful colors.
For mood lighting, the GE Energy Efficient Reveal Clear halogen is about 30 percent more efficient than an incandescent, and the light quality is crisp and white. It creates a cozy pool of light ($5 at gelighting.com) and has a standard light bulb base.
The halogen, a form of incandescent, is the least efficient, but its light closely resembles that of a traditional bulb and creates ambience.
There are five economic reports scheduled for release this week that are relevant to mortgage pricing, but two of them are considered to be highly important to the financial and mortgage markets. In addition, there are several public speaking engagements by different regional Federal Reserve Presidents this week that may influence the markets.
However, I suspect that the economic reports and significant movement in stocks will be the biggest factors in whether mortgage rates move higher or lower this week.
March’s Personal Income & Outlays is the first of the economic releases, coming early tomorrow morning. It helps us measure consumers’ ability to spend and current spending habits, which is important to the mortgage market due to the influence that consumer spending-related data has on the financial markets. If a consumer’s income is rising, they are more likely to make additional purchases in the near future, fueling economic growth. This raises inflation concerns and has a negative impact on the bond market and mortgage rates. Current forecasts are calling for a 0.3% increase in the income reading and a 0.4% rise in spending. If we see smaller than expected readings, the bond market should open higher tomorrow morning, making an improvement to mortgage rates a good possibility.
The Institute for Supply Management (ISM) will post their manufacturing index for April late Tuesday morning. This is one of the first important economic reports released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. Analysts are expecting to see a reading of 53.0, which would be a slight decline from March’s level of sentiment. The lower the reading, the better the news for bonds and mortgage rates.
March’s Factory Orders data is Wednesday’s only relatively important data. It will be released at 10:00 AM ET, giving us a measure of manufacturing sector strength. It is similar to last week’s Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report, usually has more of an impact on the financial markets than the Factory Orders report does. Still, a noticeably larger decline than the 1.8% that is expected could push mortgage rates slightly lower. But, an unexpected increase in new orders could lead to slightly higher mortgage pricing Wednesday.
The Labor Department will release its 1st Quarter Productivity and Costs data early Thursday morning. This information helps us measure employee productivity in the workplace. High levels of productivity help allow low-inflationary economic growth. If employee productivity is rapidly rising, the bond market should react favorably. However, a larger decrease than what is forecasted could cause bond prices to drop and mortgage rates to rise Thursday morning. It is expected to show a 0.4% decline in productivity.
Friday brings us the release of the almighty monthly Employment report, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and potentially large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be an increase in the unemployment rate and a much smaller number of payrolls added to the economy during the month than was expected.
Just how much of an improvement or worsening in rates depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for the unemployment rate to remain at 8.2% and that approximately 162,000 jobs were added during the month.
Overall, I believe Friday will be the most important day of the week with the employment data being posted. It can easily erase the week’s accumulated gains or losses in mortgage rates if it shows any surprises. We may actually see a noticeable change in rates Tuesday also if the ISM index shows favorable or unfavorable results. The middle part of the week will likely be the calmest, but I still suggest proceeding cautiously if still floating an interest rate. This would be a good week to maintain contact with your mortgage professional if you have not locked a rate yet.
This Week’s Market Commentary
by ADMIN on APRIL 23, 2012
Monday’s bond market has opened in positive territory due to a weak opening in stocks. The major stock indexes are reacting negatively to renewed concerns about the European economy and debt issues.
This has the Dow down 131 points and the Nasdaq down 47 points. The bond market is currently up 13/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point from Friday’s early pricing.
There is nothing of relevance scheduled for release today, leaving bonds to be driven by stock movement. This is good news at the moment with the stock markets posting sizable losses as it helps make bonds more appealing to investors. If the major stock indexes extend this morning’s losses, we may see improvements to mortgage rates during afternoon hours today.
The rest of the week is extremely active with six relevant economic reports in addition to another FOMC meeting and two fairly important Treasury auctions. The economic reports range from low importance to extremely high importance with the majority of them falling between. Therefore, it is likely that we will see a fair amount of movement in mortgage pricing over the next several days.
The Conference Board will kick off the week’s events by posting April’s Consumer Confidence Index (CCI) late tomorrow morning. This index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and savings, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation and economic growth concerns to a minimum. But, a sizable increase could hurt the bond market, pushing mortgage rates higher tomorrow. It is expected to show a reading of 69.5, which would be a decline from March’s 70.2 reading. The lower the reading, the better the news for mortgage rates.
March’s New Home Sales will also be released late tomorrow morning. It gives us an indication of housing sector strength and mortgage credit demand, but is the week’s least important report. Unless it varies greatly from analysts’ forecasts, I am not expecting the data to cause much movement in mortgage rates. Analysts are currently forecasting an increase in sales of newly constructed homes.
Overall, look for plenty of movement in the financial markets and mortgage rates several days this week. Wednesday will likely be the most important day of the week with the FOMC meeting, press conference and fairly important Durable Goods data, but we may also see noticeable changes to rates Friday after the GDP is posted. If this week’s reports reveal weaker than expected economic conditions, the bond market could extend its rally and mortgage rates should fall for the week.
This week brings us the release of five economic reports that are relevant to mortgage rates, the first being the most important one. It will be posted early tomorrow morning when the Commerce Department releases March’s Retail Sales data. This piece of data gives us a measurement of consumer spending levels, which is very important because consumer spending makes up over two-thirds of the U.S. economy.
Forecasts are calling for a 0.3% increase in sales last month. If we see a larger increase in spending, the bond market will likely fall and mortgage rates will rise as it would indicate consumers are spending more than thought, fueling economic growth. However, a weaker than expected reading could push bond prices higher and mortgage rates lower tomorrow.
March’s Housing Starts is the next report, coming early Tuesday morning. It gives us a measurement of housing sector strength and mortgage credit demand by tracking starts of new home construction and the number of permits issued for future starts. This data usually doesn’t cause much movement in mortgage pricing unless it varies greatly from forecasts. It is expected to show a slight increase in construction starts of new homes. Good news for the bond market and mortgage rates would be a decline in home starts, indicating housing sector weakness.
March’s Industrial Production data will be posted at 9:15 AM ET Tuesday. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for an increase in production of 0.2%. This data is considered to be only moderately important to rates, so it will take more than just a slight variance to influence bond trading and mortgage pricing. Signs of manufacturing sector strength are considered negative news for mortgage rates.
Thursday has the remaining two reports scheduled, starting with March’s Existing Homes Sales numbers from the National Association of Realtors at 10:00 AM ET. This report also gives us an indication of housing sector strength and mortgage credit demand. It is considered to be moderately important to the markets, but can influence mortgage pricing if it shows a sizable variance from forecasts. Ideally, the bond market would like to see a drop in home resales because a soft housing sector makes a broader economic recovery difficult. Analysts are expecting to see an increase in sales between February and March. The larger the increase, the worse the news for bonds and mortgage rates.
The final report of the week will also be posted late Thursday morning when the Conference Board releases their Leading Economic Indicators (LEI) for March. This data attempts to measure economic activity over the next three to six months. This is considered to be a moderately important report, so we may see a slight movement in rates as a result of this data. It is expected to show an increase of 0.2%, meaning it is predicting slight growth in economic activity over the next several months. A decline would be considered good news for the bond market and could lead to slightly lower mortgage rates, assuming the housing report doesn’t show a significant surprise.
Overall, it will likely be a moderately active week for mortgage rates. However, unlike many weeks, the most important news comes during the early part of the week. Friday appears to be the best candidate for least active day, but Wednesday may also be fairly quiet. The stock markets will also influence bond trading and mortgage pricing this week as we get more corporate earnings releases. In other words, I expect to see only small changes to mortgage rates, but see them each day. At least once we get past tomorrow’s data.
Four Ways to Delay Paying Taxes
by ADMIN on APRIL 11, 2012
While the due date for taxes is April 17, if you are having trouble scraping up the money, there are ways to stall the taxman. According to a Yahoo article, you must file your tax return by the deadline in order to avoid penalties and interest. However, you can get an extension of up to six months from the IRS.
Four ways to stall payment:
1. Set up monthly installments
If you owe less that $25,000 in taxes, you can create a monthly payment plan. There are several ways to do this – you can fill out an Online Payment Agreement form, search “installment agreements” at IRS.gov or call 1-800-829-1040.
2. Pay by credit
The IRS accepts payment by credit card, which can be helpful if you don’t have the cash on hand and need more time. There are downsides to paying by credit card, however. You will be charged a transaction fee of 3% by the IRS, and if you can’t keep up with the monthly credit card payments, you will be charged interest.
3. Request an offer in compromise
If you are sure you cannot pay your taxes, you have the option to request an offer in compromise from the IRS. They may agree to settle your tax debt for less than the full amount.
4. Try a partial payment installment agreement
In this agreement, the debtor can pay monthly installments for a set period of time and once the collection period ends, the excess debt is forgiven. It is much more difficult to obtain than a offer in compromise, and for both, consult a tax attorney or professional in regards to your options.
Monday’s bond market has opened in positive territory following early stock weakness. As expected, the stock markets are showing sizable losses as they react for the first time to Friday’s Employment numbers. The Dow is currently down 153 points while the Nasdaq has lost 40 points. The bond market is currently up 7/32, which with Friday’s strength after pricing was issued, should improve this morning’s mortgage rates by approximately .250 of a discount point.
Worth noting is that this morning’s early selling has brought the Dow below 13,000 again. It is early in the day and a lot can happen between now and closing, but closing and staying below 13,000 should bode well for the bond market and mortgage rates. That was a threshold that was difficult to cross, so giving it up could signal further stock losses in the immediate future. This would create a flight-to-safety scenario that would likely bring funds from stocks into bonds.
There is no relevant economic news scheduled for today or tomorrow. The rest of the week brings us the release of five economic reports that are relevant to mortgage rates, in addition to a couple of Treasury auctions that have the potential to be influential on the bond market and mortgage pricing. Corporate earnings season also kicks off this week, which will be instrumental in stock market direction and possibly mortgage rate movement.
The first report of the week comes Wednesday afternoon when the Federal Reserve will post its Fed Beige Book report at 2:00 PM ET. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Federal Reserve region. Since the Fed relies heavily on the contents of this report during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any significant surprises. Unexpected signs of strong economic growth or rising inflation would be considered negative for bonds and mortgage rates. Slowing economic conditions with little sign of inflationary pressures would be considered favorable for bonds and mortgage pricing.
Overall, look for the most movement in rates the latter part of the week due to the Producer and Consumer Price Indexes being released and the two Treasury auctions that are scheduled, but this morning was a good start. There is also a high probability that the stock markets will also influence bond trading and mortgage rates due to earning releases that could disappoint the markets. I am expecting it to be an active week for the mortgage market, so please maintain contact with your mortgage professional if still floating an interest rate.
This Week’s Market Commentary
by admin on April 2, 2012
This week brings us the release of three monthly economic reports in addition to the minutes from the most recent FOMC meeting. While three reports is usually not much of a concern, two of the week’s three are considered to be highly important to the markets and mortgage rates. Thrown in the fact that this is a holiday-shortened trading week and we have the mix for a very interesting week.
The first report comes late tomorrow morning when the Institute for Supply Management (ISM) will release their manufacturing index. This index gives us an important measurement of manufacturer sentiment by surveying trade executives and is one of the more important of this week’s data. A reading above 50 means more surveyed executives felt business improved during the month than those who said it had worsened. This month’s report is expected to show a reading of 53.0, which would be a decline from February’s reading of 52.4. This means that analysts think business sentiment slipped from last month’s level. That would be fairly good news for the bond market and mortgage rates. A noticeable decline would be favorable for rates while an increase would be negative.
February’s Factory Orders will be released early Tuesday morning. This data is similar to last week’s Durable Goods Orders report, except it includes orders for both durable and non-durable goods, giving us a measurement of manufacturing sector strength. It is also the least important of this week’s reports. Unless it varies greatly from forecasts of a 1.4% increase, I suspect that it will be a non-factor in the mortgage market.
The next important event comes Tuesday afternoon when the Fed releases the minutes of their last FOMC meeting. Market participants will be looking at them closely. They give us insight to the Fed’s current thought process and individual Fed member opinions. Any surprises in the 2:00 PM ET release, particularly about inflation or the likelihood of a Fed move to boost economic activity, could cause afternoon volatility in the markets Tuesday and possible changes in mortgage pricing.
This Week’s Market Commentary
By admin on March 26, 2012
Monday’s bond market has opened in negative territory following early stock strength. The major stock indexes are starting the week off with gains of 112 points in the Dow and 26 points in the Nasdaq. The bond market is currently down 6/32, but we may still see a slight improvement in this morning’s mortgage pricing due mostly to strength late Friday.
There is no relevant economic data scheduled today, the only day of the week that there isn’t. Fed Chairman Bernanke had a speech early this morning, which did draw a little attention. However, his words weren’t new or surprising as they were a reminder of his current stance on the employment sector. He referenced the improving job market but reiterated that it still remains weak. That is more or less neutral for the bond market and mortgage rates.
The rest of the week has five economic reports scheduled reports that are considered relevant to mortgage rates in addition to two Treasury auctions that have the potential to swing bond trading enough to change mortgage rates. The first economic report come late tomorrow morning March’s Consumer Confidence Index (CCI) will be released. This index gives us an indication of consumers’ willingness to spend. Bond traders watch this data closely because consumer spending makes up over two-thirds of our economy.
If this report shows that confidence in their own financial situations is falling, it would indicate that consumers are less apt to make a large purchase in the near future. If it reveals that confidence looks to be growing, we may see bond traders sell as economic growth may rise, pushing mortgage rates higher tomorrow morning. It is expected to show a decline from February’s 70.8 reading to 70.1 for March. The lower the reading, the better the news for bonds and mortgage rates.
Overall, I expect to see the most movement in rates either tomorrow or Wednesday. Friday could also be a little active in terms of mortgage pricing. In general, it will probably be a pretty active week for rates. Accordingly, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate. We saw some nice improvements last week, but not enough buying to convince me that rates are more likely to move lower than remain the same or move higher in the next week or so. Therefore, I am still holding the cautious approach towards rates for immediate term closings.
This week brings us the release of three monthly economic reports in addition to the minutes from the most recent FOMC meeting. While three reports is usually not much of a concern, two of the week’s three are considered to be highly important to the markets and mortgage rates. Thrown in the fact that this is a holiday-shortened trading week and we have the mix for a very interesting week.
