Housing Data Dominates in the Week Ahead
Posted 09-20-2010 at 08:50 AM by VictorBurek
Mortgage rates ended last week on another 3 day losing streak. Some lenders did reprice for the worse as the bond market remained under pressure the entire day. Mortgage backed securities found stable ground at the bottom of the recent range we have used to make lock/float decisions. Our range will be tested today.
We have no economic data on the calendar for today.
The data picks up tomorrow with a look into the shaky housing market with the release of the Housing Starts and Building Permits for August. This will be followed later in the day with the FOMC announcement following their monetary policy meeting. It is almost certain that there will be no change to the current Fed Fund rate of 0 to .25% but market participants will scour the statement for any hint of future monetary policy and the Fed’s outlook on economic growth. Additionally, they will look for any mention of new quantitative easing measures. Mortgage rates will benefit with a more bearish outlook from the Fed while they will come under pressure if the Fed portrays a heating up economy.
Thursday will be the busiest day of the week with three data releases and a announcement from the Department of Treasury regarding a new supply of government debt to hit the streets next week. The first report to hit will be weekly jobless claims, followed by another look into housing with Existing Homes Sales and concludes with Leading Indicators. Friday we get arguably the most important release of the week, Durable Goods Orders, and our final look into housing for the week with New Home Sales.
Reports indicate lender rate sheets to be slightly worse than those we saw Friday morning. The par 30 year conventional rate mortgage remains in the 4.25% to 4.50% range for well qualified consumers. To secure a par interest rate on a conventional mortgage you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination. If you have a lower FICO score or a higher loan to value, you should consider an FHA loan which offers similar rates, allows for lower FICO scores but with higher costs.
So far the range is holding despite stocks rallying again. Following the strategy of lock the price highs float the price lows, floating might pay off but the ride may be bumpy. Floating day to day and I will alert if the bond market deteriorates further.
We have no economic data on the calendar for today.
The data picks up tomorrow with a look into the shaky housing market with the release of the Housing Starts and Building Permits for August. This will be followed later in the day with the FOMC announcement following their monetary policy meeting. It is almost certain that there will be no change to the current Fed Fund rate of 0 to .25% but market participants will scour the statement for any hint of future monetary policy and the Fed’s outlook on economic growth. Additionally, they will look for any mention of new quantitative easing measures. Mortgage rates will benefit with a more bearish outlook from the Fed while they will come under pressure if the Fed portrays a heating up economy.
Thursday will be the busiest day of the week with three data releases and a announcement from the Department of Treasury regarding a new supply of government debt to hit the streets next week. The first report to hit will be weekly jobless claims, followed by another look into housing with Existing Homes Sales and concludes with Leading Indicators. Friday we get arguably the most important release of the week, Durable Goods Orders, and our final look into housing for the week with New Home Sales.
Reports indicate lender rate sheets to be slightly worse than those we saw Friday morning. The par 30 year conventional rate mortgage remains in the 4.25% to 4.50% range for well qualified consumers. To secure a par interest rate on a conventional mortgage you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination. If you have a lower FICO score or a higher loan to value, you should consider an FHA loan which offers similar rates, allows for lower FICO scores but with higher costs.
So far the range is holding despite stocks rallying again. Following the strategy of lock the price highs float the price lows, floating might pay off but the ride may be bumpy. Floating day to day and I will alert if the bond market deteriorates further.
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Comments
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MBS moving higher... most lenders have repriced better. Floor of support is holding.Posted 09-20-2010 at 01:18 PM by VictorBurek
