What Will Move Mortgage Rates in the Week Ahead?
Posted 06-14-2010 at 09:08 AM by VictorBurek
Mortgage rates ended the week on a positive note. Following Thursday's sell off which forced lenders to reprce worse multiple times, Friday we got rebound. After the release of a very disappointing Retail Sales Report, mortgage backed securities rallied to recapture most of the prior day's losses. Then we got Consumer Sentiment which indicated the US consumer was more optimistic than thought which led to stocks rallying which usually pulls money away from MBS. That didn't happen as MBS managed to hold onto and extend gains through close. Some lenders who issued early morning rate sheets did reprice better improving consumer borrowing costs; however, most lenders left rate sheets unchanged.
We have no economic data hitting the newswires this morning, but here is a look at the busy week ahead:
Tuesday
- Empire State Manufacturing Survey (medium impact) Measures the strength of the manufacturing sector in the New York region.
- Import and Export Prices(low to medium impact)
Wednesday
- Weekly Mortgage Applications Index (low impact)
- Housing Starts (medium to high impact) Estimates how much new residential real estate construction occurred in the previous month.
- Producer Price Index (medium impact) PPI measures inflation at the producer level.
- Industrial Production (high impact) Measure of the strength of the manufacturing sector by measuring the output at U.S. factories, utilities and mines. Higher industrial production would be a positive economic indicator which would benefit the stock market at the expense of the fixed income sector.
Thursday
- Consumer Price Index (medium to high impact) CPI measures inflation on the consumer level.
- Jobless Claims (medium impact)
- Leading Indicators (low impact)
- Philadelphia Fed Survey (medium impact) Measures the strength of manufacturing in the Philadelphia region.
- Treasury Announcement for next week's auction of 2 year, 5 year and 7 year Treasury notes. (medium impact)
Friday
- No Data
Reports from fellow mortgage professionals indicate the par 30 year conventional rate mortgage remains in the 4.50% to 4.75% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740, a loan to value of 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. If you plan to remain in your current home for less than 3 years, you should consider a no cost refinance. A no cost refinance is when the loan originator pays your closing costs for you by placing you in a higher interest rate loan. The current rate for a no cost loan is around 5.25%.
If you have been floating for the past week, you have had a bumpy ride... but what have you gained? Rates continue to hold at the best levels and lenders are reluctant to lower them further. If you are within 30 days of closing, lock now and secure a great rate. Like last week, the only loans I would consider floating are ones a day away from a shorter lock term which offers better pricing or those loans closing in more than 30 days.
We have no economic data hitting the newswires this morning, but here is a look at the busy week ahead:
Tuesday
- Empire State Manufacturing Survey (medium impact) Measures the strength of the manufacturing sector in the New York region.
- Import and Export Prices(low to medium impact)
Wednesday
- Weekly Mortgage Applications Index (low impact)
- Housing Starts (medium to high impact) Estimates how much new residential real estate construction occurred in the previous month.
- Producer Price Index (medium impact) PPI measures inflation at the producer level.
- Industrial Production (high impact) Measure of the strength of the manufacturing sector by measuring the output at U.S. factories, utilities and mines. Higher industrial production would be a positive economic indicator which would benefit the stock market at the expense of the fixed income sector.
Thursday
- Consumer Price Index (medium to high impact) CPI measures inflation on the consumer level.
- Jobless Claims (medium impact)
- Leading Indicators (low impact)
- Philadelphia Fed Survey (medium impact) Measures the strength of manufacturing in the Philadelphia region.
- Treasury Announcement for next week's auction of 2 year, 5 year and 7 year Treasury notes. (medium impact)
Friday
- No Data
Reports from fellow mortgage professionals indicate the par 30 year conventional rate mortgage remains in the 4.50% to 4.75% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740, a loan to value of 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. If you plan to remain in your current home for less than 3 years, you should consider a no cost refinance. A no cost refinance is when the loan originator pays your closing costs for you by placing you in a higher interest rate loan. The current rate for a no cost loan is around 5.25%.
If you have been floating for the past week, you have had a bumpy ride... but what have you gained? Rates continue to hold at the best levels and lenders are reluctant to lower them further. If you are within 30 days of closing, lock now and secure a great rate. Like last week, the only loans I would consider floating are ones a day away from a shorter lock term which offers better pricing or those loans closing in more than 30 days.
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