Mortgage Rates Steady, the Week Ahead
Posted 07-06-2010 at 08:20 AM by VictorBurek
I hope everyone had a wonderful holiday weekend, but it is now time to get back to work. All US markets were closed yesterday in honor of the 4th of July holiday. Banks did not issue rate sheets.
Today we received one economic report on the health of the services sector of our economy… ISM Non-Manufacturing Index. The Institute for Supply Management(ISM) surveys 400 firms including mining, construction, retail, etc… on the strength of business conditions. Readings above 50 indicate improving conditions while readings below 50 imply contraction or worsening conditions. Last month’s report came unchanged for the third consecutive month registering a print of 55.4 . The data released today indicated the non-manufacturing sector has taken a small step back with the index falling to a less than expected 53.8 in June.
Here is a look at what could impact mortgage rates in the week ahead.
Wednesday
- MBA Applications Index (low impact)
Thursday
- Weekly Jobless Claims (low to medium impact)
- Treasury Announcement for next’s auction of 3 year notes, 10 year notes and 30 year bonds.
Friday
- Wholesale Trade (low impact)
Not much in the way of economic data to move the markets this week. Typically on weeks such as this, the bond market will take its direction from equities. When stocks rally, the fixed income sector will be pressured lower in price which increases mortgage rates. If stocks continue the recent trend of moving lower, the bond market should be able to hold ground keeping mortgage rates near lifetime lows. It is going to take a major event, such as another debt crisis in Europe, for mortgage rates to move lower.
Reports from fellow mortgage professionals indicate mortgage rates to be holding in the 4.375% to 4.625% 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/discount/broker fee. If you are seeking a 15 year term, you should expect par in the 3.875% to 4.125% range with similar costs but lower FICO score requirements.
Consumer borrowing costs are slightly higher than the all time lows set last week, but rates continue to hold near the best levels ever. I see very little to gain by floating so I continue to favor locking all loans closing in the next 30 days. In my personal pipeline, I have even locked a few clients on 45 day locks to remove all risk.
Today we received one economic report on the health of the services sector of our economy… ISM Non-Manufacturing Index. The Institute for Supply Management(ISM) surveys 400 firms including mining, construction, retail, etc… on the strength of business conditions. Readings above 50 indicate improving conditions while readings below 50 imply contraction or worsening conditions. Last month’s report came unchanged for the third consecutive month registering a print of 55.4 . The data released today indicated the non-manufacturing sector has taken a small step back with the index falling to a less than expected 53.8 in June.
Here is a look at what could impact mortgage rates in the week ahead.
Wednesday
- MBA Applications Index (low impact)
Thursday
- Weekly Jobless Claims (low to medium impact)
- Treasury Announcement for next’s auction of 3 year notes, 10 year notes and 30 year bonds.
Friday
- Wholesale Trade (low impact)
Not much in the way of economic data to move the markets this week. Typically on weeks such as this, the bond market will take its direction from equities. When stocks rally, the fixed income sector will be pressured lower in price which increases mortgage rates. If stocks continue the recent trend of moving lower, the bond market should be able to hold ground keeping mortgage rates near lifetime lows. It is going to take a major event, such as another debt crisis in Europe, for mortgage rates to move lower.
Reports from fellow mortgage professionals indicate mortgage rates to be holding in the 4.375% to 4.625% 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/discount/broker fee. If you are seeking a 15 year term, you should expect par in the 3.875% to 4.125% range with similar costs but lower FICO score requirements.
Consumer borrowing costs are slightly higher than the all time lows set last week, but rates continue to hold near the best levels ever. I see very little to gain by floating so I continue to favor locking all loans closing in the next 30 days. In my personal pipeline, I have even locked a few clients on 45 day locks to remove all risk.
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