What will influence Mortgage Rates this week?
Well Last week was a mixed bag off confused numbers. Most numbers were stronger than expected and some were weaker. Over all there was only one Good day for mortgages last week, that was Thursday, But unfortunately Friday wiped out every bit of Thursday's gain... net Net we lost 10/32nds last week, our first negative week we have seen in over a month, so I guess we were due for a little profit taking!
This week is starting off on a positive note, but it is a long bumpy road till we hit Friday at 5pm EST!
On this weeks calendar:
- Monday September 21: August LEI, expected +0.7%. Leading economic indicators is a favorite of the Fed and is a very forward looking number. At 10am the report came in slightly weaker than expected at +0.6%... Some good news for rates and Fannies are up about 6/32nds as I type so we may see some rate improvement today.
- Tuesday September 22: First day of the Fed Meeting. No news here until Wednesday.
- Tuesday: First auction of the week with $43 Billion in 2 year notes. It is anticipated that the current yield on this short term security will be well bid by domestic and foreign investors, so it should not help or hurt mortgage rates
- Wednesday September 23: Auction #2 with $40 Billion in 5 year Notes. Last months 5 year auction was well bid and I hope to see the same on Wednesday. If it is not well bid it could be bad news, so keep your fingers crossed here.
- Wednesday: Fed meeting concludes at 2:15 and they make their post meeting statement. Get out your dissection tools... Investors will take apart every word of the post meeting statement looking for info. Any hint that the Fed is looking to remove economic stimulus will be bad news. Consensus is that this will most likely not be a market mover unless Bernake decides to throw us a curve ball.
- Thursday September 24: Initial jobless claims expected up 5,000. Everyone knows that the jobs report will continue to be weak in the near term, so it is not likely to raise any eyebrows.
- Thursday: Existing home sales for August expected up 2.1%. The 'UP' is likely due to distressed sales, but either way a big number like this is not conducive to lower rates.. Remember: good news is bad news for interest rates.
- Thursday: Auction #3 for the week with $29 Billion in 7 year notes. A well bid auction here is most certainly supportive of lower mortgage rates. The yield is probably high enough to be well bid, but we will not know for sure until Thursday afternoon.
- Friday September 25: August Durable goods orders expected +0.5% ex auto +1.0%. As forecast it is supportive of a stable mortgage market.
- Friday: August New Home Sales expected up 1.6%. This would make 5 months of increased new home sales. If this number stays below 2% it will be a non event for mortgages, above 2% we may see a sell off leading to higher rates.
Well it is a week of "maybes" and "Wait and sees". The biggie of the week is likely to be the post meeting statement on Wednesday afternoon. Providing the auctions go "OK" the only underlying factor that may move rates will be stocks, as we saw on Friday last week. In the absence of data if stocks are doing well you can anticipate that the credit markets are doing poorly and rates will tick up. The reverse is true as well.
Have a great week!
Rob
Mortgage Banker
www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf
(732)223-1630 x102
Since 1987 I have been helping my clients fulfill their dream of home ownership!
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