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Market Update - Lock or Float (October 12)

By
Mortgage and Lending with Approved Mortgage Group NMLS #1287673

The bond market opened in the negative after mixed economic news this morning. Stock rose slightly with the Dow up 52 and Nasdaq up 26 points. The bond is currently down 6/32, but because of yesterday's showing of strength, there will most likely be a minor improvement in mortgage rates today of approximately 1/8 of a point.

September's Retail Sales data was the first report to enter today's market. It revealed an increase in sales of 0.6% from last the previous month's (August's) levels. This turned out to be good news because it was significantly higher than the 0.2% increase that was anticipated.  Also, it shows that consumers hadn't lost confidence like a lot of nay-sayers expected. So, on a slightly negative tone, this could be considered bad news for mortgage rates and bonds; typically, the stronger level of consumer spending symbiotically raises economic activity and inflationary concerns.

The second report, September's Producer Price Index (PPI), showed a 200%+ increase in the overall index of 1.1%.  However, the good news came with it's bad counterpart.  Overall, the entirity of the report showed good news for bonds and mortgage rates because inflationary factors at the producer level of the economy were lower than expected if food and energy prices are excluded.  This counteracts the findings and confidence level for investors with the release of the first report.

The last report released this week was October's University of Michigan Index of Consumer Sentiment. The report shed a little lite on consumer confidence.  It revealed a reading of 82.0, falling short of the 84.0 that was predicted. This was the least important of the three reports and had little impact on bond trading or mortgage rates this morning, though it shows a consistent trend from the Retail Sales data from September.

The week of October 15th is the release of the Consumer Price Index (CPI) among other economic reports.  The first relevant economic news is scheduled to be released on Tuesday morning with the publication of September's Industrial Production data.

Here are the lock and float predictions if your loans are scheduled to close:

  •  Within 7 days: Lock
  • After the 7 day mark: Float

*This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

*Information can be found on my website: www.family-home-loans.net

*Information supplied by and with permission from a la mode, inc

Posted by

Andy Scherer

Loan Officer & Marketing Director

Approved Mortgage Group

610 Farm Lane, Doylestown, PA 18901

Mobile: 203-257-5279

Email: andy@approvedmortgagegroup.com

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