It finally happened. After 9 straight weeks of improving interest rates we finally had a week where rates went up a bit. By the closing bell on Friday we saw Fannies lose 7/32nds for the week. That is enough to be noticeable on a rate sheet, but over all we are still in great shape with rates. The bump up in rates would have been much worse if it were not for the problems in Greece, Mid week we had a big mortgage rally as there was rioting in Greece and an market that went running for safety and starting buying into US credit markets. The reality is that the economic data released last week did show more inflation than anticipated, so things could have been worse.
This week is a busy one with a Fed meeting, and more than enough data to chew on, here is the calendar:
- MondayJune 20; a no news day with the markets trading on either side of unchanged all day, With stocks up this afternoon we see Fannies beginning to lose a little ground so rates may bump up a touch this afternoon.
- TuesdayJune 21: Federal Open Market Committee Meeting begins.
- Tuesday: May Existing home sales expected down 4.9%. Pending home sales have been down for a few months, so it is a good bet that existing sales will be down. This is not a likely market mover for interest rates.
- WednesdayJune 22: FOMC issues their post meeting words of wisdom at 12:30pm. It is doubtful that there will be any surprises here, No change to Fed Rates, No new stimulus, and probably no news to move the Credit Markets.
- Wednesday: Fed Chairman Bernake Opens the doors up again with a press conference at 2:15. Bernake is Mr Transparent, he wants to be sure the markets understand their position and there is not too much reading between the lines. This is also likely to be a non event for the market.
- Thursday June 23: Initial Jobless Claims expected unchanged, putting the weekly number at 414k. As long as this weekly number stays above the 400k mark, it will be supportive of steady interest rates.
- Thursday: May New Home sales expected down 3%. April was a surprise up that was ignored by the markets as they dug into the reasons "why".. .(mostly beating the clock on guideline changes)... This one should not have any surprises and is not likely to move the market.
- Friday, June 24: Final estimate of first quarter GDP expected +1.9%. The Second Quarter is almost over, so this is hardly a market mover.
- Friday: May Durable Goods Orders expected +1.5% excluding autos +0.9%. If we see the actual number come in a bit higher here will will probably see a sell off that will bring rates a bit higher.
- MondayJune 17: May Personal Income expected +0.3% Spending +0.1% and PCE +0.3%. Consumption is the key here (PCE), if that number comes in higher than forecast it will move rates higher.
The smoking gun this week is not on the calendar. Keep your ear to the ground and on the news for reports from Europe. Greece is on the front burner and will stay there until it falls apart or is bailed out. The fear here is if Greece defaults it will be as bad as Lehman Brothers failing in 2008 which is seen as the beginning of the global crisis we have been living. I expect the EU will do everything in their power to keep this from happening. If they are successful in fixing the problems in Greece it will likely be a good news scenario that will cause a Credit market sell off, Equities Rally and Rates jumping higher. If by chance there is no cure for Greece, expect to see money continue to flow in a flight to quality - helping to keep rates low and perhaps bringing them down a little more. I think this is one case that we would all rather see rates go up than down.
Interest rates are with in whisper distance of the lows we saw last fall, keep in mind that the 2010 lows were 40++ year lows for mortgage rates. This is still a great time to buy with housing being at the most affordable levels we have seen in decades... Providing you plan on keeping the home for the long run, I am pretty sure you will be happy a few years from now if you purchased during this time period!
Have a great week
Mortgage Loan Originator
NMLS ID# 248937
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!
Real Estate Mortgage Network Inc.
NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey, Toms River NJ 08753, Toms River NJ 08755, Brick NJ 08723, Brick NJ 08724 Mortgages in Ocean County NJ, Mortgages in Monmouth County NJ, Jackson NJ 08527, Howell NJ 07731
Comments(3)