Mortgage Rate Lock Advisory for New York and Florida Mortgage Rates for Wednesday, August 15, 2012

Mortgage and Lending with Bob Amato of Empire Home Mortgage Inc

If you are looking for a Mortgage Professional who will give you the type of service that you deserve, contact Bob Amato (NMLS # 8632) and Empire Home Mortgage Inc. (NMLS # 44882). We answer our phones seven days a week until 9PM. Put us to the test! Our toll free number is (866) 742-5227.

 Visit our website, . There you can get answers to all of your financing questions, view rates and search for foreclosed properties.

 If you are considering locking in an interest rate for a New York mortgage or a Florida mortgage, read this post.

 There were two pieces of economic data released this morning. One is traditionally much more important to the markets than the other. That would be July’s Consumer Price Index (CPI), which was posted at 8:30 AM ET this morning. The Labor Department announced that the overall reading was unchanged from June’s level and that the core data that excludes more volatile and energy costs rose only 0.1%. Both readings were below forecasts, indicating inflationary pressures were weaker than thought at the consumer level of the economy. This should have been very good news for the bond market and mortgage rates, but unfortunately, despite this news we are seeing bonds in selling mode during early trading.

 July's Industrial Production was the second report of the day, coming at 9:15 AM ET. It revealed a 0.6% increase in output at U.S. factories, mines and utilities. This pegged forecasts, meaning that even though the report points towards manufacturing sector growth, it didn’t really surprise many analysts. That makes the data neutral for bond trading and mortgage pricing.

 Tomorrow also has two pieces of economic data scheduled for release that may influence mortgage rates, but neither are as important as today’s CPI report was. The first is the weekly unemployment update from the Labor Department at 8:30 AM ET. They are expected to announce that 368,000 new claims for unemployment benefits were filed last week, up 7,000 from the previous week. Ideally, the bond market would like to see a large increase in new claims, indicating employment sector weakness. The larger the number of new claims, the better the new for mortgage rates. However, since the report tracks only a single week’s worth of new claims, it usually takes a large variance from forecasts for the data to noticeably impact mortgage pricing.

 July's Housing Starts will also be posted early tomorrow. This report gives us an indication of housing sector strength and future mortgage credit demand. However, it isn't considered to be of high importance to the bond market or mortgage pricing and usually doesn't cause much movement in mortgage rates unless it shows a large drop or rise in new starts. It is the least important of the week's reports and is expected to show a slight increase in construction starts of new homes. The lower the number of starts, the better the news for the bond market, as it would indicate a weaker than expected housing sector.

 The selling we have seen in bonds the past couple days is a little concerning, especially when we have had economic reports both support and contradict such a move. I believe this is only temporary and we could see some correcting moves in the immediate future. However, there is still plenty of room between the current 10-year Treasury yield of 1.79% and 2.00%. If we don’t see the bond market recover some of this week’s losses, preferably to below 1.74%, we could see several more days of this upward trend that is causing mortgage rates to move higher. Keep in mind that mortgage rates tend to follow bond yields, which move in opposite direction of bond prices. Therefore, proceed cautiously if still floating an interest rate.

 If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... 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.

 Empire Home Mortgage Inc is a registered Mortgage Broker with the New York and Florida State Banking Departments and our loans are arranged through third party providers.


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