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Market Comment
Mortgage bond prices finished the week lower, which pushed mortgage interest rates higher. Rates were positive the beginning of the week tied to stock weakness. Those improvements were erased in response to stronger than expected Automatic Data Processing (ADP) employment and Gross Domestic Product (GDP) data mid-week. The negative trend continued Thursday. The Employment Cost Index (ECI) rose 0.7% versus the expected 0.5% increase. The heavyweight employment report released Friday was weaker than expected limiting the losses. Mortgage interest rates rose by about 1/4 of a discount point for the trading week.
LOOKING AHEAD
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Economic
Indicator
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Release
Date & Time
|
Consensus
Estimate
|
Analysis
|
| Factory Orders |
Tuesday, Aug. 5,
10:00 am, et
|
Up 0.3% |
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Trade Data |
Wednesday, Aug. 6,
8:30 am, et
|
$43.8b deficit |
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| Weekly Jobless Claims |
Thursday, Aug. 7,
8:30 am, et
|
298k |
Important. An indication of employment. Higher claims may result in lower rates. |
| Preliminary Q2 Productivity |
Friday, Aug. 8,
8:30 am, et
|
Up 0.1% |
Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
Mortgage Professionals
Obtaining a mortgage is often a confusing task that can also lead to frustration. The reason for the confusion is due to the fact that mortgage financing is complex. The good news is that this complexity provides consumers with options and choices best suited to fit their needs.
Everyone’s financial position is unique. Some people have large cash reserves that can be used for down payments while others want to get into a home with little or no money down. Credit ratings vary from person to person. In addition, future plans vary. Some people plan on staying in their home for the rest of their lives while others only plan on staying for a few years.
These facts alone make comparing your mortgage to your neighbor’s based on rate alone a flawed endeavor, yet many people attempt to do so. Admittedly, everyone wants a good deal. Keep in mind that comparing rates is just one component of the entire mortgage. Other variables include the term, down payment requirements, income qualifications, credit ratings, reserve requirements, current debt, prepaid points, and many more.
A mortgage professional is able to take all of these variables that are unique to each individual and help a person obtain the mortgage loan that works best for their situation. The service they provide is time consuming and complex. However, the rewards of dealing with a professional carry forward throughout a borrower’s life. Making wise financial decisions today helps to pave the way for a safe and secure future.
Mortgage interest rates currently remain historically favorable. There is much uncertainty about the future of the economy. If the economy recovers and inflation emerges mortgage interest rates may head higher. Taking advantage of mortgage interest rates at these levels is a sure thing. A cautious approach to lock decisions is necessary to protect against the possibility of a future increase in mortgage interest rates.
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