Mortgage Rate Indicators for Denver

Mortgage Rate Indicators for Denver

Interest rates can be extremely volatile based on the news from various sectors of the economy, such as unemployment, inflation, etc. So, when trying to decide whether or not to lock a loan, it's important to watch mortgage rate indicators which MIGHT give some direction. Notice I said "direction" not "guarantee", because there really is no one that knows for sure what the interest rates are going to do. If they did, they would own islands somewhere warm and be retired!

If you are interested in applying on line for a loan, go to www.MyLenderOfChoice.com.

Or call me at 720-489-0712.

Market Comment - Week of January 25th, 2010 Mortgage bond prices rose last week pushing mortgage interest rates lower. The bond market rallied following crumbling stocks as the DOW fell 213 points Thursday. Weekly jobless claims came in higher than expected causing unemployment fears to cast a shadow over the state of the economy. In a consumer based economy it is difficult for people to spend money without a job. The producer price index was mixed as the headline figure was higher than expected but the core was lower than expected. For the week interest rates fell by about 1/4 of a discount point. The Fed meeting Wednesday will be the most important event this week. The Treasury will continue the record auctions with 2-year notes on Tuesday, 5-year notes on Wednesday, and 7-year notes on Thursday. If foreign demand remains decent rates should hold near current levels. However, a drop in foreign demand will likely cause rates to head higher. Economic Factors Economic Indicator Release Date Time Consensus Estimate Analysis Existing Home Sales Monday, Jan. 25, 2010 Down 8.3% Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates. Consumer Confidence Tuesday, Jan. 26, 2010 52.9 Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates. New Home Sales Wednesday, Jan. 27, 2010 Up 1.9% Important. An indication of economic strength and credit demand. A decrease may lead to lower rates. Fed Meeting Adjourns Wednesday, Jan. 27, 2010 No rate adjustment Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. Durable Goods Orders Thursday, Jan. 28, 2010 Up 2.0% Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates. Q4 Advance GDP Friday, Jan. 29, 2010 Up 4.5% Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. Q4 Employment Cost Index Friday, Jan. 29, 2010 Up 0.4% Very important. A measure of wage inflation. Weakness may lead to lower rates. U of Michigan Consumer Sentiment Friday, Jan. 29, 2010 73.0 Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates. Fed Focus The United States central bank, the Federal Reserve, coordinates the borrowing and lending activities of federally chartered banks. The principal reason the Federal Reserve was created was to reduce severe financial crises. One way of accomplishing this goal is to control the amount of money that flows through the economy. By manipulating the US money supply, the Fed influences inflation, unemployment, and the level of US economic activity. The Fed has a variety of tools that it uses to control the money supply, but its chief policy tool is the manipulation of short-term interest rates. All eyes will be focused on the Federal Open Market Committee meeting Wednesday. No rate changes are expected. However, many analysts and traders believe rate hikes are on the horizon. Futures contracts show traders are pricing in a 77% chance the Fed will raise rates by November. Others argue those positions will be wrong because the economy isn't strong enough for the Fed to change rates. A cautious approach to float/lock decisions is prudent heading into the Fed meeting this week. Be prepared for potential market volatility.

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Ruth Vogt Business Development Manager (LMB100023827) 6025 South Quebec, Suite 110 Englewood, CO 80111  Work: 720-489-0712 Fax: 720-489-0273 Other: http://www.dora.state.co.us/real-estate/index.htm  rvogt@wrstarkey.com  www.MyLenderOfChoice.com

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Views and opinions expressed on this site are not necessarily those of WR Starkey Mortgage.

  

 Ruth Vogt, Branch Manager

   Colorado LMB #LMB100023827

   www.MyLenderOfChoice.com

   rvogt@wrstarkey.com