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Mortgage Market In Review - 2/28/2010

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Mortgage and Lending with Mortgages By Mick

MARKET COMMENT

Mortgage bond prices rebounded last week pushing mortgage interest rates lower. The majority of the data came in bond friendly. Weaker than expected consumer confidence data Tuesday helped mortgage interest rates improve. The Treasury auctions showed decent foreign demand. The gross domestic product price deflator component showed a smaller price increase than expected while the consumer spending component also came in weaker than expected. Existing home sales fell a surprising 7.1%, considerably weaker than the expected 1% increase. Rates fell about 3/4 of a discount point for the week.

The employment report Friday morning will take center stage this week. Until then, look for the PCE inflation data to set the tone for the beginning of the week and the ADP employment report to set the tone for the mid portion of the week.

LOOKING AHEAD
Economic
Indicator
Release
Date and Time
Consensus
Estimate
Analysis
Personal Income and Outlays Monday,
March 1,
8:30 am
, et
Income up 0.4%,
Outlays up 0.4%
Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates.
PCE Price Index Monday,
March 1,
8:30 am, et
Up 0.1% Important. An indication of inflationary pressures. Decreases may lead to lower rates.
Construction Spending Monday,
March 1,
10:00 am
, et
Down 0.6% Low importance. An indication of economic strength. A significant decrease may lead to lower rates.
ISM Index Monday,
March 1,
10:00 am, et
58.0 Important. A measure of manufacturer sentiment. A large decline may lead to lower mortgage rates.
ADP Employment Wednesday,
March 3,
8:30 am
, et
-15k Important. An indication of employment. Weakness may bring lower rates.
Fed “Beige Book” Wednesday,
March 3,
2:00 pm
, et
None Important. This Fed report details currenteconomic conditions across the US. Signs of weakness may lead to lower rates.
Revised Q4 Productivity Thursday,
March 4,
8:30 am
, et
Up 6.2% Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
Factory Orders Thursday,
March 4,
10:00 am
, et
Up 1.2% Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Employment Friday,
March 5,
8:30 am
, et
Unemp. @ 9.8%,
Payrolls -25k
Very important. An increase in unemployment or a large decrease in payrolls may bring lower rates.
Consumer Credit Friday,
March 5,
3:00 pm
, et
Down $4.1 billion Low importance. A significantly large increase may lead to lower mortgage interest rates.
FUNDAMENTAL WEEK

The abundance of fundamental data this week provides a good opportunity for mortgages to improve. If the data shows weakness in the economy with little or no inflationary pressures then it is possible for mortgage bonds to rally resulting in mortgage interest rate decreases. However, if the data shows that the economy is rebounding or any significant signs of inflation, mortgage bonds may fall pushing mortgage interest rates higher.

Mortgage interest rates remain favorable. Now is a great time to avoid the uncertainty surrounding continued market volatility.

Posted by

Mick Rothblott

Mortgage & Construction Loan Planner

 

(224)365-4511 -  phone

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