Mortgage Rates and What May Move Them This Week: April 19,2010

Reblogger Catherine Chaudemanche - Edison & Central NJ
Real Estate Agent with Metuchen Keller Williams Elite Realty / Middlesex County, NJ

Original content by Robert Rauf NMLS 248937

 

 Last week ended up with a bang, and for the most part 4 of the 5 days were mortgage friendly days.  By the end of the week we saw Fannies trading up 26/32nds which is a significant improvement in a weeks time and will translate into improving rates. Who do we have to thank?  You can Thank Goldman Sachs for last weeks credit market rally.  The SEC Suit against Goldman started a bit of a sell off in stocks triggering a flight to quality into the Credit Markets, driving prices up and yields down.

This week has some data to chew on, but I think we may have more movement this week based on stocks

Here is this weeks economic calendar

  • Monday April 19: March LEI; depending on which forecast you look at this was anticipated to be anywhere from +0.6% to 1.0%  in reality it came out +1.4%, a very strong number which has been rising at a steady pace for about a year now. This number looks forward 6 months and as reported is helping stocks and hurting Mortgage Rates.
  • Tuesday April 20: No news day, so keep an eye on stocks
  • Wednesday April 21: Another no news day...
  • ThursdayApril 22: March PPI expected +0.5% with a core of +0.1%. As reported this number shows no signs of inflation at the core level, and should be supportive of steady interest rates
  • Thursday: Initial Jobless claims are anticipated down 20,000. While this is good news it still puts the number at 455,000 on the week/week basis and that is still bad enough to keep rates low.
  • Thursday: March existing Home sales anticipate +5.3%. With the First time buyer tax credit about to expire this number is not likely to be looked at until we see sustainable growth w/o any credits.
  • Friday April 23: march Durable Goods Orders expected +0.2% ex Auto +0.5%. This will only move the market if the prognosticators got the number wrong, a significant improvement above the forecast could send rates up.
  • Friday: March New Home Sales expected +3.9%. The MBA has been reporting flattening applications for purchase mortgages, so this improvement is not likely to move rates today.

On the surface I would think that the March PPI would be the biggie number of the week, but the way the market has been reacting lately I would have to say that this weeks reports will stay on the sidelines and watch the stock market along with investors.  As we saw on Friday, there is some insecurity in the Equities Markets that actually helped improve interest rates. Today the equities are taking a bit of that back and we have rates going the other way.  I expect to see more of this happen all week. If we see stocks close above about 11,200 (for the DOW) I would think that we will see quite the sell off in the credit markets, pushing interest rates up, but if we don't see a close above the previous highs in stocks, it is probably a recipe for improving to steady interest rates.  I would have to guess that this will be the motivating factor in the markets for the remainder of April.

There is enough uncertainty in the markets right now that I do not anticipate any new high for stocks, so we will probably have a bumpy week that ends up with rates pretty much unchanged and possibly slighlty improved by Friday's close.... But that is just my opinion, and my crystal ball is in the shop for repairs!

That's this weeks two cents, Have a great week

Rob

Robert Rauf

Mortgage Banker

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!

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Rainmaker
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Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

This guy is brilliant!  (thanks for the compliment of the Re-Blog Cathy!)

Rob

Apr 19, 2010 08:56 AM #1
Rainer
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Constantine Isslamow
Century 21 United Realty Inc. - Peterborough, ON
"Training and Accountability"

Thank you for posting and sharing your very informative article.

Wishing you continued success.

Apr 19, 2010 09:36 AM #2
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Catherine Chaudemanche - Edison & Central NJ

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