Mortgage Rates and What May Move Them This Week: July 26, 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

 

After 5 straight weeks of lower rates we finally had a week where we lost a little ground with Fannies losing 6/32nds by the end of the week. That isn't much at all and we are still locking in 30 year fixed rate mortgages in the mid 4% range for well qualified buyers. You also have to expect a little profit taking here and there since the price of a bond or mortgage has to go up for the yield to go down, so the bounces from day to day and week to week are not surprises at all.  Interest rates are a moving target and they change at least daily.

This week Has a laundry list of economic data along with some excess supply in the form of 3 Treasury auctions to look forward to. Here is this weeks calendar:

  • MondayJuly 26: June New home sales expected +6.6%. Well the actual number came in MUCH higher at 23.6%, but it is still down almost 17% from June 2009. After the report the market lost a little ground and has maintained itself in slightly positive territory.

  • Tuesday, July 27: July Consumer Confidence expected 51.0%. This is down from last month and is not anticipated to move higher until the jobs market improves. This is not a surprise and is not a likely market mover.

  • Tuesday: Auction #1 of the week with the Treasury selling $28 Billion in 2 year notes. Most of the short term auctions have been well bid, and there is no reason to think that this one will be any different. It is not likely to move Mortgage rates up or down.

  • Wednesday July 28: June Durable goods orders expected +1.0%. This is a pretty strong report and it may put a bit of pressure on rates today. Remember: Good news is bad news for interest rates and this may push rates up.

  • Wednesday: Auction #2 with the Treasury selling $37 Billion in 5 yr notes. Let's hope that this is a well bid auction, a poorly bid auction will likely push interest rates up on mortgages.

  • Thursday July 29: Happy Birthday to my Son, but the party will have to wait since he is at the National Jamboree for Boy Scouts for 10 days.

  • Thursday: Initial Jobless Claims expected down 4,000. Jobs are still VERY week, so it will take a real shocker of a number here to move rates in either direction.

  • Thursday: Last auction of the week with the Treasury selling $29 Billion in 7 yr notes. As with the 5yr auction, we want this auction to be well bid to keep rates steady. Previous auctions have even seen strong bidding on 30yr bonds, so let's hope that continues this week.

  • Friday July 30: First estimate of second quarter GDP expected +2.5%. This is off a bit from the previous month and is likely "priced in" the markets already. If the estimate comes in lower we may see mortgage rates drop lower on the news, but I would guess the actual number comes in darn close to the estimate.

  • Friday: Employment cost index for the second Quarter expected +0.5%. Employment costs have been week so a small increase is to be expected and it is not likely to move interest rates.

  • MondayAugust 2nd: July Institute of Supply mgt, Manufacturing index expected 55.0. This is down a teeny bit from last month but not a likely market mover.

There is not any true smoking gun for the week so the Biggie of the week would have to be a combination of the auctions and the Stock Market. Excess supply is always an issue and a poorly bid auction can put upward pressure on rates across the yield curve.  Stocks could rebound and pull money from the credit markets as well.  It would probably take at least a 200 point drop in the Dow to see a significant move lower in mortgage rates.  No one knows where the market is going to close, so the certainly would be guessing where things will be by the end of the week. That being said: It is MUCH safer to lock in at these historically low levels than to wait for the bottom. If there is a big move in interest rates it is going to be to the up side, not to the down side.

 

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

RRauf@REMN.com

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network Inc.

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

Thank you for the REBlog Cathy!

I hope you have a productive week.

Jul 27, 2010 06:03 AM #1
Rainmaker
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Catherine Chaudemanche - Edison & Central NJ
Metuchen Keller Williams Elite Realty / Middlesex County, NJ - Edison, NJ
Full Time, Informed and Involved- Results Driven

Always...:) Have a great week Rob-

Jul 27, 2010 09:57 AM #2
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Catherine Chaudemanche - Edison & Central NJ

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