Mortgage Rates and What May Move Them This week, December 20, 2010

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

Please find below the weekly economic calendar from Robert Rauf-

Catherine "Cathy" Chaudemanche Team
Edison Realtor Associate and Edison Resident
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Middlesex County NJ Market Center-

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Original content by Robert Rauf NMLS 248937


Well, Last week Fought HARD to try and be positive. Even with 3 VERY positive days, (especially Thursday and Friday) we still ended the week with Fannies down 7/32nds marking the 6th straight week of climbing rates and we are now beginning to flirt with the 5's for 30 yr rates. Even with the Fed saying: "economic growth insufficient to bring down unemployment" The market still managed a big sell off on Tuesday. But this is Good News!  Long term rates have always been a great indicator for future growth.  The long term Credit Markets are VERY forward looking and it is forecasting growth in the future... Growth means Jobs, Growth means happy Consumers, and Growth means inflation. Rates always go up when there is inflation.  Uncle Sam's "happy zone" is growth in the low 2% mark.  climb much over 2-2.2% and it becomes a worry that will raise rates. Keep in mind that the 20yr Average for a 30yr Rate is 7.2%, so 4's and 5's are still WONDERFUL!

This week should be an interesting one with all the holiday cheer and lack of work that will go on, but here is the Calendar:

  • MondayDecember 20: it is a no news day but another HAPPY day in the credit markets, up enough to wipe out last weeks losses, Could we see a positive week for rates as a Christmas present?
  • Tuesday December 21: Yet another blank day on the calendar, Look towards stocks for direction today. If you have noticed - as stocks have been climbing over the past several weeks, rates have been going up.
  • WednesdayDecember 22: Final estimate of GDP for the third quarter expected 2.8%. While this is an improvement over the previous "guesstimate" it is likely priced in already and is not a likely market mover.
  • Wednesday: November Existing Home sales expected +8.5%. this guess stems from October's uptick in signed contracts.  If we are surprised by a number higher than 8.5% it is possible we will see rates climb on the "good news".
  • ThursdayDecember 23: November personal income expected +0.2% Spending +0.5% and Consumption +0.1%. The PCE index (consumption) is the key in this report. As forecast it is likely to keep rates steady, and may even have rates improve slightly. But higher than forecast and it WILL bump rates up.
  • Thursday: November Durable goods expected-0.4%, EX Transportation +1.6%. This is not anticipated to be a market mover.
  • Thursday: Initial Jobless Claims expected unchanged at 420,000. If you have been reading my reports each week, you already know that above 400k is the Ugly mark that is supportive of steady rates.
  • Thursday: November New Home Sales expected +6.0%. With big concessions from builders it is anticipated that new home sales are up last month, but since they are giving things away, it is not a likely market mover.
  • Thursday: 2pm market close for the Christmas Holiday.
  • FridayDecember 24: Markets are closed for Christmas.  Merry Christmas, and Happy New year everyone. (and for the politically correct: Happy Holidays, or Happy Festivus!)

Thursday certainly seems to be the busy day, with both the potential biggie of the week, and the holiday shortened day/week.  (PCE Index is the one to watch the most for the week).  Over all this week is a tricky one to call. The week prior to Christmas is probably the Least productive work week all year, even on Wall Street.  Trading is likely to be thin, and Thin trading has a tendency to be volatile especially to the negative side. So it is a week to be cautious: Lock your loans in and enjoy some Egg Nog!

Merry Christmas and Happy New Year everyone!


Robert Rauf

Mortgage Banker

NMLS ID# 248937   or my blog:

(732)223-1630 x102

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

Real Estate Mortgage Network Inc.




 NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey, Toms River NJ 08753 Brick NJ 08723


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

Cathy, Thanks!  I hope you and your family have a Merry Christmas and a Happy New Year!

Dec 21, 2010 04:59 AM #1
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Catherine Chaudemanche - Edison & Central NJ

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