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If you are considering locking in an interest rate for a New York mortgage or a Florida mortgage, read this post.
This holiday shortened week brings us a couple of economic reports to drive the markets and mortgage rates, but one of them is highly important. It is a shortened week with the markets closed Monday. With a couple days that have little data or reports scheduled that are not considered important, it us quite likely that the stock markets will have the biggest influence on the bond market and mortgage pricing more than one day this week.
The Commerce Department will post May's Factory Orders data late Tuesday morning, which is similar to the Durable Goods Orders report that was released last week. The biggest difference is that this week's report covers both durable and non durable goods. It usually doesn't have as much of an impact on the bond market as the durable goods data does, but can lead to changes in mortgage pricing if it varies greatly from forecasts because it measures manufacturing sector strength. Current expectations are showing a 1.0% increase in new orders from April's levels. A decline in orders would be considered good news for the bond market and could help lower mortgage rates slightly Tuesday.
Wednesday has a couple of reports that likely will not directly influence mortgage rates unless they show significant surprises, but since it is a light week they are worth mentioning. The first two are employment related releases from private sector entities. They will give us different opinions on the labor market, but unless they show surprising strength or weakness, they will probably have little impact on mortgage rates Wednesday morning.
The Institute for Supply Management (ISM) will post their Services Index for June late Wednesday morning. This index is somewhat similar to last Friday's ISM Manufacturing Index but tracks sentiment at the services level. It has the potential to impact bond trading and mortgage rates if it shows a sizable variance from forecasts, particularly when little other data is being posted. However, it usually has little influence on mortgage pricing and cannot be considered a key report. Current forecasts are calling for a reading of 54.0, which would be a decline from May's reading.
The last data of the week is arguably the single most important report we see each month. The Labor Department will post June's unemployment rate, number of new payrolls added or lost and average hourly earnings early Friday morning. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, a large decline in payrolls and no change in earnings. Weaker than expected readings would likely help boost bond prices and lower mortgage rates Friday. However, stronger than expected readings could be extremely detrimental to mortgage pricing. Analysts are expecting to see the unemployment rate remain at 9.1%, with 80,000 jobs added and a 0.2% rise in earnings.
Overall, I am expecting to see a fairly quiet first day or so, but activity pick up drastically late in the week. The most important day is Friday, but the stock markets will also heavily affect trading if they rally or go into a sell-off.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Empire Home Mortgage Inc. is a registered Mortgage Broker with the NYS and Florida Banking Departments and our loans are arranged through third party providers.
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