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Monday Mortgage Update

Mortgage and Lending with Caliber Home Loans 288509

Market Comment - Week of August 22nd, 2011

Mortgage bond prices finished near unchanged last week but whipsawed up and down throughout the middle of the week. Rates started off on a bad note Monday in reaction to stronger than expected data. Housing starts, industrial production, and capacity use data all surprised to the upside. European debt worries resulted in flight to quality buying Wednesday and rates improved considerably that morning. Unfortunately those gains were erased Thursday afternoon following higher than expected headline consumer inflation data and selling pressure tied to the recent run up in prices. Despite the extreme volatility, mortgage bonds ended the week near unchanged.

Foreign demand for the Treasury auctions will be carefully monitored this week.

Economic Factors

Economic Indicator

Release Date Time

Consensus Estimate


New Home Sales

Tuesday, Aug. 23, 2011

Up 1.9%

Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.

2-year Treasury Note Auction

Tuesday, Aug. 23, 2011


Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.

Durable Goods Orders

Wednesday, Aug. 24, 2011

Down 0.8%

Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates.

5-year Treasury Note Auction

Wednesday, Aug. 24, 2011


Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.

Weekly Jobless Claims

Thursday, Aug. 25, 2011


Important. An indication of employment. Higher claims may result in lower rates.

7-year Treasury Note Auction

Thursday, Aug. 25, 2011


Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates.

Q2 GDP Second Estimate

Friday, Aug. 26, 2011

Up 1.2%

Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.

U of Michigan Consumer Sentiment

Friday, Aug. 26, 2011


Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.


Durable Goods Orders

Durable goods orders are generally believed to be a precursor of activity in the manufacturing sector because manufacturing must have an order before considering an increase in production. Conversely, a decrease in orders eventually causes production to be scaled back; otherwise the manufacturer accumulates inventories, which must be financed.

Unfortunately, durable goods orders data has many drawbacks. The first problem with the orders data is that they are extremely volatile. The volatility of the data usually is attributed to the civilian aircraft and defense components of the figure. For example, if Boeing has a big order for one of its jumbo jets, the civilian aircraft category can change by $3-4 billion. The same scenario is evident when an aircraft carrier is ordered, surges in the defense category result. The second problem with the data is that orders are continuously being revised. There are many times in the past when the advance report on durables showed an increase while a revision a week later showed a decrease. The revised data is found in the report on manufacturing orders, shipments, and inventories.

Since the data is very volatile and difficult to forecast, there is quite often a huge disparity between the actual release and the initial projections. Be cautious heading into data.

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WR Starkey Mortgage, LLP
NMLSR# 2146

6025 S. Quebec Street #110
Centennial, CO 80111






Jason M. Keith
Senior Loan Officer

Office: 720.489.0712
e-Fax: 1.866.546.9030
Cell: 303.263.6135 

NMLSR# 288509

©2011 Design by WR Starkey Mortgage, LLP NMLSR #2146. This is not a guarantee of financing. All borrowers must meet certain underwriting guidelines and credit criteria. Rules and Regulations may apply. Colorado: To check the status of your mortgage loan originator, visit http://www.dora.state.co.us/real-estate/index.html If you would like to be removed from receiving these newsletters, Click Here type REMOVE from Mortgage News.


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Views and opinions expressed on this site are not necessarily those of Starkey Mortgage.

Jason M. Keith
Senior Loan Officer
NMLSR # 288509
Cell: 303-263-6135

Starkey Mortgage

6025 S. Quebec Street

Suite 110

Centennial, CO 80111

To check the license status of your mortgage loan originator, visit http://www.dora.state.co.us/real-estate/index.htm.

Comments (2)

Pat O'Reilly
RE/MAX..214-289-6176 Irving and all of Dallas Fort Worth - Irving, TX


Great information on Mortgages..thanks and have a good week..

Aug 22, 2011 06:30 AM
Jason M. Keith
Caliber Home Loans - Parker, CO
Equal Housing Lender

Thank you Pat!  Appreciate you commenting.

Aug 22, 2011 06:41 AM