Simi Valley Rate Advisory, Home Loans

Mortgage and Lending with Core Financial Soultions, Inc

Core Financial Solutions

This week is packed with economic releases and major events that will likely lead to a fair amount of volatility in the markets and mortgage pricing. There are seven reports scheduled for release along with another FOMC meeting. There is no relevant data scheduled for release today, but there is data being released every other day of the week.

The firs t will be posted tomorrow morning with the release of the Consumer Confidence Index (CCI) for the month of October. This Conference Board index will be posted at 10:00 AM and gives us a measurement of consumer willingness to spend. It is now expected to show a small decline from last month's 99.8 reading, indicating that consumers are a little less likely to make large purchases in the near future. As long as the reading doesn't exceed 99.5, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

The second report of the week will be posted Wednesday morning with the release of the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP). The GDP is considered to be the benchmark measurement of economic growth because it is the sum of all goods and services produced in the U.S. and is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Wednesday's release is the first and usually has the biggest impact on the markets. Current forecasts call for an increase of approximately 3.1% in the GDP. I think we need to see a smaller increase for the bond market to rally and mortgage rates to drop. Just matching the estimate will probably bring a stock market rally and could cause mortgage rates to rise.

The second report of the day Wednesday will be the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.9%. A smaller than expected increase would be good news for bonds and mortgage rates.

The week's FOMC meeting is a two-day meeting that begins tomorrow and adjourns Wednesday afternoon. It is expected to bring another rate cut to key short-term interest rates. As suming this does happen, traders will be looking at the post-meeting statement for any indication of the Fed's next move. While it is widely expected that the Fed will cuts rates at this meeting, there is a lot of different opinions of when the following cut will come, if at all. The meeting will adjourn at 2:00 PM Wednesday, so look for quite a bit of volatility during afternoon hours.

Overall, it is going to be a pretty active week for the bond market and mortgage rates. Wednesday's GDP report and Friday's Employment report are the single most important releases of the week. Wednesday will likely be the most important day with the GDP and FOMC meeting, but Friday's data can also lead to sizable changes in mortgage rates. I am expecting to see significant movement in rates this week, so please maintain contact with your mortgage professional.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days.. . Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float 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.

Please let me know if I can provide loan information for any of your clients. I would be happy to quickly pre-qualify them, provide loan scenarios, or help improve their credit position to obtain a lower interest rate.

I am here to provide you and your clients with exceptional service in a courteous and respectful manner.

Paul Lefton Feature Properties Feature Properties Free Property Records


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