If you are looking for a Mortgage Professional who will give you the type of service that you deserve, contact Bob Amato (NMLS # 8632) and Empire Home Mortgage Inc. (NMLS # 44882). We answer our phones seven days a week until 9PM. Put us to the test! Our toll free number is (866) 742-5227.
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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.
There were two pieces of economic data posted this morning, both coming at 10:00 AM ET. The Conference Board released April's Consumer Confidence Index (CCI), announcing a reading of 69.2 that fell just short of expectations. Although a downward revision to March’s reading (from 70.2 to 69.5) means that April’s reading slipped by a smaller margin than analysts had expected. Generally speaking, any decline in consumer confidence is good for bonds because it means they are less likely to make a large purchase in the near future. However, today’s results should be considered neutral for bonds and mortgage pricing.
The second report of the day was March's New Home Sales that showed purchases of newly constructed homes fell last month when analysts were expecting to see an increase in sales. This means that a small portion of the housing market (new homes) was not as strong as many had expected, however, skewing the results is a sizable upward revision to February’s sales figures. Due to the revision and the relatively low importance this data carries, it has not had an impact on this morning’s bond trading or mortgage rates.
Tomorrow is going to be an active day to say the least. March's Durable Goods Orders will be released at 8:30 AM ET, giving us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. These are products that are expected to last three or more years, such as appliances and electronics. Current forecasts are calling for a decline in new orders of 1.7%. This would be a sign of manufacturing sector contraction, but this data can be quite volatile from month to month. Therefore, a small variance between forecasts and the actual results will not heavily influence the markets or mortgage rates. A much larger decline would be considered good news for bonds and mortgage pricing, while a large increase would indicate manufacturing sector strength. A sign of solid manufacturing growth could lead to higher mortgage rates tomorrow.
Also tomorrow is the adjournment of this week’s FOMC meeting. It will likely adjourn with an announcement of no change to key short term interest rates, but we may see some volatility in the markets following the 12:30 PM ET post meeting statement. If the statement gives any hint of change in their current forecasts when they expect to adjust key short term interest rates, we could see a sizable change to mortgage rates early tomorrow afternoon.
In addition to this week's economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5 year Notes tomorrow and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during afternoon hours.
At 2:15 PM tomorrow, we have the press conference hosted by Fed Chairman Bernanke, who will answer questions about the Fed’s thoughts on the economy, inflation and other highly relevant topics. It will likely also lead to afternoon volatility in the markets and mortgage rates tomorrow. Therefore, be prepared for an active day in the markets and mortgage rates.
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.
Empire Home Mortgage Inc. is a registered Mortgage Broker with the New York and Florida State Banking Departments and our loans are arranged through third party providers.
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