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.
Visit our website, www.empirehomemortgageinc.com . There you can get answers to all of your financing questions, view rates and search for foreclosed properties.
If you are considering locking in an interest rate for a New York mortgage or a Florida mortgage, read this post.
Both of this morning’s economic releases gave us results that were negative for bonds and mortgage rates. The Commerce Department announced early this morning that retail level sales rose 0.8% last month, greatly exceeding forecasts of a 0.3% rise. Even the secondary reading that excludes more volatile auto transactions showed an increase that was nearly triple that of what analysts were expecting to see. This means that consumers spent much more than thought last month and spent at a fairly rapid pace, making the data bad news for mortgage rates because it is a strong sign of economic growth. Worth noting though, were downward revisions to both readings for the month of June, indicating an even weaker level of spending that month. This may be helping to slightly limit this morning’s bond losses.
Also posted this morning was July's Producer Price Index (PPI) by the Labor Department. They announced 0.3% rise in the overall reading and 0.4% increase in the core data, both of which were higher than forecasts of a 0.2% increase for both. This means inflationary pressures were stronger at the producer level of the economy last month than many had thought. Since rising inflation erodes the value of a bond’s future fixed interest payments, long term securities such as mortgage related bonds becomes less attractive when inflation is moving higher. The result is bonds being sold at a discount, driving their yields and mortgage rates higher. Therefore, this morning’s PPI report was also bad news for mortgage shoppers.
Tomorrow morning also has two pieces of economic data scheduled for release. The sister report of today’s PPI release will be posted at 8:30 AM ET. The Consumer Price Index (CPI) is even more important to the markets than today’s PPI because it tracks inflation at the consumer level of the economy. It is one of the most important reports the bond market sees each month and can have a large impact on bond trading and mortgage pricing. As with the PPI, there are also two readings in the report. Current forecasts call for a 0.2% increase in the overall index and a 0.2% rise in the core data reading. Declines in the readings, especially in the core data, should lead to lower mortgage rates as it would mean inflation is still not a threat to the economy, at least not at the consumer level. However, stronger than expected readings will likely cause another increase to mortgage rates.
July's Industrial Production will also be posted tomorrow, but at 9:15 AM ET. This data gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important to the markets and can influence mortgage rates slightly. Current forecasts are calling for a 0.6% increase in production, indicating some strength in the manufacturing sector. Good news for the bond market and mortgage rates would be a decline in output, signaling sector weakness. However, the CPI will likely be taking center stage as it carries much more significance than the production report.
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 Bankling Departments and our loans are arranged through third party providers.
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