Consumer Confidence and Mortgage Rates

Consumer Confidence:

The Consumer Confidence report was released this morning. Expectations were for a reading of 125.0. However the actual reading came in at 135.7; significantly higher than expected. Last months reading was 121.5.

Generally speaking; positive economic reports equal higher mortgage rates. Negative economic reports equal lower mortgage rates. This a broad generalization and the market does not always follow this.

The Impact on Mortgage Rates:

The good news is that this block buster report had little to no impact on mortgage rates. Just after the report was released; the 10y yield moved above 2.07% and Mortgage Backed Securities sold off. Hoever as the day moved on the market settled down and essentially finish flat for the day.

This is good news for mortgage rates heading into to tomorrow's Fed Announcement.

The Fed Announcement:

Everyone is expecting the Fed to lower by .25% tomorrow. If they decide to do that it will have no impact on Mortgage Back Securities and no impact on consumer mortgage rates. The reason is that the market has been anticipating this for the last 2-4 weeks and because of that the market has already adjsuted before the Fed actually did anything.

If the Fed lowers by .50% then that could have a positive impact on mortgage rates heading into August. However it's highly unlikely that the Fed will lower by .50%.

Market participants are looking for what the Fed has to say in the press release and the following days. If they express concern about the economy and that they are ready to act again than that might end up being a positive for mortgage rates.

If they say everything is good now that they lowered a .25% and they say it's unlikely they'll lower again then that could end up being a negative for mortgage rates.

JB Mortgage Capital, Inc.:

Contact me directly for a no-cost/no-obligation quote: 1-800-550-5538. Low mortgage rates, top notch customer sevice and an A+ rating with the Better Business Bureau! Or visit us online to see our low mortgage rates, obtain valuable information and you can also request a quote.