Mortgage News Roundup

 

It’s been an interesting week with interest rates slowly creeping up, refinancing numbers continuing down, and JP Morgan settling with the Department of Justice.

Mortgage Applications in U.S. Retreated for Third Straight Week

Has refinancing bottomed out? Bloomberg is reporting that mortgage applications have decreased to a two month low.

The Mortgage Bankers Association’s index fell 2.3 percent in the period ending Nov. 15 after a 1.8 percent loss compared to the week prior. The group’s purchases measure increased 5.8% to the highest since September. However, the refinancing gauge dropped 6.5% to the lowest since mid-September.

Reuters is reporting that the Fed has announced it would begin to slow its policy of buying $85 billion per month in Treasuries and mortgage-backed securities when economic growth meets its targets. Strong data recently has reinforced concerns that the tapering could come soon. Previously, it was expected that those accommodating monetary policies would last into 2014.

JP Morgan Settles With Government

The JP Morgan mortgage settlement was announced this week with a whopping $13 billion made up of $7 billion in civil securities settlements, $2 billion for “a civil penalty to settle the Justice Department claims under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA),” and $4 billion is “in the form of relief to aid consumers harmed by the unlawful conduct of JPMorgan, Bear Stearns and Washington Mutual.”

This is the largest settlement in U.S. history. JP Morgan, the nation’s largest bank, admitted to knowingly peddling the toxic securities that helped lead to the housing bubble and the worst financial meltdown since the Great Depression.

It was unclear yet how the $4-billion relief program would be apportioned to struggling homeowners, but that it would distributed over the next four years. Government officials said California would receive a large share as the state was hit hard by 1 million foreclosures.

Half of the program is intended to go toward writing down the balance of mortgages and waiving certain payments on home loans. Most of that would be achieved through outright forgiveness of first-mortgage debt.

The remaining $2 billion is to be allocated for various other uses, including aid to help low-income people buy homes, reduction of the interest rate on mortgages and efforts to reduce blight in neighborhoods most affected by foreclosures.

California’s public pension plans will also get some cash. The California Public Employees’ Retirement System will receive $221.6 million, while the California State Teachers’ Retirement System will receive $19.5 million. Smaller state-run pension plans will receive lesser amounts.
Yahoo! Finance posted a blog pondering if the punishment was a good idea or if it would make the economy worse:

Specifically, Whalen says the combination of the Fed’s ultra-low interest rates and a much more stringent regulatory environment are going to have a “chilling effect on credit creation.” (While the Fed’s zero-interest rate policy was initially good for banks, it is hurting all ‘savers,’ including banks, who are being forced to sit on higher levels of capital, he notes. “The cheap funding actually enhanced net interest margin, but the point where the ‘net’ benefit for banks went negative has long since passed.”)
That, in turn, will hurt economic growth and limit job creation, he says, creating a cruel circle of irony.

If you have any questions on mortgage interest rates, applications or refinancing, please contact a reputable loan officer who diligently studies the market trends to find the best answers for you and your situation.

Market Commentary for the Week of November 18th

This week has five economic reports scheduled for release that are relevant to mortgage rates in addition to the minutes from last month’s FOMC meeting. A couple of the reports are considered highly important to the markets, meaning we could see noticeable movement in rates more than one day. There is nothing scheduled to be posted Monday or Friday, so the middle part of the week will likely be the most active.

The 3rd Quarter Employment Cost Index (ECI) will be released at 8:30 AM ET Tuesday. This data tracks employer costs for salaries and benefits, giving us an indication of wage inflation pressures. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.5%. A smaller than expected increase would be good news for mortgage rates, but this is not one of the more important reports of the week. Therefore, it will likely take a large variance from forecasts for this report of have a noticeable influence on mortgage pricing.

Wednesday has four events scheduled that we need to watch, including two of the week’s more important economic reports. The Commerce Department will give us October’s Retail Sales figures early Wednesday morning. This data measures consumer level or retail spending. It is considered extremely important to the markets because it makes up over two-thirds of the U.S. economy. It is expected to show a 0.1% increase in retail-level spending, meaning consumers spent just a bit more last month than they did in September. A larger increase in spending would be considered negative news for bonds because rising spending fuels economic growth and raises inflation concerns in the bond market. If Wednesday’s report reveals a decline in spending that indicates consumers spent less than thought, bonds should react favorably, pushing mortgage rates lower. If it shows an unexpected increase, mortgage rates will likely move higher.

The second report of the morning will be the release of October’s Consumer Price Index (CPI) from the Labor Department, which is one of the two key inflation readings on tap this week. The CPI measures inflationary pressures at the consumer level of the economy and is one of the most important reports the bond market sees each month. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If it reveals stronger than expected readings, indicating that inflationary pressures are rising at the consumer level, the bond market will probably react negatively and cause mortgage rates to move higher. Analysts are expecting to see no change in the overall reading and a 0.2% increase in the core data.

October’s Existing Home Sales data will be posted by the National Association of Realtors late Wednesday morning. It gives us a measurement of housing sector strength and mortgage credit demand by tracking home resales in the U.S. This report is expected to show a small decline in sales, meaning the housing sector weakened slightly last month. That would be good news for the bond market and mortgage pricing, but unless it shows a significant surprise, it will likely not have a major impact on mortgage rates.

Also worth noting is the release of the minutes from the last FOMC meeting Wednesday afternoon. Traders will be looking for any indication of the Fed’s next move regarding monetary policy or potential tapering of their current bond purchases. They will be released at 2:00 PM ET, so any reaction will come during afternoon trading. This release is one of those that may cause some volatility in the markets after they are posted, or could be a non-factor. If they show anything surprising, we may see some movement in rates Wednesday afternoon, but it is more likely there will be little reaction.

Thursday’s only monthly report is October’s Producer Price Index (PPI) at 8:30 AM ET. This index is similar to Wednesday’s CPI, except it measures inflationary pressures at the manufacturing level of the economy. The overall reading is expected to show a 0.2% decline from September’s level while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while larger than forecasted increases could lead to higher mortgage rates Thursday morning.

Overall, I am expecting Wednesday to be the most active day for mortgage rates with three economic reports and the FOMC minutes set for release, but Thursday could be a little volatile also. The calmest day will probably be Monday while Friday should be a close second unless something unexpected transpires. The yield on the benchmark 10-year Treasury note closed last week just above 2.70%, which appears to be somewhat of a support level for the market. That means there is more of a possibility of it moving higher than breaking below and since mortgage rates tend to follow bond yields we could see higher mortgage rates before getting much of an improvement. Therefore, I strongly recommend proceeding cautiously if still floating an interest rate and closing in the near future.

Market Commentary for the Week of November 4th

 

This week has seven economic reports scheduled for release that may have an impact on mortgage rates. The most important data is scheduled later in the week, but there is data or speeches from Fed members set for every day making it likely that we will see an active week for mortgage rates with a good possibility of intra-day revisions multiple days.

Monday kicks off the week’s schedule with the release of two months of Factory Orders data. We will get results for August and September instead of the traditional single month due to delays caused by the government shutdown. This report is similar to last week’s Durable Goods Orders release except it includes orders for both durable and non-durable goods. It is expected to show a 0.3% rise in August and a 1.8% increase in new orders in September. I don’t believe that August’s data will have much of an impact on Monday’s mortgage rates. This report is normally considered to be only moderately important and August data is a couple months old now. Basically, smaller than forecasted increases would be good news for the bond market and mortgage rates while bigger increases would be bad news and could contribute to higher mortgage pricing since it would indicate economic strength.

There is nothing of relevance scheduled for release Tuesday and Wednesday’s sole report is not considered to be highly important. Wednesday’s data will come from the Conference Board, who will post their Leading Economic Indicators (LEI) for September at 10:00 AM ET. This report attempts to predict economic activity over the next three to six months. It is expected to show a 0.6% rise, indicating that the overall economy is likely to grow in the immediate future. Good news for the bond and mortgage markets will be a much smaller increase than forecasts. However, this data is not known to be highly influential on rates, so it will likely take a large variance from forecasts for it to affect Wednesday’s mortgage pricing.

Thursday starts the big news for the week. The preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) will be released at 8:30 AM ET Thursday morning. The GDP is considered to be the benchmark measurement of economic growth because it is the total of all goods and services produced in the U.S. and therefore 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. Thursday’s release is the first and usually has the biggest impact on the markets. Current forecasts call for an increase of approximately 1.9% in the GDP, which would mean that the economy grew at a noticeably slower pace than the 2nd quarter’s 2.5% rate. If this report shows a much smaller increase, I am expecting to see the bond market rally and mortgage rates fall. However, a larger than expected rise could lead to a rally in stocks, bond selling and a sizable increase in mortgage pricing Thursday morning.

The first of Friday’s three reports is another key release with the Labor Department posting October’s Employment data. It is arguably the single most important monthly report since it is comprised of many statistics and readings, including the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for the unemployment rate to move higher by 0.1% to 7.3%, an increase in payrolls of approximately 100,000 and a 0.2% increase in average earnings. Weaker than expected readings should renew concerns about the labor market and rally bonds enough to improve mortgage rates, especially if the stock markets react poorly to the news. On the other hand, if the report indicates employment sector strength, especially after the government shutdown, we could see mortgage rates spike noticeably higher Friday morning.

September’s Personal Income and Outlays report will also be posted early Friday morning. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see a 0.2% increase in income and a 0.2% rise in spending. Smaller than expected increases in both readings would be good news for the bond market and mortgage pricing, but the Employment report will take center stage Friday morning.

The week’s economic calendar closes late Friday morning when November’s preliminary reading of the University of Michigan’s Index of Consumer Sentiment is posted. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 75.3, up from October’s final reading of 73.2. That would be considered negative news for bonds because rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely. The lower the reading, the better the news it is for mortgage shoppers.

There are also quite a few speaking engagements by Fed members this week that are worth watching, including Chairman Bernanke. The topics of some of these speeches, which are scheduled each day this week, appear to be directly related to the economy and monetary policy. This means that their words will be watched closely by market participants and can be highly influential on the financial and mortgage markets.

Overall, I believe the most important days of the week for mortgage rates are Thursday and Friday. This is when we will likely see the most movement in rates due to the importance of the data those days. Tuesday appears to be the best candidate for lightest day with nothing scheduled, but we should be alert each day for unexpected news or swings in trading that could cause mortgage rates to jump. The benchmark 10-year Treasury Note yield closed at 2.62% Friday, which could mean there is more room for it to rise before coming down if it does not fall below 2.60% right away. Therefore, please proceed cautiously if still floating an interest rate and closing in the next month or so.

Mortgage News Roundup

 

In today’s mortgage news roundup, we look at another bank that had to settle lawsuits, the idea of test-driving a home before you buy, and more reasons to buy or refinance before 2014 hits.

Ally settles U.S. regulators’ mortgage securities claims

Residential Capital LLC, the former mortgage unit of Ally Bank, has agreed to settle lawsuits by two U.S. regulators over alleged misstatements about its residential mortgage-backed securities.

Residential Capital is under Chapter 11 Bankruptcy protection right now, and will have their bankruptcy exit plan reviewed in a hearing on November 19th.

Alfred Pollard, general counsel for FHFA, said in a statement that details will be released after the end of the current fiscal quarter, as both sides continue to hash out final terms. Ally was one of 18 financial institutions sued by the FHFA in 2011. FHFA targeted companies that they felt made false or misleading statements relating to some $200 billion in residential mortgage-backed securities bought by Fannie Mae or Freddie Mac. FHFA is the conservator organization for Fannie Mae and Freddie Mac.

David Barr, a spokesman for the FDIC, said that agency’s settlement was worth $55.3 million, and resolves four lawsuits against Ally related to mortgage-backed securities.

Quirky Trend Could Save You From Buying The Wrong House.

Try before you buy works well with automobiles, but what about houses?

There is a new trend that allows serious potential home buyers to spend some time alone in the property without the pressure of anyone else. It allows the buyer to pretend that they are living there. You suddenly see things that you might not have just doing a walk through. You could pretend to cook and discover that you don’t like the way the oven door opens into the doorway.

Or that you thought you’d enjoy living next to a park, but weren’t expecting the crush of cars with people who exercise at 5:30am or 6:30pm.

Mortgage refinancing projected to plunge in 2014 as rates rise

Is this the end of bargain mortgage rates?

Home lending will fall by a third next year as interest rates rise, a mortgage industry group says in a new forecast.

The Mortgage Bankers Assn. said Tuesday that it expects to see $1.19 trillion in new mortgages written during 2014, down 32% from $1.75 trillion this year.

Jay Brinkmann, the group’s chief economist, said all-cash home purchases by bargain-hunting investors – a huge driver of home sales the past few years – are expected to taper off next year.

He also expects mortgage rates to rise above 5% in 2014 and to increase further to 5.3% by the end of 2015.

As we’ve reported in prior posts, now is the time to get a mortgage…new or refinance. Contact your local mortgage broker and discuss your goals and current situation to find the best solution for you.

Market Commentary for the Week of October 28th

 

This week brings us the release of six economic reports and two relevant Treasury auctions for the bond market to digest in addition to another FOMC meeting. Most of the data is set for the first half of the week, so we could see plenty of movement in rates the first couple days. The data scheduled this week ranges from moderately to extremely important, so some reports will have a much bigger impact on trading than others. We also need to keep an eye on the stock markets as they can be heavily influential on bond market direction and mortgage rates.

The week kicks off Monday with the release of a moderately important manufacturing report. September’s Industrial Production report will be posted at 9:15 AM ET Monday, giving us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.3% increase in production output, indicating minor growth in the sector. Good news for the bond market and mortgage rates would be a decline in this data.

There are three reports scheduled for release Tuesday, two of which are very important to the financial and mortgage markets. The first is September’s Retail Sales report at 8:30 AM ET that measures consumer spending. This data is very important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Therefore, any related data is watched closely. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop Tuesday morning. However, stronger than expected sales would fuel optimism about the economy and would likely lead to a stock rally that hurts bonds prices and pushes mortgage rates higher. Current forecasts are calling for a 0.1% decline in retail-level sales, meaning consumers spent a little less last month than they did in August. Good news for the bond market and mortgage pricing would be a larger decline in sales.

September’s Producer Price Index (PPI) is the second key report of the day, also at 8:30 AM ET. This is one of the two very important inflation readings we get each month. The index measures inflationary pressures at the producer level of the economy. Analysts are expecting to see a 0.2% increase in the overall index and a 0.1% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could raise concerns in the bond market about future inflation, leading to higher mortgage rates Tuesday. However, weaker than expected readings should result in bond market strength and lower mortgage pricing.

October’s Consumer Confidence Index (CCI) is Tuesday’s last report. This Conference Board index will be released at 10:00 AM ET and gives us a measurement of consumer willingness to spend. It is expected to show a drop in confidence from last month’s 79.7 reading. That would mean that consumers felt a worse about their own financial and employment situations than last month, indicating they are less likely to make large purchases in the near future. That would be good news for the bond market because consumer spending makes up a significant part of our economy. As long as the reading doesn’t exceed the forecasted 74.1, we will likely see the bond market react favorably to this report.

Wednesday’s only economic data is also very important to the bond market. September’s Consumer Price Index (CPI) will be released at 8:30 AM ET Wednesday. It measures inflationary pressures at the very important consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.1% in the core data reading. A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bond’s future fixed interest payments, so when inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

This week’s FOMC meeting is a two-day meeting that begins Tuesday and adjourns Wednesday afternoon. There really is no possibility of the Fed changing key short-term interest rates this week. But market participants will be looking at the post-meeting statement for any indication of a change in Fed sentiment or possibly further development on tapering of their current bond buying program. Possible effects the government shutdown had on the economy will also be of interest to the markets. The meeting will adjourn at 2:00 PM ET Wednesday, so look for any reaction to the statement to come during afternoon hours.

There is no major economic news set for release Thursday, but there is a highly influential report scheduled for late Friday morning. That will come from the Institute for Supply Management (ISM), who will post their manufacturing index for October at 10:00 AM ET. This index measures manufacturer sentiment, which is important because it gives us an indication of manufacturing sector strength or weakness. It is considered to be one of the more important reports we see each month, partly because it is the first report every month that tracks the preceding month’s activity. Friday’s release is expected to show a reading of 55.0, indicating that manufacturer sentiment slipped from September’s level of 56.2. This means fewer surveyed business executives felt business improved during the month than in September, hinting at manufacturing sector weakness. A smaller than expected reading would be good news for bonds and mortgage rates, especially if it drops below the benchmark 50.0.

This week also has Treasury auctions scheduled the first three days. The only two that have the potential to influence mortgage rates are Tuesday’s 5-year and Wednesday’s 7-year Note sales. If those sales are met with a strong demand from investors, particularly Wednesday’s auction, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor interest may create selling in the broader bond market and lead to upward revisions to mortgage rates.

Overall, it appears Tuesday or Wednesday could be the most active day for mortgage rates and Thursday will probably be the lightest. The importance of Friday’s sole report makes it likely to be an active day also, although I suspect the most movement will take place the middle days. With data or other events relevant to mortgage rates scheduled four of the five days, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Mortgage News Roundup

 

The big news this week are the lawsuits against BofA and J.P. Morgan Chase. We’ll also look at 5 things you’re doing that are hurting you financially. Home prices are on the rise again, and we’ll talk about how Blackstone Funding group managed to create the largest single-family rental business in the U.S.

Jury: BofA liable for Countrywide mortgage fraud

The big news across all the financial media is that BofA committed fraud when they sold sub-prime mortgages to Fannie Mae and Freddie Mac in a program they called The Hustle. The mortgages were originally acquired from when BofA purchased and merged with Countrywide.

The jury also found that Rebecca Mairone, a former Countrywide Financial Corp. executive, was liable for fraud for her role in leading the Hustle loan-processing program.

The trial lasted approximately one month. Investors are also currently suing J.P. Morgan for $5.75 billion.

5 Things You’re Doing That Could Make Your Life Hell

Credit.com posted a useful list on Yahoo Finance of 5 things you’re doing that could be negatively affecting your credit score.

1. Oversharing on Social Networking Sites – those quizzes could be a way for the bad guys to get your personal information like mother’s maiden name, your first school, your first pet’s name, etc. Also you should be careful of sharing information like your birthday and when you’re gone on vacation.
2. Joining Accounts With ‘The One’ – when you combine your accounts with someone else, you’re dinged equally for late or missing payments.
3. Focusing on Credit Only When You Need to Use it - you need to build, nurture, manage and protect your credit portfolio regularly & not pull it off every few years.
4. Clicking on a Link in an Email From the IRS – Usually, it’s a phish (a false email used to get you to provide personal information). The IRS communicates through good old fashioned snail mail.
5. Spilling the Beans Over the Phone – just because someone calls and says they’re from your credit card company doesn’t mean they really are. These scammers ask for your credit card number…and since they called, shouldn’t they be telling you what it is? For your safety, tell them you’ll call them back, and then use the 1-800 number of the back of your credit card to verify.

Home Prices Rise for 19th Straight Month; Pace Decelerating

Home prices posted a 19^th consecutive monthly gain in August the Federal Housing Finance Agency (FHFA) said on Wednesday. FHFA’s purchase only Home Price Index (HPI) rose 0.3 percent on a seasonally adjusted basis from July but the 1.0 percent increase previously reported for July was revised down to 0.8 percent.

The FHFA index is calculated using home sales price information from mortgages sold to or guaranteed by the government sponsored enterprises Fannie Mae and Freddie May.

Blackstone Funding Largest U.S. Single-Family Rentals

Blackstone Group LP spent $7.5 billion acquiring 40,000 houses over the last two years creating the largest single-family rental business in the U.S. The private-equity firm is now planning to sell bonds backed by lease payments.

Blackstone Group created their Invitation Homes division in April 2012 to buy and renovate properties to lease, is double the size of American Homes 4 Rent which is the next in line.

The properties are located in states such as California, Arizona, Florida and Nevada where the number of foreclosures was quite high.

Market Commentary for the Week of October 21st

 

This week brings us the release of five economic reports that may influence mortgage rates, one of which is arguably the single most important monthly report for the markets. There is data set for release four of the five days, so we can expect to see movement in rates multiple days this week. We are also into corporate earnings season, which can heavily influence stock trading and indirectly bond trading. If earnings reports start to indicate a general consensus of weaker earnings than analysts were expecting, stocks should go into selling mode and bonds could benefit as investors seek the safety of government and mortgage bonds.

The National Association of Realtors will start the week’s activities with the release September’s Existing Home Sales data late tomorrow morning. This report gives us an indication of housing sector strength and mortgage credit demand by tracking home resales. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show a decline in sales from August to September, meaning the housing sector softened. That would be favorable news for the bond market since a weakening housing sector makes a broader economic recovery less likely and allows bonds to remain appealing to investors.

The Labor Department will post September’s Employment report early Tuesday morning, rescheduled from earlier this month due to the government shutdown. This extremely important report will reveal the U.S. unemployment rate, number of new payrolls added or lost during the month and average hourly earnings. These are considered to be key readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, falling payrolls and a drop in earnings.

If this report gives us weaker than expected readings, bond prices should move higher and we should see lower mortgage rates Tuesday. Although, it is worth noting that the accuracy of the data is likely to be questioned as a result of the shutdown. However, stronger than forecasted readings would be bad news for the bond market and mortgage rates. Analysts are expecting to see the unemployment rate remain at 7.3%, an increase of 183,000 new jobs from August’s level and a 0.2% increase in earnings.

There is nothing of importance set for release Wednesday and Thursday has only a minor housing report scheduled. That would be September’s New Home Sales at 10:00 AM ET. This data covers the small percentage of home sales that Monday’s Existing Home Sales report didn’t include. It is expected to show an increase in sales of newly constructed homes, but regardless of its results I am not expecting it to have a significant impact on mortgage rates Thursday.

Friday has two pieces of economic data that could affect mortgage rates. The Commerce Department will post Durable Goods Orders for September at 8:30 AM ET. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. Analysts are currently calling for an increase in new orders of approximately 3.5%. If we see a much larger increase in orders, mortgage rates will probably rise as bond prices fall. On the other hand, a significantly weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast. Therefore, a small variance from forecasts likely will have little impact on Friday’s bond trading or mortgage pricing.

The week’s last report comes just before 10:00 AM ET Friday when the University of Michigan updates their Index of Consumer Sentiment for this month. This report is moderately important because it helps us measure consumer confidence, which is believed to indicate consumers’ willingness to spend. If consumers are more confident in their own financial and employment situations, they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watch closely. Current forecasts show this index falling from the preliminary reading of 75.2 to 74.5, meaning confidence was not as strong this month as previously thought. That would be good news for mortgage rates.

Overall, Tuesday is the most important day of the week with the almighty Employment report now scheduled. None of the other data set for release is considered key or market-moving, but most of the reports can still affect mortgage rates if they show a noticeable variance from forecasts. Wednesday should be the calmest day unless something unexpected happens. However, stock movement can drive bond trading and impact mortgage rates any day, so please proceed cautiously if still floating an interest rate. Maintaining contact with your mortgage professional would be prudent this week.