The Home Loan Mortgage Blog

Weekly Update - 11/13/20

November 13th, 2020 11:45 AM by T. Fanning



Hey, I hope you've had a good week!

Rates ended the week mixed. 
Next week has only a few relevant monthly economic reports scheduled for release with a couple being housing related. The most important release, Retail Sales, doesn't fall into that category though. Monday has nothing we need to be concerned with, meaning we can expect weekend news and stock direction to move bonds as the new week begins.*

We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans; FHA and VA 1x Close Construction-Perm; 1% Down Conventional Program; 1.50% Down FHA Advantage Program; CHFA Financing; Down Payment Protection program; HomeStyle renovation program; and a jumbo, 5% down program. We also can do hobby farms, Ag properties and Alt-A (stated income, verified assets for self-employed borrowers)! To see a detailed list of programs, visit our website:  www.hlmcolorado.com/mortgageprograms

As always, please let me know if I can help you/friends/family/potential buyers/borrowers!                

Last Updated: 11/13/20

Friday's bond market has opened relatively flat despite favorable economic news. Stocks may be contributing to this morning's sluggish start in bonds with the Dow up 230 points and the Nasdaq up 76 points. The bond market is currently down 1/32 (0.88%), but strength late yesterday should improve this morning's mortgage rates by approximately.125 of a discount point. If you saw an intraday improvement late yesterday, you likely will see no change this morning.

Thursday's 30-year Treasury Bond auction was mostly uneventful. The benchmarks we use to gauge investor demand in the securities showed an average level of interest compared to other recent auctions. The results of the sale had little influence on late trading yesterday. Even though we saw bonds rally before closing, the biggest moves came well after the auction results were posted.

What likely fueled the bond rally was afternoon selling in stocks and somewhat favorable comments from Fed Chairman Powell about how the economy will look going forward. Neither the size of the downward move in stocks nor Chairman Powell's comments appear to be significant enough to cause the rally single-handedly. However, combined, it was enough for bond traders to take the day's early gains to another level. This caused many lenders to revise rates lower before closing.

October's Producer Price Index (PPI) was released at 8:30 AM ET this morning, revealing a 0.3% rise in the overall reading and a 0.1% increase in the core data. The overall reading slightly exceeded forecasts, but the core data was a bit softer than expectations. These readings offset each other and show that inflationary pressures remain subdued at the producer or manufacturing level of the economy. Rising inflation makes long-term securities, such as mortgage bonds, less appealing to investors. Therefore, we can consider the report neutral to slightly favorable for mortgage rates.

November's preliminary reading of the University of Michigan's Index of Consumer Sentiment was announced at 10:00 AM ET this morning. It came in at 77.0, down from October's 81.8 and lower than expectations. The decline is a sign that consumers are a little more concerned about their own financial situations this month than last. Since waning confidence often translates into weaker levels of consumer spending, we can consider the report favorable for bonds and mortgage rates.

Next week has only a few relevant monthly economic reports scheduled for release with a couple being housing related. The most important release, Retail Sales, doesn't fall into that category though. Monday has nothing we need to be concerned with, meaning we can expect weekend news and stock direction to move bonds as the new week begins. Look for details on all of next week's activities in Sunday evening's weekly preview.

If I were considering financing/refinancing a home, I would....

Lock if my closing were taking place within 7 days...
Lock if my closing were taking place between 8 and 20 days...
Float if my closing were taking place between 21 and 60 days...
Float if my closing were taking place over 60 days from now...

This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.*

*http://www.hlmcolorado.com/DailyRateAdvisory




LO NMLS: 208694 | CO License: 100008854 | Company NMLS ID: 479289
Regulated by the Colorado Division of Real Estate
www.nmlsconsumeraccess.org
Posted in:General
Posted by T. Fanning on November 13th, 2020 11:45 AM

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