October 13th, 2023 11:35 AM by T. Fanning
Hello, I hope you’re having a good week.
The conflict in the Middle East and slightly disappointing inflation reports caused interest rates to have big fluctuations this week. Compared to last Friday, rates ended a bit lower. Next week brings us a handful of relevant economic reports with one being highly important to the markets. In addition to the data, there is also another Treasury auction and quite a few Fed speaking engagements that will draw plenty of attention. Fed Chairman Powell has an event midweek that may cause a strong reaction in the financial and mortgage markets. The week starts off light with nothing scheduled Monday that we need to be concerned about.*
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans (100% FHA financing); Conventional, FHA and VA 1x Close Construction-Perm; 1.50% Down FHA Advantage Program; CHFA Financing; HomeStyle renovation program; and a Jumbo, 5% down program. We can also do non-traditional programs! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
As always, please let me know if I can help you, your friends/family/potential buyers/borrowers!
Last Updated: 10/13/23
Friday's bond market has opened well in positive territory, recovering yesterday's late losses. The major stock indexes are mixed, pushing the Dow up 173 points and the Nasdaq lower by 17 points. The bond market is currently up 18/32 (4.62%), which should keep this morning's mortgage rates close to Thursday's early pricing. Many lenders revised pricing higher during afternoon trading as bond losses spiraled. If you saw an intraday change yesterday, it likely will be erased, leaving rates where they were yesterday morning.
Yesterday's 30-year Treasury Bond auction didn't go well. The benchmarks we use to gauge investor demand indicated a weak interest in the securities. This was worse than Wednesday's 10-year Note sale and hints at a waning appetite for long-term securities. Since mortgage rates are based on long-term mortgage bonds, we have to label the sale results bad news for mortgage pricing. We saw bond losses extended further after results were announced at 1:00 PM ET, contributing to widespread upward revisions to rates late yesterday.
October's Index of Consumer Sentiment was posted late this morning, closing this week's scheduled activities. The University of Michigan announced a reading of 63.0 that fell well short of forecasts. Analysts were expecting a reading of 67.5 after September's came in at 68.1. The large decline means surveyed consumers were far less optimistic about their own financial situations than last month and are less likely to make a large purchase in the near future. As a sign of potentially slowing economic activity, this is good news for bonds and mortgage rates.
This morning's early strength seems to be a bit suspicious. The consumer sentiment data was good news, but that report doesn't carry enough significance to justify this much of a rally. It doesn't come from a governmental agency. There was overnight strength in the global markets, which may be the strongest factor in this morning's gains. I would not be surprised to see some of these early bond gains evaporate before the end of the day. If this happens, we may get an afternoon upward revision in rates later today.
Next week brings us a handful of relevant economic reports with one being highly important to the markets. In addition to the data, there is also another Treasury auction and quite a few Fed speaking engagements that will draw plenty of attention. Fed Chairman Powell has an event midweek that may cause a strong reaction in the financial and mortgage markets. The week starts off light with nothing scheduled Monday that we need to be concerned about. Look for details on all of the week's calendar 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... Lock 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.*
*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
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