November 15th, 2024 11:54 AM by T. Fanning
Happy Friday, I hope you’ve had a good week!
The Consumer Price Index rose to 2.6% last month, up from September's 2.4%, signaling a stall in inflation progress. Notably, three of four reports today, including Retail Sales, surpassed expectations, highlighting unexpected economic strength. Rates responded by ending the week higher.
Next week is light on impactful economic data, potentially allowing the 10-year Treasury yield to drop. If it does, we might see mortgage rates decrease in the coming days.
We offer Conventional, FHA, VA, USDA, Jumbo and regular construction financing. Some of our niches include: Chenoa Fund loans (100% FHA financing); Conventional 0% down; 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: 11/15/24
Friday's bond market has opened in negative territory following stronger than expected consumer spending data. Stocks are extending yesterday's selling even though that same data is favorable for corporate earnings. The Dow is currently down 289 points while the Nasdaq has lost 309 points. The bond market is down 8/32 (4.47%), which with late selling yesterday should cause an increase of approximately .250 of a discount point in this morning's mortgage rates. If you saw an increase late Thursday, you likely will see a smaller increase this morning.
Yesterday afternoon's speech by Fed Chairman Powell in Dallas helped to reverse Thursday morning's welcomed bond gains. The headline that seems to have done the damage was “The economy is not sending any signals that we need to be in a hurry to lower rates.” Since the Fed keeps short-term interest rates higher to combat inflation, traders took that to mean there is concern inflation is not retreating to the preferred annual rate of 2.0% as quickly as thought. This followed stronger than expected wholesale inflation numbers yesterday morning. Bonds were able to improve despite that early data, but the afternoon comments undercut that strength, leading to a bit of selling and an upward revision to mortgage rates from some lenders.
This morning's October's Retail Sales report gave us some conflicting news about consumer spending in the U.S. The headline number showed sales rose 0.4% last month, exceeding forecasts of 0.3%. However, a secondary reading that excludes more costly and volatile auto transactions rose only 0.1% when it was expected to also rise 0.3%. If that were the end of the news, we could have labeled the report favorable for bonds and mortgage pricing. Unfortunately, sizable upward revisions to September's readings (revised higher by 0.4% overall and 0.5% ex-auto sales) are skewing October's results. It appears that this is what is fueling this morning's bond selling.
The final economic report of the week was October's Industrial Production data at 9:15 AM ET. It showed no surprises with a 0.3% decline in output at U.S. factories, mines and utilities. Weaker output is a sign of manufacturing sector weakness, but the fact it matched expectations and came after the highly important sale data has prevented this report from affecting this morning's rates.
Next week is much lighter than this week was in terms of relevant economic data and other scheduled events that are expected to impact mortgage rates. There are a few reports listed and a Treasury auction midweek, but none are considered to be highly important or key data. We had been seeing strong resistance to the benchmark 10-year Treasury Note yield at 4.44% since the election before this morning's move. If it closes today at or below that level, it would make a decent argument that yields and mortgage rates are more likely to move lower than higher in the immediate future. The lack of influential data next week could allow the 10-year yield to retreat from that point, bringing mortgage rates lower the next few days. 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... Float 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.
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