| Market Comment
Mortgage bond prices finished the week near unchanged holding rates steady. New home sales printed at 654K versus the expected 580K. Existing home sales printed at 5.39M versus the expected 5.54M units. According to the FHFA Housing Price Index, housing prices rose at a 5.6% annual rate in the previous 12 months. The monthly gain was 0.2% which was near expectations. Federal Reserve Chair Yellen spoke at the Jackson Hole Symposium. The gathering is sponsored by the Federal Reserve Bank of Kansas City and focuses on important economic issues that face the U.S. and world economies. She provided no clear indication of when the next rate hike may occur. Mortgage interest rates finished the week unchanged.
LOOKING AHEAD
Economic
Indicator |
Release
Date & Time |
Consensus
Estimate |
Analysis |
| Personal Income and Outlays |
Monday, Aug. 29,
8:30 am, et |
Up 0.2%,
Up 0.3% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation |
Monday, Aug. 29,
8:30 am, et |
Up 0.1% |
Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Consumer Confidence |
Tuesday, Aug. 30,
10:00 am, et |
97.2 |
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| ADP Employment |
Wednesday, Aug. 31,
8:30 am, et |
178K |
Important. An indication of employment. Weakness may bring lower rates. |
| Weekly Jobless Claims |
Thursday, Sept. 1,
8:30 am, et |
262K |
Important. An indication of employment. Higher claims may result in lower rates. |
| Revised Q2 Productivity |
Thursday, Sept. 1,
8:30 am, et |
Up 0.1% |
Important. A measure of output per hour. Improvement may lead to lower mortgage rates. |
| ISM Index |
Thursday, Sept. 1,
10:00 am, et |
52.5 |
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Employment |
Friday, Sept. 2,
8:30 am, et |
4.9%,
Payrolls +266K |
Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
| Factory Orders |
Friday, Sept. 2,
10:00 am, et |
Down 0.8% |
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
Rate Hike Back in Focus
Market sentiment regarding a future Fed rate hike has not changed much from the recent approximate 20% chance at the September meeting which takes place on the 16th and 17th. What has changed is the language coming from some Fed officials.
San Francisco Fed President Williams, New York Presidents Dudley, and Atlanta President Lockhart have all noted a possible rate increase in the short term. The most recent minutes from the last Fed meeting stated, “Several (members) expressed concern that an extended period of low interest rates risked intensifying incentives for investors to reach for yield and could lead to the misallocation of capital and mispricing of risk, with possible adverse consequences for financial stability.” Now is a great time to take advantage of historically low mortgage interest rates to avoid future market volatility.
Copyright 2016. All Rights Reserved. Mortgage Market Information Services, Inc. www.ratelink.com The information contained herein is believed to be accurate, however no representation or warranties are written or implied. |
