Market Comment Mortgage bond prices finished the positive, which helped rates improve a little. We started the week on a positive note but bounced around from there. Industrial production rose 0.6% in May and capacity utilization stood at 79.1. That data was slightly better than the expected 0.5% increase in production and utilization at 78.9. MBS’s did not budge following the data. Consumer prices rose 0.4% in May and the core rate, which excludes the volatile food and energy costs, rose 0.3%. Traders expected both components of CPI to increase 0.2% and rates spiked higher in response. The Fed lowered their GDP forecast Wednesday and rates improved near the end of that day. Weekly jobless claims were about as expected @ 312k. Mortgage interest rates fell by about 1/4 of a discount point for the trading week. LOOKING AHEAD
New Home Sales New Home Sales data is compiled monthly by the Department of Commerce’s Census Bureau and is gathered from builders throughout the country. The data represents new home sales for the nation as well as four areas of the country: the Northeast, the Midwest, the South, and the West. Information on the average price of a home, the number of homes for sale, and the supply of unsold homes are also provided. The data is an important indicator because it shows any strength or weakness in the housing sector. The housing sector data is valuable because when consumer spending changes, it appears in this sector first. Consequently, a chain reaction typically occurs. A slowdown in new home sales tends to lead to a slowdown in housing starts, which will continue to affect other indicators possibly continuing the economic worries. New Home Sales data is often volatile and difficult to predict. Most analysts look at a three-month average in order to see any trends in the growth rate. Surges in the release are often greeted with little more than an average reaction in the bond market. However, the data remains significant in showing the condition of the housing sector of the economy. Copyright 2014. 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. |
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