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Mortgage Market in Review – October 30, 2017


Market Comment

Mortgage bond prices finished the week lower which put upward pressure on rates. Rates were flat the beginning of the week amid reports out of the Eurozone about unrest in Spain. Higher stocks and talk of potential Fed Chair replacements when Yellen’s term ends early next year sent rates higher. The data generally showed economic strength. Durable goods orders rose 2.2% versus the expected 1.3% increase. New home sales were 667K versus the expected 550K. Weekly jobless claims were 233K versus the expected 228K mark. Gross domestic product rose 3%. Analysts looked for a reading of 2.8%. However, consumer sentiment was weaker than expected which tempered some of the upward pressure. We ended the week worse by approximately 1/8 to 1/4 of a discount point.


Date & Time

Personal Income and Outlays Monday, Oct. 30,
8:30 am, et
Up 0.3%,
Up 0.1%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
PCE Core Inflation Monday, Oct. 30,
8:30 am, et
Up 0.2% Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
Q3 Employment Cost Index Tuesday, Oct. 31,
8:30 am, et
Up 0.4% Very important. A measure of wage inflation. Weakness may lead to lower rates.
Consumer Confidence Tuesday, Oct. 31,
10:00 am, et
120 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
ADP Employment Wednesday, Nov. 1,
8:30 am, et
145K Important. An indication of employment. Weakness may bring lower rates.
ISM Index Wednesday, Nov. 1,
10:00 am, et
61 Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Fed Meeting Adjourns Wednesday, Nov. 1,
2:15 pm, et
No rate changes Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
Preliminary Q3 Productivity Thursday, Nov. 2,
8:30 am, et
Up 1.5% Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
Weekly Jobless Claims Thursday, Nov. 2,
8:30 am, et
235K Important. An indication of employment. Higher claims may result in lower rates.
Employment Friday, Nov. 3,
8:30 am, et
Payrolls +168K
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.

A Sure Thing

Timing is one of the most important factors in success. Unfortunately, knowing the perfect time to lock in a loan is impossible until after the fact. While analysts constantly try to predict the future, the bottom line is they continually fall short in terms of accuracy. The Fed is a prime example of this. They hoped inflation would be higher now after several rate hikes.

Mortgage rates remain historically favorable and are a sure thing. Floating is risky.

Copyright 2017. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.