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Mortgage Market in Review – September 12, 2016

   

Market Comment

Mortgage bond prices finished the week near unchanged which kept rates steady.  There was some seesaw trading but within a relatively narrow margin as the European Central Bank did not announce an extension of their asset purchases past the current March 2017 deadline.  Oil inventories fell from an expected increase.  In addition, continued talk of a Fed rate hike in the short term caused market volatility.  The odds of a Fed rate hike in September shifted from an 18% chance to near 50% chance by the end of the week.  Weekly jobless claims printed at 259K and continuing claims, a summation of all receiving benefits, at 2,144K. Expectations were for claims at 265K and continuing claims at 2,159K.  Mortgage interest rates finished the week unchanged to worse by approximately 1/8 of a discount point.


LOOKING AHEAD

Economic
Indicator
Release
Date & Time
Consensus
Estimate

Analysis
Treasury Auctions Begin Monday, Sept 12,
1:15 pm, et
None Important.  3Y and 10Y notes Monday, 30Y bond Tuesday.  Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims Thursday, Sept. 15,
8:30 am, et
258K Important.  An indication of employment.   Higher claims may result in lower rates.
Producer Price Index Thursday, Sept. 15,
8:30 am, et
Up 0.1%,
Core unchanged
Important.  An indication of inflationary pressures at the producer level.  Weaker figures may lead to lower rates.
Retail Sales Thursday, Sept. 15,
8:30 am, et
Up 0.2% Important.  A measure of consumer demand.  A smaller than expected increase may lead to lower mortgage rates.
Philadelphia Fed Survey Thursday, Sept. 15,
10:00 am, et
2.4 Moderately important.  A survey of business conditions in the Northeast.  Weakness may lead to lower rates.
Industrial Production Thursday, Sept. 15,
9:15 am, et
Up 0.6% Important.  A measure of manufacturing sector strength.  A lower than expected increase may lead to lower rates.
Capacity Utilization Thursday, Sept. 15,
9:15 am, et
75.3% Important.  A figure above 85% is viewed as inflationary.  Weaker figure may lead to lower rates.
Consumer Price Index Friday, Sept. 16,
8:30 am, et
Unchanged%,
Core up 0.1%
Important.  A measure of inflation at the consumer level.  Weaker figures may lead to 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 Jitters

Mortgage rates have been jittery as of late with significant swings back and forth but remain very favorable.  The uncertainty came amid continued warnings from Fed officials of possible Fed rate hikes starting in September.   Many signs show the US economy is heading in the right direction.  Unemployment is low and housing prices have risen.  A basic economic concept is rates will rise when the economy is doing well.  However, these are unusual times for sure.  The future is murky at best and where rates are going is unknown.  We do know rates are likely to be volatile into the future.  Now is a great time to take advantage of rates near historic lows and reduce the uncertainty of a future purchase or refinance.


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.