Our Real Estate Blog

Mortgage Rates (8/13/2010)

August 13th, 2010 10:33 AM by Lehel S.

Friday's bond market has opened in positive territory after this morning's key economic data gave us mixed results. The stock markets are in negative territory again, but only by a few points. The Dow is currently down 7 points while the Nasdaq has lost 9 points. The bond market is currently up 8/32, but due to weakness in bonds late yesterday we will likely see little change in this morning's mortgage rates.

July's Consumer Price Index (CPI) was the first of today's three economic reports. The Labor Department reported that the overall CPI reading rose 0.3% while the core data rose 0.1%. The more important core reading matched forecasts, but the overall reading was slightly stronger than expected. This means that prices at the consumer level of the economy rose slightly last month if volatile food and energy costs are excluded. This can be considered fairly good news for the bond market and mortgage rates because it indicates that inflation remains subdu ed.

The second report of the day was July's Retail Sales data. It showed that retail level sales rose 0.4% last month, falling just short of expectations. This is good news for the bond market because it means that consumers did not spend as much as analysts had expected, which translates into less fuel for economic growth. But it was not enough of a variance to lead to a large rally in bonds or noticeable improvement in mortgage pricing this morning.

The last report of the day was the University of Michigan's Index of Consumer Sentiment for August. It came in at 69.6, exceeding last month's final reading of 67.8 and forecasts of 69.0. That means that consumers were more optimistic about their own financial situations than they were in July. The increase should be considered negative news since it hints that consumers may be more willing to spend in the immediate future. However, this was the least important of today's three reports and did not d iffer enough from forecasts to lead to changes in mortgage rates.

Next week brings us the release of a few reports worth watching, but only one is considered to be highly important. There is no relevant data scheduled for Monday, so we should expect the stock markets to influence bond trading and mortgage rates more than anything else. The relevant data starts Tuesday, which includes another important inflation reading. Look for more details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other bor rowers. 
Posted in:General
Posted by Lehel S. on August 13th, 2010 10:33 AM



My Favorite Blogs:

Sites That Link to This Blog: