The first of this week's seven relevant economic reports comes late tomorrow morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation concerns to a minimum. But, a sizable increase could hurt the bond market, pushing mortgage rates higher tomorrow. It is expected to show a reading of 28.8, which would be an increase from March's 26.0 reading.
Wednesday brings us the release of a very important report along with the FOMC meeting results. The report is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets Wednesday and therefore the mortgage market also. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates Wednesday morning.
This week's FOMC meeting will begin on Tuesday but will not adjourn until Wednesday afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement.
Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday will likely be the most important day of the week with the GDP being posted along with the FOMC adjournment, but we may see noticeable changes to rates tomorrow and Friday also. If this week's reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.
Monday, April 27, 2009
Tuesday, April 21, 2009
How to Get a FREE Appraisal and Credit Report on Your Next Transaction
I have had the opportunity to help buyers and homeowners with their appraisal and credit report fees. Appraisal reports can cost anywhere from $350. to $500. (depends on size and usage of property). Credit Reports can cost anywhere from $30. to $60. (depends on number of borrowers on loan).
I can pay for the appraisal and credit report fee, however the appraisal fee will have to be paid upfront by borrower and I will reimburse the fee at closing. It's that simple.
If you want to hear more about it or have other questions:
I can pay for the appraisal and credit report fee, however the appraisal fee will have to be paid upfront by borrower and I will reimburse the fee at closing. It's that simple.
If you want to hear more about it or have other questions:
- How can I buy a home with a low down payment?
- How can I find a good REO agent with foreclosed homes?
- Can I use my parents as co-signers?
Just call me at (310)963-8315.
Sunday, April 19, 2009
This Week's Economic News
This week is fairly light in terms of economic news scheduled for release. There are four reports scheduled, but only one of them is likely to cause much movement in mortgage rates. Accordingly, there is a fairly decent possibility of seeing a fairly calm week in the mortgage market, assuming that the stock markets do the same.
The week's first data comes tomorrow morning when the Conference Board will release their Leading Economic Indicators (LEI) for March. This data attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market may fall and mortgage rates could rise. If it shows a weaker than expected reading, the bond market may move higher and mortgage rates should improve slightly. This is considered to be a moderately important report, so we may see a slight movement in rates as a result of this report. It is expected to show a decline of 0.3%.
There is no relevant data scheduled for release Tuesday or Wednesday. The National Association of Realtors will post March's Existing Homes Sales numbers Thursday morning, which are expected to show a drop from February. A similar report to this one and actually the week's least important data- March's New Home Sales will be released Friday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts' forecasts, I don't think they will cause much movement in mortgage rates.
March's Durable Goods Orders will also be posted Friday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates Friday.
Overall, look for Friday to be the most important day of the week with the Durable Goods report being posted. The rest of the week will likely be heavily influenced by the stock markets. If the major stock indexes rally, bonds will likely suffer and mortgage rates will move higher. If stocks fall for the week, we could see mortgage rates move lower the next few days.
The week's first data comes tomorrow morning when the Conference Board will release their Leading Economic Indicators (LEI) for March. This data attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market may fall and mortgage rates could rise. If it shows a weaker than expected reading, the bond market may move higher and mortgage rates should improve slightly. This is considered to be a moderately important report, so we may see a slight movement in rates as a result of this report. It is expected to show a decline of 0.3%.
There is no relevant data scheduled for release Tuesday or Wednesday. The National Association of Realtors will post March's Existing Homes Sales numbers Thursday morning, which are expected to show a drop from February. A similar report to this one and actually the week's least important data- March's New Home Sales will be released Friday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts' forecasts, I don't think they will cause much movement in mortgage rates.
March's Durable Goods Orders will also be posted Friday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates Friday.
Overall, look for Friday to be the most important day of the week with the Durable Goods report being posted. The rest of the week will likely be heavily influenced by the stock markets. If the major stock indexes rally, bonds will likely suffer and mortgage rates will move higher. If stocks fall for the week, we could see mortgage rates move lower the next few days.
Sunday, April 12, 2009
This Week's Economic News
This week brings us the release of seven relevant economic reports for the bond market to digest. We are also heading into corporate earnings season, which could lead to fluctuations in the stock markets. If earnings come in lighter than estimates, the stock markets may fall, leading to an influx of funds into bonds. But, if earnings and forecasts are strong, the major stock indexes may rally, pulling funds from bonds and leading to higher mortgage rates.
There is no relevant economic news scheduled for release Monday. The first important report comes early Tuesday morning when the Commerce Department will release March's Retail Sales data. This piece of data gives us a measurement of consumer spending, which is very important because consumer spending makes up two-thirds of the U.S. economy. Current forecasts call for a 0.3% increase in sales last month. If we see a larger increase in spending, the bond market will probably fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower Tuesday.
The Labor Department will post March's Producer Price Index (PPI) early Tuesday morning also, giving us an important measurement of inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, inflation fears may hurt bond prices, leading to higher mortgage rates Tuesday morning. However, a small increase, or better yet a decline in prices, would be good news for the bond market and mortgage rates. Current forecasts are calling for no change in the overall reading and a 0.1% rise in the core data.
There are three pieces of news scheduled for release Wednesday. The first is the sister report of the PPI. March's Consumer Price Index (CPI) will be released early Wednesday morning. This index is very similar to Tuesday's PPI, but tracks prices at the more important consumer level of the economy. This is one of the most important pieces of data we see each month, so stronger than expected readings will undoubtedly lead to higher mortgage rates. Current forecasts are calling for an increase of 0.2% in the overall index and 0.1% in the core data.
The second is March's Industrial Production report at 9:15 AM ET. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for a decline in production of 0.9%. Since signs of a weakening economy are considered favorable to bonds and therefore mortgage rates, a larger decline would be good news for mortgage pricing. However, the CPI is by far the most important data of the day.
The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET Wednesday. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises.
March's Housing Starts report is Thursday's sole report, but it will most likely be a non-factor in the market. It gives us a measurement of housing sector strength and mortgage credit demand, however, usually doesn't cause much movement in mortgage pricing unless it varies greatly from forecasts. It is this week's least important report.
The final release of the week is the University of Michigan's Index of Consumer Sentiment at 9:45 AM ET Friday. Their consumer sentiment index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a decline from March's 57.3 reading. Current forecasts are calling for a reading of approximately 58.5.
Overall, look for the most movement in rates the middle part of the week. The Retail Sales, PPI and CPI reports are the biggest names on the agenda. Any of the three can cause significant movement in the markets and mortgage rates. Fed Chairman Bernanke is expected to speak at a Kansas City banker's conference mid-day Friday, but I don't think his words will influence trading or mortgage rates. Regardless, we have a very active week ahead of us so please proceed cautiously if still floating an interest rate.
There is no relevant economic news scheduled for release Monday. The first important report comes early Tuesday morning when the Commerce Department will release March's Retail Sales data. This piece of data gives us a measurement of consumer spending, which is very important because consumer spending makes up two-thirds of the U.S. economy. Current forecasts call for a 0.3% increase in sales last month. If we see a larger increase in spending, the bond market will probably fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower Tuesday.
The Labor Department will post March's Producer Price Index (PPI) early Tuesday morning also, giving us an important measurement of inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, inflation fears may hurt bond prices, leading to higher mortgage rates Tuesday morning. However, a small increase, or better yet a decline in prices, would be good news for the bond market and mortgage rates. Current forecasts are calling for no change in the overall reading and a 0.1% rise in the core data.
There are three pieces of news scheduled for release Wednesday. The first is the sister report of the PPI. March's Consumer Price Index (CPI) will be released early Wednesday morning. This index is very similar to Tuesday's PPI, but tracks prices at the more important consumer level of the economy. This is one of the most important pieces of data we see each month, so stronger than expected readings will undoubtedly lead to higher mortgage rates. Current forecasts are calling for an increase of 0.2% in the overall index and 0.1% in the core data.
The second is March's Industrial Production report at 9:15 AM ET. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for a decline in production of 0.9%. Since signs of a weakening economy are considered favorable to bonds and therefore mortgage rates, a larger decline would be good news for mortgage pricing. However, the CPI is by far the most important data of the day.
The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET Wednesday. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises.
March's Housing Starts report is Thursday's sole report, but it will most likely be a non-factor in the market. It gives us a measurement of housing sector strength and mortgage credit demand, however, usually doesn't cause much movement in mortgage pricing unless it varies greatly from forecasts. It is this week's least important report.
The final release of the week is the University of Michigan's Index of Consumer Sentiment at 9:45 AM ET Friday. Their consumer sentiment index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a decline from March's 57.3 reading. Current forecasts are calling for a reading of approximately 58.5.
Overall, look for the most movement in rates the middle part of the week. The Retail Sales, PPI and CPI reports are the biggest names on the agenda. Any of the three can cause significant movement in the markets and mortgage rates. Fed Chairman Bernanke is expected to speak at a Kansas City banker's conference mid-day Friday, but I don't think his words will influence trading or mortgage rates. Regardless, we have a very active week ahead of us so please proceed cautiously if still floating an interest rate.
Saturday, April 11, 2009
What is FHA?
What is the Federal Housing Administration?
What is FHA Mortgage Insurance?
Why does FHA Mortgage Insurance exist?
How is FHA funded?
Click here for the answers to these questions
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