Adam in CO
06-25-2007, 02:40 PM
Sorry for the delay.
Mortgage Market News for the week ending June 22, 2007
Compliments of
CORE Finance
PHONE: 866-423-0564
adam@corefinancegroup.com (adam@corefinancegroup.com)
5310 DTC Pkwy, Suite I
Greenwood Village, CO 80111
Events This Week:
Employment Solid
Inflation Lower
Manufacturing Up
Events Next Week:
Mon 6/25
Existing Home Sales
Tues 6/26
New Home Sales
Wed 6/27
Durable Orders
Thur 6/28
FOMC Meeting
GDP
Fri 6/29
Core PCE
Chicago PMI
Calm Before a Storm?
After rising for much of May and early June, mortgage rates have stabilized somewhat and have ended each of the last two weeks very close to where they started. During the last two weeks, though, there has been a high degree of volatility, as a growing number of buyers battled sellers to determine the appropriate direction for rates. Overall, since the start of the upward trend on May 11, mortgage rates have risen more than one half-point. Higher expectations for economic growth around the world, and the resulting potential for an increase in inflation, were the primary cause of the upward movement in mortgage rates.
While there was little economic news last week, a flood of significant economic announcements next week may shake mortgage markets up again, especially with a Fed meeting on the schedule. Fed policy is a major factor in determining mortgage rates, and investors' perception of what the Fed will do is key to their decisions. Since the start of the year, the change in expectations for future Fed action has been dramatic. In January, investors were pricing in a high likelihood of a rate cut by next Thursday's Fed meeting, but now, any change in rates by the Fed during 2007 would be a big surprise. In any case, the Fed's statement will be carefully scrutinized for clues about future policy.
In the housing sector, the National Association of Home Builders (NAHB) released two reports last week. In the first, the NAHB forecasted that new home starts will bottom out later this year and then increase in 2008. "Slack" home buyer demand has forced builders to slow the pace of new construction, according the chief economist of the NAHB. Separately, the NAHB index of home builder confidence slipped to its lowest level since 1991. The primary concerns of home builders were tighter lending standards in the subprime market and the recent rise in mortgage rates.
Also Notable:
Housing Starts matched the consensus forecast in May, at a rate of 1.47 million annual units
More than $1 trillion in Adjustable Rate Mortgages may reset in 2007, according to Mortgage Bankers Assoc. estimates
Hedge funds run by major Wall Street firms were reported to be selling large quantities of subprime mortgage securities
The Dow Jones equity index fell almost 300 points, from near record levels
Average 30 yr fixed rate:
Last week:+0.02%
This week:-0.01%
Stocks (weekly):
Dow:13,406-281
NASDAQ:2.592-32
Week Ahead
A busy week ahead will be highlighted by Thursday's Fed meeting. No change in rates is expected, but the Fed's statement is one of the most highly anticipated pieces of economic news. In addition, important economic data will come out every day next week, beginning with the Existing and New Home Sales reports on Monday and Tuesday. Wednesday's Durable Orders report will provide an indication of the level of economic activity. The final revision to Gross Domestic Product, the broadest measure of economic activity, for the first quarter of 2007 is scheduled for Thursday. The week will conclude on a high note as well. The Core PCE price index, the Fed's preferred inflation indicator, will be one of Friday's releases. It has been trending lower in recent months, and the consensus is that it will drop below 2.0%, a key threshold. Separately, after a couple of very strong regional readings, the Chicago PMI national manufacturing index may show gains. Personal Income, Construction Spending, and Consumer Sentiment also appear on Friday's schedule.
Mortgage Market News for the week ending June 22, 2007
Compliments of
CORE Finance
PHONE: 866-423-0564
adam@corefinancegroup.com (adam@corefinancegroup.com)
5310 DTC Pkwy, Suite I
Greenwood Village, CO 80111
Events This Week:
Employment Solid
Inflation Lower
Manufacturing Up
Events Next Week:
Mon 6/25
Existing Home Sales
Tues 6/26
New Home Sales
Wed 6/27
Durable Orders
Thur 6/28
FOMC Meeting
GDP
Fri 6/29
Core PCE
Chicago PMI
Calm Before a Storm?
After rising for much of May and early June, mortgage rates have stabilized somewhat and have ended each of the last two weeks very close to where they started. During the last two weeks, though, there has been a high degree of volatility, as a growing number of buyers battled sellers to determine the appropriate direction for rates. Overall, since the start of the upward trend on May 11, mortgage rates have risen more than one half-point. Higher expectations for economic growth around the world, and the resulting potential for an increase in inflation, were the primary cause of the upward movement in mortgage rates.
While there was little economic news last week, a flood of significant economic announcements next week may shake mortgage markets up again, especially with a Fed meeting on the schedule. Fed policy is a major factor in determining mortgage rates, and investors' perception of what the Fed will do is key to their decisions. Since the start of the year, the change in expectations for future Fed action has been dramatic. In January, investors were pricing in a high likelihood of a rate cut by next Thursday's Fed meeting, but now, any change in rates by the Fed during 2007 would be a big surprise. In any case, the Fed's statement will be carefully scrutinized for clues about future policy.
In the housing sector, the National Association of Home Builders (NAHB) released two reports last week. In the first, the NAHB forecasted that new home starts will bottom out later this year and then increase in 2008. "Slack" home buyer demand has forced builders to slow the pace of new construction, according the chief economist of the NAHB. Separately, the NAHB index of home builder confidence slipped to its lowest level since 1991. The primary concerns of home builders were tighter lending standards in the subprime market and the recent rise in mortgage rates.
Also Notable:
Housing Starts matched the consensus forecast in May, at a rate of 1.47 million annual units
More than $1 trillion in Adjustable Rate Mortgages may reset in 2007, according to Mortgage Bankers Assoc. estimates
Hedge funds run by major Wall Street firms were reported to be selling large quantities of subprime mortgage securities
The Dow Jones equity index fell almost 300 points, from near record levels
Average 30 yr fixed rate:
Last week:+0.02%
This week:-0.01%
Stocks (weekly):
Dow:13,406-281
NASDAQ:2.592-32
Week Ahead
A busy week ahead will be highlighted by Thursday's Fed meeting. No change in rates is expected, but the Fed's statement is one of the most highly anticipated pieces of economic news. In addition, important economic data will come out every day next week, beginning with the Existing and New Home Sales reports on Monday and Tuesday. Wednesday's Durable Orders report will provide an indication of the level of economic activity. The final revision to Gross Domestic Product, the broadest measure of economic activity, for the first quarter of 2007 is scheduled for Thursday. The week will conclude on a high note as well. The Core PCE price index, the Fed's preferred inflation indicator, will be one of Friday's releases. It has been trending lower in recent months, and the consensus is that it will drop below 2.0%, a key threshold. Separately, after a couple of very strong regional readings, the Chicago PMI national manufacturing index may show gains. Personal Income, Construction Spending, and Consumer Sentiment also appear on Friday's schedule.