Mortgage Rate Lock advisory for New York or Florida Mortgages for the week of October 24, 2011

By
Mortgage and Lending with Bob Amato of Empire Home Mortgage Inc

If you are looking for a Mortgage Professional who will give you the type of service that you deserve, contact Bob Amato (NMLS # 8632) and Empire Home Mortgage Inc. (NMLS # 44882). We answer our phones seven days a week until 9PM. Put us to the test! Our toll free number is (866) 742-5227.

 Visit our website, www.empirehomemortgageinc.com . There you can get answers to all of your financing questions, view rates and search for foreclosed properties.

 If you are considering locking in an interest rate for a New York mortgage or a Florida mortgage, read this post.

 This week brings us the release of seven economic reports and two relevant Treasury auctions for the bond market to digest. There is nothing of importance scheduled for release today, but we do have something to watch every other day. The data ranges from low importance to extremely important. We also need to keep an eye on the stock markets as they have been heavily influential on bond market direction recently. In other words, there is a pretty good chance of seeing noticeable movement in mortgage rates several days this week, especially if the major stock indexes rally or post sizable losses.

 October's Consumer Confidence Index (CCI) is the first release of the week and Tuesday's only news. As long as the reading doesn't exceed the forecasted 46.0, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

 Early Wednesday morning, the Commerce Department will post Durable Goods Orders for September. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. Analysts are currently calling for a decline in new orders of approximately 1.0%. If we see an unexpected increase in orders, mortgage rates will probably rise as bond prices fall. A weaker than expected reading should be good news for the bond market and mortgage rates.

 Also Wednesday is the release of September's New Home Sales. This data covers the remaining 15% of home sales that last week's Existing Home Sales report didn’t include and is this week's least important data. It is expected to show an increase in sales of newly constructed homes, but regardless of its results I am not expecting it to have a significant impact on mortgage rates Wednesday.

 Thursday’s only monthly or quarterly data is not only the most important report of the week, but also the most important we see regularly. The preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) will be released early Thursday morning.

 There are three reports scheduled for release Friday that may affect mortgage rates. The first comes at 8:30 AM ET when September's Personal Income and Outlays report will be posted. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see a 0.3% increase in income and a 0.6% rise in spending. Smaller than expected increases in both readings would be good news for the bond market and mortgage pricing.

 The second report of the day is the 3rd Quarter Employment Cost Index (ECI). This data tracks employer costs for salaries and benefits, giving us an indication of wage inflation pressures. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.6%. A smaller than expected increase would be good news for mortgage rates.

 The week's last report comes Friday when the University of Michigan updates their Index of Consumer Sentiment for this month. Current forecasts show this index remaining nearly unchanged from the preliminary reading of 57.5. As with Tuesday’s CCI release, the lower the reading, the better the news for mortgage shoppers.

 This week also has Treasury auctions scheduled each day except Friday. The only two that are likely to influence mortgage rates are Wednesday's 5-year and Thursday's 7-year Note sales. If those sales are met with a strong demand, particularly Thursday's auction, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor interest may create selling in the broader bond market and lead to upward revisions to mortgage rates.

 Overall, it will likely be an active week for the markets and mortgage rates. I believe that the single most important day will probably end up being Thursday with the extremely important GDP release in the morning and the 7-year Treasury Note auction in the afternoon, but Friday has three reports scheduled so it is expected to be active also. Tomorrow is likely to be the least important day, but we still could see some movement in rates as the markets prepare for the upcoming week. Accordingly, I strongly recommend maintaining contact with your mortgage professional this week, especially if still floating an interest rate.

 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 borrowers.

 Empire Home Mortgage Inc. is a registered Mortgage Broker with the New York and Florida State Banking Departments and our loans are arranged through third party providers.

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