Mortgage Newsletter- October 29th, 2012 Dana Bain Premiere Mortgage 978-422-2311

By
Mortgage and Lending with Premiere Mortgage Services Inc. MLO 18693

http://www.bainmortgage.com/MortgageMarketWeekInReview

Newsletter-October 29th, 2012
Provided by
Dana Bain & Robin Dunbar Bain

Dana Bain
Premiere Mortgage Services

www.BainMortgage.com

11 Malvern Hill Road
Sterling, MA 01564
Phone: (978) 422-2311
Fax: (978) 422-2313
E-Mail: dana@bainmortgage.com

 
 
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Market Comment

Mortgage bond prices finished the week lower, which pushed rates higher.Rates started moving slightly lower early in the week as news out of the euro zone indicated Moody’s downgraded five Spanish regions and the entire nation’s gross domestic product.Stronger than expected data midweek reversed the earlier improvements.New home sales came in at 389k versus the expected 385k mark.Weekly jobless claims were better than expected.Britain’s GDP rose 1%, which officially marked the end to their recession.Analysts did attribute the jump to the economic influx of the Olympics.U.S. Mortgage interest rates finished the week worse by about 1/4 of a discount point.

LOOKING AHEAD

Economic
Indicator

Release
Date & Time

Consensus
Estimate


Analysis

Personal Income and Outlays

Monday, Oct. 29,
8:30 am, et

Up 0.1%,
Up 0.3%

Important.A measure of consumers’ ability to spend.Weakness may lead to lower mortgage rates.
PCE Core Inflation

Monday, Oct. 29,
8:30 am, et

Up 0.1% Important.A measure of price increases for all domestic personal consumption.Weaker figure may help rates improve.
Consumer Confidence

Tuesday, Oct. 30,
10:00 am, et

69.8 Important.An indication of consumers’ willingness to spend.Weakness may lead to lower mortgage rates.
ADP Employment

Wednesday, Oct. 31,
8:30 am, et

157k Important.An indication of employment.Weakness may bring lower rates.
Q3 Employment Cost Index

Wednesday, Oct. 31,
8:30 am, et

Up 0.3% Very important. A measure of wage inflation.Weakness may lead to lower rates.
Weekly Jobless Claims

Thursday, Nov. 1,
8:30 am, et

367k Important.An indication of employment.Higher claims may result in lower rates.
Preliminary Q3 Productivity

Thursday, Nov. 1,
8:30 am, et

Up 1.6% Important.A measure of output per hour.Improvement may lead to lower mortgage rates.
ISM Index Thursday, Nov. 1,
10:00 am, et
51.4 Important.A measure of manufacturer sentiment.Weakness may lead to lower mortgage rates.
Employment

Friday, Nov. 2,
8:30 am, et

7.8%,
Payrolls +108k

Very important.An increase in unemployment or weakness in payrolls may bring lower rates.
Factory Orders

Friday, Nov. 2,
10:00 am, et

Down 0.3% Important.A measure of manufacturing sector strength.Weakness may lead to lower rates.

Are Rate Hikes Coming?

The biggest fear of bondholders is inflation.Real or perceived, inflation erodes the value of fixed income securities causing prices fall and rates to rise.The last thing the struggling housing sector of the economy needs is escalating mortgage interest rates.Unfortunately the recent higher than expected consumer price index figure, stronger than expected data, and noted inflation concerns from some Fed members have mortgage interest rates higher.The Fed is desperately trying to keep rates in check by purchasing $40b of mortgage-backed securities per month.Their efforts have been less effective as of late as rates have shown increases.While it is almost inevitable that the Fed will eventually raise rates, the question still remains when that process will actually start.Most analysts predict some time in 2015 but that is all subject to revision.Many traders took the recent data as a warning of things to come sooner rather than later.Despite the recent rate increases rates remain historically very favorable.Lower rates are not guaranteed.Floating has risk.



 

 
 
 
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