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Market
Comment
Mortgage bond prices finished the week near unchanged which held rates steady. Trading was a little choppier but remained within a very narrow range. Rates worsened the beginning of the week but recovered the losses Wednesday and Thursday. The Fed cut rates 25 basis points as expected but noted, “Uncertainty about the economic outlook remains elevated.” The data showed very little price pressures and moderate economic growth. Q3 Employment Cost Index rose 0.8% vs 0.9%. Weekly jobless claims were 236K vs 220K. The trade deficit was $52.8B vs $63.3B. Mortgage interest rates finished the week with no discount point changes.
LOOKING
AHEAD
|
Economic
Indicator |
Release
Date &
Time |
Consensus
Estimate |
Analysis
|
|
NAHB Housing Index
|
Monday, Dec. 15,
10:00 am, et
|
37
|
Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates.
|
| OCT Retail Sales |
Tuesday, Dec. 16,
8:30 am, et
|
Up 0.2%
|
Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
|
| Employment-OCT/NOV |
Tuesday, Dec. 16,
8:30 am, et
|
4.4%,
Payrolls +35K
|
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
|
| Consumer Price Index |
Thursday, Dec. 18,
8:30 am, et
|
Up 0.2%,
Core up 0.2%
|
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
|
| Philadelphia Fed Survey |
Thursday, Dec. 18,
10:00 am, et
|
45
|
Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
|
| Existing Home Sales |
Friday, Dec. 19,
10:00 am, et
|
3.8M
|
Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
|
| U of Michigan Consumer Sentiment |
Friday, Dec. 19,
10:00 am, et
|
53.3
|
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
|
NAHB Index
The National Association of Home Builders (NAHB) releases the Housing Market Index each month which provides an indication of single family housing market conditions. The results are derived from a survey of NAHB members in which members are asked to rate current market conditions, future market conditions, and prospective buyer traffic. The data is compiled and then a final number between 0 and 100 is released. A reading over 50 is generally considered positive. The data often correlates with the housing starts data. The release this week may provide an early indicator to the housing starts figures later this morning assuming the two reports are in line.
Mortgage interest rates remain stable. The Fed is confident they will eventually get to their 2% inflation goal over the next two years, which would generally put downward pressure on mortgage rates along the way. However, this will take time and there are no guarantees that rates will fall in the short term. Therefore, a cautious approach to float and lock decisions is wise.
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