20
Nov
By Fred Gruber
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 20, 2023

With the release of the CPI and PPI data, much of the broader market has been anticipating the potential cooling of inflation numbers month-to-month and those expectations have been met. There’s a consistent trend of inflation slowing down which brings a greater potential for the end of any rate hikes from the Federal Reserve, signaling a soft-landing for the economy which has been touted by Jerome Powell. With a soft landing, it does also signal a strong potential for the Federal Reserve to begin lowering rates in the coming future. 

Consumer Price Index

Despite the report beating inflation expectations and leading to optimistic outcomes for a future soft-landing for the economy, there is still plenty to be cautious about with the reports also signaling the largest reduction was due to the price of gasoline declining significantly from the prior month. The overall cost of living has remained stable and not increased, but there is still plenty to look out for with the coming reports.

  •  The consumer price index was flat in October from the previous month but increased 3.2% from a year ago.
  •   Excluding volatile food and energy prices, the core CPI rose 0.2% and 4%, against the forecast of 0.3% and 4.1%. The annual rate was the smallest increase since September 2021.
  • The flat reading on the headline CPI came as energy prices declined 2.5% for the month, offsetting a 0.3% increase in the food index.

Producer Price Index
The Producer Price Index for final demand fell 0.5 percent in October, seasonally adjusted, after advancing 0.4 percent in September, the U.S. Bureau of Labor Statistics reported today. (See Table A). The October decline is the largest decrease in final demand prices since a 1.2-percent drop in April 2020. On an unadjusted basis, the index for final demand rose 1.3 percent for the 12 months ended in October.

Primary Mortgage Market Survey Index
The last 3 weeks have seen a week-to-week decline in rates.

  •     15-Yr FRM rates seeing a week-to-week decrease by -0.05% with the current rate at 6.76%.
  •     30-Yr FRM rates seeing a week-to-week decrease by -0.06% with the current rate at 7.44%

MND Rate Index

  •    30-Yr FHA rates increased week to week seeing a -0.21% increase for this week. Current rates at 6.70%
  •   30-Yr VA  rates increased week to week seeing a -0.02% increase for this week. Current rates at 6.72%

Jobless Claims
Weekly jobless claims have exceeded expectations this week, with it showing a slight uptrend. Initial Claims have increased to 231,000 compared to the expected claims of 220,000. The prior week was 218,000. 

What’s Ahead
Thanksgiving week, being next week will see a reduction in the data release schedule. The largest ones will be U.S. leading economic indicator reports, with the usual initial jobless claims, and lastly the final consumer sentiment report for the quarter.

12
Nov
By Fred Gruber
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 13, 2023

The week following the FOMC rate decision meetings are typically very light, with the two most influential releases being the University of Michigan Consumer Sentiment and the weekly Job Claims reports. The more positive news is mortgage lending rates have been on the decline in the last two weeks.

Consumer Credit Reports

Consumer sentiment fell in November for the fourth month in a row due to tensions with the Middle East and there is lingering hawkishness from the Federal Reserve, which could spell continued rate hikes in the future.

The preliminary reading of the sentiment survey declined to 60.4 from 63.8 in October, the University of Michigan said Friday, making it the weakest reading since May.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates seeing a week-to-week decrease by -0.22% with the current rate at 6.81%.
  • 30-Yr FRM rates seeing a week-to-week decrease by -0.26% with the current rate at 7.5%

MND Rate Index

  • 30-Yr FHA rates increased week to week seeing a 0.20% increase for this week. Current rates at 6.91%
  • 30-Yr VA rates increased week to week seeing a 0.04% increase for this week. Current rates at 6.74%

Jobless Claims

The weekly jobless claims report from the Labor Department on Thursday also showed unemployment rolls rising to a six-month high.

Initial Claims have decreased to 217,000 compared to the expected claims of 220,000. The prior week was 220,000.

What’s Ahead

The next week will have much bigger market impacting data reports with the releases of CPI and PPI. There will also be a significant amount of the Federal Reserve members speaking throughout the week on rate policy decisions.

06
Nov
By Fred Gruber
0 Comments
Financial Reports

What’s Ahead For Mortgage Rates This Week – November 6, 2023

The most important data of the quarter was released, signaling the direction for many markets and where economic policy may be headed. Jerome Powell as well as other members of the Federal Reserve spoke about the state of economic policy, informing many parties about their decisions to remain hawkish or dovish in their approach. Further rate hikes could tell a story that inflation is not yet under control and the Federal Reserve feels the need to continue these rate hikes, which will have a significant impact on the lending markets as a whole.

FOMC Rate Decision
While Fed Chair Jerome Powell emphasized uncertainty over whether the Fed has tightened enough to bring down inflation, skeptics still believe policymakers have finished hiking rates. Jerome Powell had several opportunities to make his intentions clear about further rate hikes but had passed on most of them. Analysts largely agree that their recent dovish approach is signaling the end of rate hikes.

  • Central bank’s policy rate remains in the 5.25%-5.50% range.
  • The Fed says the economy grew at a ‘strong’ pace in the third quarter.

Key point: Two rate decision meetings without a hike may signal a period in which the economy shows the reduction in inflation the FED has been seeking, and relief in interest rates for lending parties.

Primary Mortgage Market Survey Index

  • 15-Yr FRM rates seeing a week-to-week increase by 00% with the current rate at 7.03%.
  • 30-Yr FRM rates seeing a week-to-week decrease by -0.03% with the current rate at 76%

MND Rate Index

  • 30-Yr FHA rates increased week to week seeing a -0.61% decrease for this week. Current rates at 71%
  • 30-Yr VA rates increased week to week seeing a -0.63% decrease for this week. Current rates at 70%

Nonfarm Payrolls
Nonfarm Payrolls measure the change in the number of people employed during the previous month, excluding the farming industry.

  • Nonfarm payrolls increased by 150,000 for the month, against the consensus forecast for a rise of 170,000. That was a sharp decline from the gain of 297,000 in September.

 Job Claims
The weekly jobless claims report from the Labor Department on Thursday showed unemployment rolls rising to a six-month high.

Initial Claims have increased by 217,000 compared to the expected claims of 214,000. The prior week was 211,000.

ISM Manufacturing Data
ISM Manufacturing Data was released this week, much of it impacting many sectors including manufacturing, home building, and commercial building. The Institute for Supply Management’s manufacturing survey rose to 49.0% last month from 47.8% in August. It was the third straight increase, and the index matched a 10-month high.

  • Production barometer increased 2.5 points to 52.5% and was positive for the second month in a row.
  • The prices index, a measure of inflation, fell 4.6 points to a fairly low 43.8%. Higher oil prices in the future may impact this statistic.
  • The index of new orders rose 2.4 points to 49.2%. So far the auto industry strike has had little impact.

What’s Ahead
We’ll have a relatively light week after the FOMC rate decision meetings and manufacturing release, with the only notable economic reports being Consumer Credit and Wholesale Inventories.