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MIG Market Watch, September 16th, 2019

MIG Market Watch, September 16th, 2019


MIG Market Watch, September 16th, 2019

MARKET COMMENT

Mortgage bond prices finished the week sharply lower which put upward pressure on rates. There was little data the beginning of the week and negative trading emerged from reports that some US/China trade tariffs would be temporarily delayed. The European Central Bank also cut rates which resulted in MBS volatility. Core inflation readings on both the consumer and producer sides caused concern. Core PPI rose 0.3% versus an expected 0.1% increase and core CPI rose 0.3% versus an expected 0.2% increase. Weekly jobless claims were 204K. Analysts looked for a reading of 215K. Retail sales rose 0.4% versus the expected 0.2% increase. Consumer sentiment was a stronger than expected 92.0. Mortgage interest rates finished the week worse by almost a full discount point.

LOOKING AHEAD

Economic Indicator Release Date & Time Consensus Estimate Analysis
Industrial Production Tuesday, Sept. 17,
9:15 am, et
Down 0.3% Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Capacity Utilization Tuesday, Sept. 17,
9:15 am, et
77.8% Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates.
NAHB Housing Index Tuesday, Sept. 17,
10:00 am, et
67 Moderately Important. A measure of single family housing. Weakness may lead to lower mortgage rates.
Housing Starts Wednesday, Sept. 18,
8:30 am, et
1195K Important. A measure of housing sector strength. Weakness may lead to lower rates.
Fed Meeting Adjourns Wednesday, Sept. 18,
2:15 pm, et
25 basis point cut Important. Most expect the Fed to change rates. Volatility may surround the adjournment of this meeting.
Weekly Jobless Claims Thursday, Sept. 19,
8:30 am, et
214K Important. An indication of employment. Higher claims may result in lower rates.
Philadelphia Fed Survey Thursday, Sept. 19,
10:00 am, et
16 Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Leading Economic Indicators Thursday, Sept. 19,
10:00 am, et
Up 0.3% Important. An indication of future economic activity. A smaller increase may lead to lower rates.

 

Volatility Returns

Volatility in mortgage-backed securities, the debt instruments that dictate mortgage interest rates, rose considerably last week after a considerable time of continuously falling rates. We saw moves of at least 1/4 of a discount point ($500 on a $200K loan) every day of trading last week. Unfortunately, most of those moves were negative which cumulatively left rates sharply higher for the week.

Many lobby the Fed to follow their counterparts across the globe and reduce rates considerably more than they already have. The challenge the Fed faces is that a lot of the data continues to show strength and now there are higher than expected inflation readings to deal with. The latest CPI figure was the highest in 11 years. The last thing the Fed wants to do is cut rates and spur additional inflationary pressures. While the Fed is expected to cut rates this week a more aggressive future of continual rate cuts is less certain. The fact remains that the Fed will be data dependent as they continually state. Economic releases could shake things up as we saw last week. Floating in this environment is very risky.

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Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at migonline.com Legal Information.

MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:

  • Rates are subject to change at any time.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
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An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020