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MIG Market Watch, December 30th, 2019

MIG Market Watch, December 30th, 2019


MIG Market Watch, December 30th, 2019

MARKET COMMENT
Mortgage bond prices finished the week higher which put slight downward pressure on rates. Rates fell Monday morning to start the week on a positive tone. Durable goods orders fell 2% versus the expected 1.4% decline. New home sales data was also worse than expected. Sales rose 719K versus the expected 735K increase. We reversed course Tuesday morning as stocks remained solid. The slight negative movement erased the Monday improvements. The Treasury auctions were mixed. The 2Y showed weaker foreign demand early in the week, the 5Y was solid Tuesday afternoon, and the 7Y was near average. Weekly jobless claims printed at 222K and continuing claims, a summation of all receiving benefits, at 1,719K. Traders expected claims at 224K and continuing claims at 1,722K. Mortgage interest rates finished the week better by approximately 1/8 to 1/4 of a discount point.

LOOKING AHEAD

Economic Indicator Release Date & Time Consensus Estimate Analysis
FHFA House Price Index Tuesday, Dec. 31,
10:00 am, et
Up 0.7% Moderately Important.  A measure of single-family house prices.  Weakness may lead to lower rates.
Consumer Confidence Tuesday, Dec. 31,
10:00 am, et
126 Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.
Weekly Jobless Claims Thursday, Jan. 2,
8:30 am, et
205K Important.  An indication of employment.   Higher claims may result in lower rates.
ISM Index Thursday, Jan. 2,
10:00 am, et
48.5 Important.  A measure of manufacturer sentiment.  Weakness may lead to lower mortgage rates.
Construction Spending Friday, Jan. 3,
10:00 am, et
Down 0.8% Low importance.  An indication of economic strength.  Significant weakness may lead to lower rates.

THE YEAR AHEAD
The future of the economy will continue to be debated. There is no certainty in predictions but the recent data, Fed statements, and Fed action clearly signal continued signs of improvement. The biggest concern recently has been the extreme stock strength. Stocks extended record highs and some analysts anticipate additional surges in the months ahead. However, the possibility for bumps along the way are real. Trade tensions between the US and China are expected to simmer as the most recent announcements indicate Phase 1 of the trade deal agreed to this month will be signed the first week of January. The UK’s exit from the European Union is also anticipated.

Recent analysis of Fed statements and projections favor no rate changes the first few months of the year but not all analysts are convinced things will remain rosy. Former Fed Chair Greenspan indicated inflation will “inevitably rise” and he isn’t alone in this thinking.

The positive for us is that the Fed is clear that they want to keep rates low for now. Their most recent statement indicated “Information received since the Federal Open Market Committee met in October indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.”

The Fed is clear that they will adjust policy considering “incoming information for the economic outlook, including global developments and muted inflation pressures.”

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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.
  • Payments will vary based on program selection, current rates, property location, etc.
  • Not all programs are available in all states.
  • Some loan programs may not be available to first time home buyers.
  • Terms and conditions apply, which may include restrictions or limits per loan program.
  • Information is generally based on primary residence occupancy with no cash out when refinancing.
  • Unless otherwise stated, terms shown are estimates based in part on credit score of 700 or higher; owner occupancy, escrow account is established for taxes and insurance(s); debt-to-income ratio no higher than 43.0%; PMI applies to conventional loan programs over 80.0% LTV; VA,FHA & RD require insuring fees included in loan and/or payment; fixed rate, 30 year term.

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