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MIG Market Watch, March 2nd, 2020

MIG Market Watch, March 2nd, 2020


MIG Market Watch, March 2nd, 2020

MARKET COMMENT
Mortgage bond prices finished the week higher which put downward pressure on rates. Most of the improvements came as stocks got crushed. Stocks experienced some of the worst losses ever with a decrease of 1191 points in the DOW Thursday alone. This was one of the rare times when the data was completely overshadowed by news headlines. Global stock losses were in the trillions of dollars for the past 30 days. The FHFA House Price Index rose 0.6% versus the expected 0.3% increase. Consumer confidence was lower than expected at 130.7 vs 132. New home sales were a solid 764K. Analysts looked for a reading of 720K. Durable goods orders fell 0.2% vs a 1.6% decline. Core PCE inflation rose 0.1% vs the expected 0.2% increase. Revised Q4 Gross Domestic Product rose 2.1%. Analysts looked for a reading of 2.2%. Mortgage interest rates finished the week better by 3/8 of a discount point.

LOOKING AHEAD

Economic Indicator Release Date & Time Consensus Estimate Analysis
Construction Spending Monday, March 2,
10:00 am, et
Up 0.4% Low importance. An indication of economic strength. Significant weakness may lead to lower rates.
ISM Index Monday, March 2,
10:00 am, et
50.5 Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
ADP Employment Wednesday, March 4,
8:30 am, et
192K Important. An indication of employment. Weakness may bring lower rates.
Weekly Jobless Claims Thursday, March 5,
8:30 am, et
205K Important. An indication of employment. Higher claims may result in lower rates.
Revised Q4 Productivity Thursday, March 5,
8:30 am, et
Up 1.4% Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
Factory Orders Thursday, March 5,
10:00 am, et
Down 0.2% Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Employment Friday, March 6,
8:30 am, et
3.6%,
Payrolls +180K
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.

UNCERTAINTIES
Recent headlines weigh heavily on economies around the globe. The coronavirus, COVID-19, has stocks plummeting almost everywhere. Travel bans, quarantines, hospitalizations, and more have investors and consumers very concerned. Global trade has already been impacted but continued production delays have large and small companies very worried. Apple already indicated production delays will impact product availability and many small companies are beginning to lay off employees.

Mortgage-backed securities often benefit when these types of stories hit the press. Fear, real or perceived, is a strong emotion. Investors run for safety, MBS prices rise, and mortgage interest rates fall. We have seen a lot of this flight to safety buying historically. Recently US Treasuries saw more improvement than MBSs but they both experienced higher prices and lower yields last week. The uncertain part is when those defensive trading positions unwind. In those instances, mortgage rates go from a lull to wild spikes and dips from minute to minute on some trading days.

Time will tell if the recent increase in stock volatility will continue. The safe thing to do is to take advantage of mortgage interest rates when they dip to very low levels as we’ve seen lately.

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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