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MIG Market Watch, August 31st, 2020

MIG Market Watch, August 31st, 2020


MIG Market Watch, August 31st, 2020

MARKET COMMENT
Mortgage bond prices finished the week lower which put upward pressure on rates. Rates worsened Monday through Wednesday with a slight rebound Thursday and Friday mornings. The Fed continued their MBS purchases, but they only buffered the selling pressure. The data was mixed but some of it showed economic strength. The FHFA house price index rose 0.9% vs the expected 0.2% decline. New home sales were 901K vs 787K. Consumer confidence was 84.8 vs 93. Durable goods orders rose 11.2% vs the expected 4.3% increase. Weekly Jobless claims were 1.006M vs 1.05M. Q2 GDP fell 31.7% vs the expected 32.5% decline. Core PCE inflation rose 0.3% vs 0.5% which was good news Friday morning. Mortgage interest rates finished the week worse by approximately 1/4 to 3/8 of a discount point.

LOOKING AHEAD

Economic Indicator Release Date & Time Consensus Estimate Analysis
ISM Index Tuesday, Sept. 1,
10:00 am, et
54.4 Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
ADP Employment Wednesday, Sept. 2,
8:30 am, et
900K Important. An indication of employment. Weakness may bring lower rates.
Factory Orders Wednesday, Sept. 2,
10:00 am, et
Up 5.5% Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Fed “Beige Book” Wednesday, Sept. 2,
2:00 pm, et
None Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Weekly Jobless Claims Thursday, Sept. 3,
8:30 am, et
1M Important. An indication of employment. Higher claims may result in lower rates.
Q2 Revised Productivity Thursday, Sept. 3,
8:30 am, et
Up 7.1% Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
Employment Friday, Sept. 4,
8:30 am, et
9.8%,
Payrolls +1.4M
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.

FED POLICY REVISION
“Following an extensive review that included numerous public events across the country, the Federal Open Market Committee (FOMC) on Thursday announced the unanimous approval of updates to its Statement on Longer-Run Goals and Monetary Policy Strategy, which articulates its approach to monetary policy and serves as the foundation for its policy actions. The updates reflect changes in the economy over the past decade and how policymakers are taking these changes into account in conducting monetary policy. The updated statement is also intended to enhance the transparency, accountability and effectiveness of monetary policy.”

The most significant component that influences the mortgage-backed securities market was the inflation guideline. “In order to anchor longer-term inflation expectations at this level, the Committee seeks to achieve inflation that averages 2 percent over time, and therefore judges that, following periods when inflation has been running persistently below 2 percent, appropriate monetary policy will likely aim to achieve inflation moderately above 2 percent for some time.”

Analysts debated future ramifications. Chair Powell attempted to provide clarity by stating the change “reflects our view that a robust job market can be sustained without causing an outbreak of inflation.” That could be good news for low rates the remainder of this year.

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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.

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  • Rates are subject to change at any time.
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  • 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