MIG Market Watch, March 22nd 2021

MIG Market Watch, March 22nd 2021

MIG Market Watch, March 22nd 2021
Market Comment

Mortgage bond prices finished the week significantly lower which put upward pressure on rates. Rates worsened most days with some slight respites Wednesday afternoon and Thursday afternoon. The fear of inflation dominated trading. The Fed left rates unchanged and signaled no planned rate changes until well past 2023. Investors fear they are content with inflation pushing higher for a bit while their focus is spurring economic activity. Inflation, real or perceived, erodes the value of fixed income investments such as mortgage-backed securities. This causes prices to fall and rates to rise. Retail sales fell 3% vs 0.5%. Industrial production fell 2.2% vs the expected 0.7% increase. Capacity use was 73.8% vs 76.0%. NAHB housing data was 82 vs 83. Weekly jobless claims were 770K vs 700K. The Philadelphia Fed business conditions index was 61.6 vs 39.5. Leading economic indicators rose 0.2% vs 0.3%. Mortgage interest rates finished the week worse by approximately 5/8 of a discount point.

Looking Ahead
Economic Indicator Release Date & Time Consensus Estimate Analysis
Existing Home Sales Monday, March 22,
10:00 am, et
6.51M Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
New Home Sales Tuesday, March 23,
10:00 am, et
875K Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
Durable Goods Orders Wednesday, March 24,
8:30 am, et
Up 1.2% Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
Q4 GDP Thursday, March 25,
8:30 am, et
Up 4.1% Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Trade Data Friday, March 26,
8:30 am, et
$84.5B deficit Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
Personal Income and Outlays Friday, March 26,
8:30 am, et
Down 0.6%,
Up 0.1%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
PCE Core Inflation Friday, March 26,
8:30 am, et
Up 0.2% Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
U of Michigan Consumer Sentiment Friday, March 26,
10:00 am, et
83.0 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Mortgage Rates Volatile

Mortgage interest rates continued to fluctuate wildly with major spikes higher last week despite the continued Fed multi-billion-dollar daily MBS purchases. Economic recovery, stimulus spending, and inflation fears pressured rates higher.

The core challenge investors and the financial markets face is pricing anything in this environment. Risk models that worked during periods of stability do not necessarily return an accurate picture of risks during a global viral pandemic. For example, what is the value of a hotel chain if few customers are traveling? In the case of a stock the value would plummet as the risk increased. The same is true for mortgage- backed securities (the bonds the dictate mortgage interest rate pricing.) What is the value if the performance of the investment could be in question? Will an MBS perform in the future like it has historically? The point is that the MBS market is subject to all the current uncertainty that has struck every facet of life and business. Be very cautious in these volatile times.


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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 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