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MIG Market Watch, June 20th, 2022

MIG Market Watch, June 20th, 2022


MIG Market Watch, June 20th, 2022
Market Comment

Mortgage bond prices finished the week lower which put upward pressure on rates. The Fed raised rates 75 basis points and the financial markets remained very volatile. The DOW fell below 30,000 at one point. Traders feared the rate increases needed to stem inflation may force the economy into a recession. Oil prices fell off the highs from the prior week but remained choppy. The data was mixed. Producer prices rose 0.8% vs 1%. The core rose 0.5% vs 0.7%. Housing starts were 1549K vs 1700K. Jobless claims were 229K vs 222K. The Philadelphia Fed index was down 3.3 vs up 3. Industrial production rose 0.2% vs 0.7% while capacity use was 79% vs 79.2%. Mortgage interest rates finished the week worse by approximately 3/8 of as discount point.


Looking Ahead
Economic Indicator Release Date & Time Consensus Estimate Analysis
Juneteenth Monday, June 20 Important. No trading Monday. Shortened trading week may lead to volatility when trading resumes Tuesday.
Existing Home Sales Tuesday, June 21,
10:00 am, et
5.55M Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
Weekly Jobless Claims Thursday, June 23,
8:30 am, et
212K Important. An indication of employment. Higher claims may result in lower rates.
New Home Sales Friday, June 25,
10:00 am, et
580K Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment Friday, June 25,
10:00 am, et
57 Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.

Forecast Uncertainty

The Federal Open Market Committee member’s projections for the future reported a PCE inflation range of 4.8% to 6.2% in 2022, 2.3% to 4.0% in 2023, and 2.0% to 3.0% in 2024. The long-term goal remains an inflation goal of 2.0%. The projected Fed funds rate is 3.1% to 3.9% in 2022, 2.9% to 4.4% in 2023, and 2.1% to 4.1% in 2024. Fed Chair Powell seemed confident in his press conference that they will be able to tackle the challenges ahead and reach these goals. The financial markets are considerably more uncertain of the Fed’s ability to do so with their late moves to combat inflation and wrong forecast regarding inflation being “transitory.”

The challenge the Fed faces is stemming the upward trend of inflation without throwing the economy into recession. Their aggressive 75-basis point hike compared to their verbal guidance of a 50-basis point increase prior to last week’s meeting resulted in considerable stock and bond volatility.

The Fed noted, “The economic projections provided by the members of the Board of Governors and the presidents of the Federal Reserve Banks inform discussions of monetary policy among policymakers and can aid public understanding of the basis for policy actions. Considerable uncertainty attends these projections, however. The economic and statistical models and relationships used to help produce economic forecasts are necessarily imperfect descriptions of the real world, and the future path of the economy can be affected by myriad unforeseen developments and events. Thus, in setting the stance of monetary policy, participants consider not only what appears to be the most likely economic outcome as embodied in their projections, but also the range of alternative possibilities, the likelihood of their occurring, and the potential costs to the economy should they occur.”

A cautious approach to float/lock decisions is wise in this environment considering the “uncertainty” the Fed details.

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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