![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week lower which put upward pressure on rates. We started the week on a neutral note but then rates shot higher mid-week. There are considerable concerns about liquidity in the US debt markets. The Fed has been a primary purchaser of Treasuries and MBSs and with them taking a break the market is in a bit of disarray. The data was all over the place. Industrial production rose 0.4% vs the expected unchanged reading. Capacity use was 80.3% vs 79.8%. NAHB housing was 38 vs 44. Housing starts were 1439K vs 1465K. Weekly jobless claims were 214K vs 233K. Existing homes sales were 4.71M vs 4.7M. Philadelphia Fed business conditions index was down 8.7 vs down 5. 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 |
| FHFA House Price Index | Tuesday, Oct. 25, 10:00 am, et |
Down 0.6% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, Oct. 25, 10:00 am, et |
106.0 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| New Home Sales | Wednesday, Oct. 26, 10:00 am, et |
630K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Q3 GDP | Thursday, Oct. 27, 8:30 am, et |
Up 2.0% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Oct. 27, 8:30 am, et |
225K | Important. An indication of employment. Higher claims may result in lower rates. |
| Durable Goods Orders | Thursday, Oct. 27, 8:30 am, et |
Up 0.2% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| Personal Income and Outlays | Friday, Oct. 28, 8:30 am, et |
Up 0.3%, Up 0.4% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, Oct. 28, 8:30 am, et |
Up 0.5% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| U of Michigan Consumer Sentiment | Friday, Oct. 28, 10:00 am, et |
58.6 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Caution
Timing is one of the most important factors in success. Unfortunately, knowing the perfect time to lock in a loan is impossible until after the fact. While analysts constantly try to predict the future, the bottom line is they continually fall short in terms of accuracy. The Fed is a prime example of this. They constantly adjust inflation expectations and rate hikes and cuts accordingly.
Floating is risky. The Fed has said they will reduce their MBS holdings at some point and inflation fears are increasing. The recent trend has resulted in higher rates. Caution is key.
