![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week sharply lower which put upward pressure on rates. Negative sentiment dominated trading most days. The data was mixed with some higher inflation readings. The trade deficit was $70.4B vs $70.6B. Consumer prices rose 0.2% vs 0.1%. The core rose 0.3% vs 0.2%. Weekly jobless claims were 258K vs 230K, the highest since mid-2023. The Fed minutes showed debate regarding the magnitude of the recent rate cut. The release noted, “Several participants remarked that reducing policy restraint too soon or too much could risk a stalling or a reversal of the progress on inflation.” Producer prices were unchanged vs up 0.1%. The core rose 0.2% as expected. The Core, year over year, rose 2.8% vs 2.7%. Mortgage interest rates finished the week worse by approximately 3/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| Federal Holiday | Monday, Oct. 14 | Important. No trading Monday. Volatility may occur Tuesday following the extended holiday weekend. | |
| Retail Sales | Thursday, Oct. 17, 8:30 am, et | Up 0.3% | Important. A measure of consumer demand. Weakness may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, Oct. 17, 8:30 am, et | 250K | Important. An indication of employment. Higher claims may result in lower rates. |
| Philadelphia Fed Survey | Thursday, Oct. 17, 8:30 am, et | 14 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Industrial Production | Thursday, Oct. 17, 9:15 am, et | Down 0.1% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Capacity Utilization | Thursday, Oct. 17, 9:15 am, et | 77.8% | Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates. |
| NAHB Housing Index | Thursday, Oct. 17, 10:00 am, et | 42 | Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates. |
| Housing Starts | Friday, Oct. 18, 8:30 am, et | 1.36M | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
NAHB
The National Association of Home Builders (NAHB) releases the Housing Market Index each month which provides an indication of single family housing market conditions. The results are derived from a survey of NAHB members in which members are asked to rate current market conditions, future market conditions, and prospective buyer traffic. The data is compiled and then a final number between 0 and 100 is released. A reading over 50 is generally considered positive. The data often correlates with the housing starts data.
The release this week may provide an early indicator to the housing starts figure Friday assuming the two reports are in line this month. Mortgage interest rates remain volatile. The Fed is confident they will eventually get to their 2% inflation goal, which would generally put downward pressure on mortgage rates. However, this will take time and there are no guarantees that rates will fall in the short term. Therefore, a cautious approach to float and lock decisions is wise.
