![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week lower which put additional upward pressure on rates. The selling trend continued to start the week and then reversed course Thursday and Friday. Trading conditions were thin surrounding the holiday Wednesday. The data was mixed which resulted in a little more volatility than normally occurs around holidays. Consumer confidence was 104.7 vs 113. New home sales were 664K vs 650K. Durable goods orders fell 1.1% vs the expected 0.4% decline. Weekly jobless claims were 219K vs 224K. Mortgage interest rates finished the week worse by approximately 1/4 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| FHFA House Price Index | Tuesday, Dec. 31, 10:00 am, et | Up 0.4% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Jan. 2, 8:30 am, et | 225K | Important. An indication of employment. Higher claims may result in lower rates. |
| Construction Spending | Thursday, Jan. 2, 10:00 am, et | Up 0.3% | Low importance. An indication of economic strength. Significant weakness may lead to lower rates. |
| ISM Index | Friday, Jan. 3, 10:00 am, et | 48.3 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
House Price Index
The Federal Housing Finance Agency (FHFA) was created on July 30, 2008, when the President signed into law the Housing and Economic Recovery Act of 2008. The Act gave FHFA the authorities necessary to oversee vital components of our country’s secondary mortgage markets – Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. FHFA’s mission is to provide effective supervision, regulation and housing mission oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks to promote their safety and soundness, support housing finance and affordable housing, and support a stable and liquid mortgage market.
“FHFA produces the nation’s only public, freely available house price indexes (HPIs) that measure changes in single-family house prices based on data that cover all 50 states and over 400 American cities and extend back to the mid-1970s. The HPIs are built on tens of millions of home sales and offer insights about house price fluctuations at the national, census division, state, metro area, county, ZIP code, and census tract levels. The FHFA HPIs use a fully transparent methodology based upon a weighted, repeat-sales statistical technique to analyze transaction data from Fannie Mae and Freddie Mac. FHFA releases data and reports on a quarterly and monthly basis. The flagshipFHFA HPI uses seasonally adjusted, purchase-only data, unless otherwise noted. Additional indexes are based on other data including refinances, FHA mortgages, and real property records.”
FHFA issues a monthly report on house prices called the House Price Index (HPI) that looks back 2 months in time. This week’s FHFA release will shed light on the current state of housing prices. A solid housing market is vital to the health of the U.S. economy.
