![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week near unchanged after considerable volatility. Back and forth trading continued around daily tariff developments. Rates worsened Monday and Tuesday but improved Wednesday and Friday to keep rates in check. The data was mixed but some of the housing data showed strength. New home sales were 724K vs 680K. Leading economic indicators fell 0.7% vs the expected 0.5% decline. Existing home sales were 4.02M vs 4.13M. Durable goods orders rose 9.2% vs 2%. Weekly jobless claims were 222K as expected. Consumer sentiment was 52.2 vs 50.8. Mortgage interest rates finished the week with discount points relatively flat.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| FHFA House Price Index | Tuesday, April 29, 10:00 am, et | Up 0.3% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, April 29, 10:00 am, et | 88.5 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| ADP Employment | Wednesday, April 30, 8:15 am, et | 130K | Important. An indication of employment. Weakness may bring lower rates. |
| Personal Income and Outlays | Wednesday, April 30, 8:15 am, et | Up 0.4%, Up 0.4% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Wednesday, April 30, 8:15 am, et | Up 0.1% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Q1 GDP | Wednesday, April 30, 8:15 am, et | Up 0.4% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Q1 Employment Cost Index | Wednesday, April 30, 8:15 am, et | Up 0.9% | Very important. A measure of wage inflation. Weakness may lead to lower rates. |
| Employment | Friday, May 2, 8:30 am, et | 4.2%, Payrolls +130K | Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
Jobs and the Economy
Our economy in the US is driven by consumer spending, which accounts for almost 70% of Gross Domestic Product (GDP). Three driving forces, low unemployment, low commodity costs, and a solid housing market helped consumer spending and kept the economy moving in the right direction the past decade. It is simple; when a person has a job they can spend money. Low food and energy costs, items that must be purchased to keep a household running, increases money that could be used for other “luxury” items like TV’s and cars. Lastly, many households relied on home equity to enhance lifestyles, pay for college, or make major improvements to the house.
High food and energy prices have put pressure on consumers. Housing remains solid but higher mortgage rates continue to impact consumers too. The fear of the future also factors into things.
The abundance of significant data this week will provide insight into the current state of the economy, jobs, and trade. Be cautious as most releases have the potential to result in mortgage interest rate changes.
