Market Overview, Weekly Review

What’s News for Mortgage Rates This Week: August 16th

August 16, 2010 by · Leave a Comment 

In case you missed it. The Federal Open Market Committee met last week to discuss the overall state of the economy and reassess their monetary policy. At the end of the day, the Federal Reserve voted to maintain the target range for the federal funds rate at 0 – 0.250%.

This news was a temporary boost to mortgage bonds and helped mortgage rates decline initially. Unfortunately, by weeks end the mortgage bond market was on their heels despite all the bad headline economic reports last week. One would have expected for home loan rates to decline further.

What exactly happened? The Federal Reserve created a little ambuiguity in their FOMC Statement Press Release and investors worldwide were uncertain as to where they should shift their money.

Last week all eyes were on Ben Bernanke and the gang. Technicals were set aside for interpretive analysis.

This week mortgage rates will be driven by technical economic reports, which include: Empire State Index; Producer Price Index & Core Producer Price Index (PPI); Capacity Utilization; and Philadelphia Fed Index.

The Philadelphia Fed Index is by far the most important report of the week. It’s release on Thursday coupled with today’s Empire State Index will provide insight into the manufacturing sector moving forward.

In real estate specific news, the housing industry will be on the lookout for two economic reports tomorrow. July’s Housing Starts and Building Permits will help clarify which direction the real estate  market is heading now that the home buyer tax credit is no longer an influence. Will new construction continue to languish or will the two reports show new signs of a real estate recovery? Stay tuned.

This is What’s News for Mortgage Rates This Week: August 16th.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Worsen

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Improve

Want to see what other economic reports might impact home buyers and home refinance options in the coming week? Visti the Mortgage Market Update and check out the Economic Calendar.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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