Market Overview, Weekly Review

What’s News for Mortgage Rates This Week: August 23rd

August 23, 2010 by · 4 Comments 

If you’re a fan of cliff diving, last week was your week. It was full of economic reports that took a nose dive for the real estate industry, mortgage markets and the overall economy.

Mortgage bonds and mortgage rates took a beating while all ears were listening to hear the outcome and recommendations of the “Future of Housing Finance” conference last Tuesday. At the end of the day, the majority of opinions agreed to the fact that government still needs to be involved in the housing market in the form of Fannie Mae, Freddie Mac and FHA.

In other real estate specific news, not only did the NAHB Housing Market Index fall short of estimates, so did housing starts and building permits. These combined reports proved that the housing tax credit may have done more harm than good to the housing industry.

Although the manufacturing indexes showed signs of improvement, the fact that Initial Claims came in well above expectations drew skepticism about the health of the employment markets. Furthermore, the buzz has begun about a second dip in the economy if new jobs are not created. Jobs is extremely important to the economy and the recovery of home values.

Highlights for this week’s news will be the Existing Home Sales Report on Tuesday and the New Home Sales Report on Wednesday. These two reports will either confirm the dismal state of the housing industry post-homebuyer tax credit or show a new spark for the real estate industry.

Durable Goods Report will be released on Wednesday and the all important Gross Domestic Product Report on Friday. Collectively, these two reports will provide greater detail on economic activity and specifically in which direction the economy is heading.

The report that has garnished the most weekly attention will be released on Thursday….Initial and Continuing Jobless Claims Report. As the summer comes to an end, will the seasonal employment surge now become a major drag on any potential recovery. The lack of jobs still is a big key to real estate.

This is What’s News for Mortgage Rates This Week: August 23rd.

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.

Buying a house? The last thing you want is an unsuccessful closing. Check out the Mortgage Market Guide View for some tips that will help ensure your home buying experience moves in the right direction.

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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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Comments

4 Responses to “What’s News for Mortgage Rates This Week: August 23rd”
  1. Cathy Mattan says:

    Great information. I see and hear that the job market in NWI continues to decline. The lines at the unemployment office get longer everyday.
    However how many are enjoying the time off and just sitting back and collecting? I see it and hear it everyday!

  2. Cathy – Do you find it odd that home buyers have the perfect scenario (i.e. low interest rates, low home prices, large supply of homes) to buy homes in Crown Point Indiana but many will never be able to pull the trigger due to anxiety over their job security?

  3. As one of the millions of people who work in commission sales, and as a permanent temp, at various times I fall into the categories of:
    Self-Employed
    Under Employed
    Barely Employed
    Regardless of the definition, we collectively, cannot receive unemployment benefits because not being staffers, we don’t pay into the system. Consequently the Initial Claims always seems like a warped statistic. Certain construction workers work 9 months and ride out the rest of the year on UI. Others of us just have to survive on our wits. And still others live off-the-books in the unreported or underground economy. I wonder how much those statistics have changed.

  4. Steve – As with every official report, there is always an unofficial report due to all the inherent errors in the reporting method. If you look at the cup as being half full there are more individuals who are employed that can still buy a home than those who are unemployed. #justsayin

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