Mortgage Market Update
Mortgage Market Update- March 10, 2013
The good news for the economy is there were more than 200,000 jobs created in February of 2013. This sent the stock market soaring to new highs but of course, this was not good news for the bond market. While this may seem counter-intuitive, anything that is good for stocks (a more risky investment) is bad for bonds (a safer investment). Overall, the report this week added pressure on the bond market and resulted in mortgage rates ticking up to levels closer to four percent, rates not seen in close to a year, since May of 2012.
What the trends show
While there is a possibility of bonds recovering, especially if the jobs numbers are graded downward next month, it’s important to look slightly ahead to upcoming news for any indication that bonds may tick downwards again. Most professionals do not anticipate this happening any time soon, in fact most anticipate rates to continue their upward trend regardless of upcoming news. This may have been best reflected in the most recent reports of sequestration and negative growth, indicating that unless we see some type of real panic, rates will continue their modest upwards trend.
Upcoming news factor
There is little likelihood that upcoming news will offer any relief, rates are not likely to start ticking downwards unless something really dramatic occurs. Over the next week, you can anticipate some of the following news to hit the streets and you should watch for potential changes in bonds after this news.
Inflation reports including the Producer Price Index (PPI) and the Consumer Price Index (CPI) will be released late this week. Keep in mind that CPI shows price changes for consumer purchases while PPI shows increase in products used to manufacture the same goods. Another report to keep a close eye on will be the Retail Sales numbers which will be released on Wednesday. This is especially important since these sales account for nearly 70 percent of all economic activity. Other reports include the Industrial Production reports and the Consumer Sentiment and Import Prices reports. These reports are due out on Friday, after the auctions of Treasury Bonds on Tuesday, Wednesday and Thursday.
It’s important if you have an existing loan application pending that you consider locking in your rate. If you’re considering buying a home, now may be the best time to make your application and lock in a rate before they continue climbing. At Core Mortgage Financial, we’re committed to making sure that our customers get the best possible rates available. Contact us immediately if you are uncertain of whether locking in your rate now makes financial sense.