Mortgage Market Update

Mortgage Market Update- April 1, 2013

This week the bond market was closed to observe Good Friday. However, the economic news from the US and around the globe did not have much of an impact on the bond market in general, leaving rates largely unchanged.  Some of the numbers released this past week had little to no impact on the market, resulting in some trading days finishing at the same level as previous days.

Biggest news of the week

Some of the biggest news this week in the United States was the release of jobless claims. The figures came in at 357,000 which was significantly higher than the estimate of 339,000 which could spell bad news for next weeks unemployment rate. New home sales also came in far lower than expected, at 411,000 which is six thousand lower than the anticipate number.

Cyprus this week reopened banks and there was some talk about them leaving the European Union (EU). Keep in mind that the unrest in Europe is largely factored into current bond rates so unless things go very badly, there will probably not be much impact.

Watching the upcoming week

In addition to following what is happening in Italy with the formation of their government and North Korea may also bear some watching. None of the news coming from either of these areas may have an impact on the bond market, unless it is combined with some gloomy economic news here. Some of the reports we can expect to see this week include:

• Monday: February Construction Spending
• Tuesday: Factory orders from February and motor vehicle sales
• Wednesday: ADPs private sector payrolls (which may give us a glimpse into the new unemployment numbers)
• Thursday: Weekly jobless claims
• Friday: All the major employment data will be released including nonfarm payrolls for March, the unemployment rate and we’ll also get a glimpse into the trade gap for February and consumer credit numbers

Rates may head upwards

Currently rates are their lowest in about three weeks. However, depending on how the numbers come in this week, we could expect a modest rate increase by the end of the week. Keep in mind the unemployment numbers are largely expected to stay around 7.7 percent so even a modest downward trend may have a negative impact on bond.

This past week the stock market rallied again, in spite of the ongoing sequester cuts which many believe will have a long-term negative impact on the economy. Let’s not forget that Congress did reinstate some of those cuts, more specifically those that impacted the defense budget.  Anyone who currently has a mortgage in the works should consider locking their rate. Protect yourself now from potential increases so you do not wind up paying more than you need to. Contact Core Mortgage Financial if you need help starting a loan application to purchase a home or refinance a home. This may be the best opportunity to take advantage of some of the lowest rates that Florida mortgage lenders are offering.