Monday Market Update

In recent weeks, mortgage rates have been pushed and pulled mostly by Fed policy expectations and European Union headlines. With little news on these fronts, though, the US economic data emerged as the main driver of mortgage rates this week. Unfortunately for mortgage rates, the data was generally stronger than expected, and rates ended the week higher.

This week's economic data exceeded expectations nearly across the board. Important broad indicators of economic growth, including Retail Sales and Industrial Production, showed solid increases from last month. The Philly Fed manufacturing index rose to the highest level since April. Perhaps the biggest surprise came from the housing data (see below). While stronger economic growth is great news for the economy, it tends to increase future inflationary expectations, which is bad news for mortgage rates.

The national housing data released this week continued to reflect solid improvement. September Housing Starts jumped 15% from August to the highest level since July 2008. Building Permits showed similar strength. September Existing Home Sales were 11% higher than one year ago, making 15 straight months of increases on an annual basis. Inventories of unsold existing homes declined to the lowest level since March 2006. The October NAHB Home Builder Sentiment index rose slightly, its sixth consecutive monthly increase, to the highest level since June 2006.

The big story next week will be Wednesday's Fed meeting, although investors are not expecting any major changes from the Fed following the announcement of QE3 at the last meeting. The most significant economic data will be Friday's release of third quarter Gross Domestic Product (GDP), the broadest measure of economic growth. Before that, New Home Sales will come out on Wednesday. Durable Orders and Pending Home Sales will be released on Thursday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Call us today and we will get you in contact with one of the best lenders out there to help you get the best rate possible and find the perfect home!  : )

 www.TorresRealtyGroup.com

Copyright @ 2012 MBSQuoteline

Monday Market Update

Global central banks continued to add monetary stimulus this week, which was favorable for US bonds. The economic data was roughly neutral. As a result, mortgage rates ended the week a little lower.

On Wednesday, the Bank of Japan (BOJ) announced that it will increase its level of monetary stimulus, following similar recent moves by the Fed and the European Central Bank (ECB). The goal of the central banks is to boost economic growth and to reduce joblessness. The primary tool used by the central banks is bond purchases. The increased demand for bonds, including US mortgage-backed securities (MBS), from central bank purchases has helped push mortgage rates lower.

The housing data released this week continued to show improvement in the sector. August Existing Home Sales rose 8% from July to the highest level since May 2010. August Housing Starts increased 2% from July, and Building Permits for single-family homes rose to the highest level since March 2010. The September NAHB Home Builders confidence index rose for the fifth straight month to the highest level since June 2006.

Next week, New Home Sales will be released on Wednesday. The final revisions to second quarter GDP, Durable Orders, and Pending Home Sales will come out on Thursday. Personal Income, Core PCE inflation, and Chicago PMI manufacturing will be released on Friday. Consumer Confidence and Consumer Sentiment will round out the schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Copyright @ 2012 MBSQuoteline

Monday Market Update

Central Bank the Monday Market Update

While last week was packed with highly anticipated central bank announcements and significant economic data, there was no major economic news this week. As a result, both mortgage rates and the stock market ended the week with little change.

The pace of global economic growth is one primary influence for mortgage rates right now. Slower growth in the US, Europe, China, and most other regions has reduced inflationary pressures and supported low mortgage rates. Last week's stronger than expected Employment report and improving housing sector data, however, has raised hopes that the US will lead the rest of the world back to at least average levels of economic growth. A full slate of economic reports next week will help investors determine if the trend will continue.

While there were few notable headlines this week, news in Europe will continue to impact US mortgage rates in coming months. Weaker European countries are seeking quick relief for their debt troubles, which are close to unsustainable levels. The stronger countries such as Germany, though, are reluctant to pay the price for aid without guarantees about longer term reforms and greater central authority. It's still not certain that the European Union (EU) will remain intact. Both scheduled events and unexpected news almost certainly will have a significant effect on US financial markets for quite a while.

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Tuesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Wednesday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Tuesday. Retail Sales account for about 70% of economic activity. Industrial Production will come out on Wednesday. Housing Starts will be released on Thursday. Consumer Sentiment, Leading Indicators, Philly Fed, and Empire State will round out a busy schedule.

Stay tuned for more Market News and for Housing Stats released on Thursday.

Visis our websit at www.TorresRealtyGroup.com to request specific data on patricular areas that may be of interest to you.

Copyright @ 2012 MBSQuoteline