I hope you had a great weekend. Last week we saw mortgage rates increase by almost .375%, which was an extreme reaction to the prior week’s economic reports. This week will be chock full of new economic reports, all of which are relevant to interest rates in the mortgage market. Keep your e-mail constantly open this week because there may be a chance to take advantage of short windows of opportunity to lock a great rate. As per usual, I will inform you as quickly as time permits if this is the case.
Here is what we are looking at this week:
* TUESDAY- The Consumer Confidence Report: This report comes tomorrow and is expected to show a decline to a 61.0 reading. What that means to you as the consumer is simple: a lower than expected reading can mean lower rates and a higher reading can stimulate an increase in mortgage rates. We are looking good here.
* WEDNESDAY - Federal Reserve Meeting: The Fed Board of Governors meets this Wednesday and the general consensus is that they will cut the Federal Funds rate another .25%. It’s not the size of the cut that matters, but the language the Fed uses in their statement as to possibly foreshadow whether or not they are done cutting rates or if they will keep pumping liquidity into the market to keep the economy form stalling further. It is all about psychology with the Fed these days, so be sure to read into what they say.
* WEDNESDAY - Gross Domestic Product (GDP): These numbers are due out Wednesday, which is a broader look at the economy. In addition, some more pointed statistics are also due including 2 manufacturing indices (manufacturing has been holding up well due to the weak dollar) and a key inflation indicator known as the Core PCE. Inflation continues to keep interest rates from falling further and an adverse number here will certainly send rates upward.
* FRIDAY - April ’s Employment Report: This report will be released on Friday. The health of the labor market is perhaps the single biggest factor in the performance of the economy. Thus, the data on the number of new jobs created, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Early estimates are for a loss of 75K jobs in April.
The second half of the week will be absolutely packed with major economic news, so I will communicate these with you as the week goes by. If you are in the process of a refinance, but you haven’t locked, be ready for some movement this week.
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