FHA Home Loan Rates (Dec. 9)

FHA Home Loan Rate Recommendation: If I were closing on an FHA Home Loan anytime within the next 60 days I would lock in my FHA home loan rate. *

Tuesday’s bond market has opened flat with no relevant economic news scheduled for release today.  The stock markets are mixed with the Dow down 103 points and the Nasdaq up 12 points.  The bond market is currently nearly unchanged from yesterday’s close, but we will still see an increase in this morning’s mortgage rates of approximately .250 of a discount due to weakness late yesterday.

This week is moderately busy in terms of the number of economic releases scheduled for release. There are four on the agenda but two of them are considered to be very important that can heavily influence the markets and mortgage pricing.  In addition, there is a 10-year Treasury Note auction Thursday that may hurt or help boost bond prices, depending on how strong of a demand there is in the sale.  Since all of the data is scheduled for release Thursday and Friday, the most movement in rates will likely be the latter part of the week.

There is no relevant economic news scheduled for release today or tomorrow. The first data is October’s Goods and Services Trade Balance report early Thursday morning. This report gives the size of the U.S. trade deficit, but it is the week’s least important release. It is expected to show a $54.0 billion trade deficit. Unless it varies greatly from forecasts, I don’t expect it to affect mortgage pricing.

Friday brings us the release of all of this week’s important data with November’s Retail Sales and Producer Price Index (PPI) being posted.  I am expecting to see the most movement in rates Friday, but I believe the general atmosphere for mortgage rates is still negative.

* This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

FHA Home Loan Rates

FHA Home Loan Rate Recommendation: If I were closing on an FHA Home Loan anytime within the next 20 days I would lock in my FHA home loan rate. *

Tuesday’s bond market has opened sharply higher following more bailout news from the Fed that is being received as very favorable for bonds and mortgage rates.  The stock markets are in negative territory with the Dow down 5 points and the Nasdaq down 18 points.  The bond market is currently up 50/32, which will likely improve this morning’s FHA home loan rates by approximately .750 of a discount point over yesterday’s rates.

There were two important pieces of economic data released this morning, giving us mixed results.  The first revision to the 3rd Quarter Gross Domestic Product (GDP) came in at –0.5%, which was close to latest forecasts.  This means that economic activity during the 3rd quarter was weaker than analysts had predicted last month but close to their latest projections.  Accordingly, this data has not had much of an impact on this morning’s FHA home loan rates.

November’s Consumer Confidence Index (CCI) was also released this morning, showing a reading of 44.9. This was much higher than the 39.5 reading that was expected, indicating that consumers were more optimistic about their own financial situations than many had thought.  This is considered negative news for bonds and FHA home loan mortgage rates because rising confidence usually means consumers are more apt to make large purchases in the near future.

Today’s news from the Fed amounts to a more direct support of the mortgage market than the previous moves.  In short, the Fed is going to pump $600 billion directly into mortgage lending that should significantly increase cash flow to make FHA home loans to homeowners and homebuyers.

The previous announcements were directed more at shoring up the banking side of financial system and somewhat ignored the mortgage side.  Today’s news is being considered great for future FHA home loan activity, and therefore, hopefully will help stabilize home prices.

There are four important reports scheduled to be posted tomorrow morning. October’s Durable Goods Orders is the first and will be posted early morning. This data helps us measure manufacturing strength by tracking orders for big-ticket items. It is expected to show a 2.5% drop in new orders. A larger decline would be good news for the bond market and mortgage rates.

The second is October’s Personal Income and Outlays data. This data is thought to measure consumers’ ability to spend and their current spending habits. It is expected to show that income rose 0.1% and that spending fell 0.7%. Smaller than expected readings would be good news for bonds and could lead to improvements in FHA home loan mortgage rates.

The revised November reading to the University of Michigan Index of Consumer Sentiment will also be posted late tomorrow morning. Analysts are expecting to see little change to the preliminary reading of 57.9. Unless we see a significant variance from the forecasted reading, I don’t think this data will cause much movement in mortgage rates tomorrow.

The fourth is October’s New Home Sales, but I don’t expect it to have any impact on the bond or mortgage markets.  Keep in mind that the bond market will close early tomorrow ahead of the Thanksgiving Day holiday, so we may see additional volatility as traders protect themselves over the long weekend.  Many traders will by keeping a skeleton staff Friday, meaning tomorrow is really the last relevant trading day until Monday morning.

* This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.