The rates below are based on no points with a loan amount of $1,500,000, a purchase price of $2,000,000 and excellent credit history.
Friday’s bond market has opened in positive territory due to weaker than expected economic data. The stock markets are fairly calm but showing minor losses with the Dow down 28 points and the Nasdaq down 12 points. The bond market is currently up 12/32 (1.75%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.
Yesterday’s 30-year Bond auction followed suit of Wednesday’s 10-year sale by drawing a strong level of investor interest. However, yesterday’s auction results did not have the positive impact on the bond market that Wednesday’s sale did. Despite most of the benchmarks we use to gauge investor demand showing a strong level of interest in the securities, the broader bond market didn’t really have much a reaction after results were posted at 1:00 PM ET. Therefore, we had no intraday revision to mortgage pricing.
The first of this morning’s two relevant economic reports was March’s Industrial Production data at 9:15 AM ET. It showed a 0.6% decline in output at U.S. factories, mines and utilities, indicating manufacturing sector weakness. Analysts were expecting to see little change in production, so we can consider the data good news for bonds and mortgage rates. This is especially true since February’s production calculation was revised lower from down 0.5% to also down 0.6%.
Late this morning, the University of Michigan’s Index of Consumer Sentiment was posted, coming in at 89.7. This was well below expectations of 91.9 and was a decline from March’s 91.0. This reading means fewer surveyed consumers felt better about their personal financial and employment situations than many had thought. Because waning confidence usually means weaker consumer spending levels, this is also good news for the bond and mortgage markets
Looking ahead, the biggest event next week may be Thursday’s European Central Bank (ECB) meeting. Bond purchases by the ECB have helped keep global bond yields low, so comments about future policy could have an impact on U.S. mortgage rates. Before that, the NAHB housing index will be released on Monday. Housing starts will come out on Tuesday. Existing home sales will be released on Wednesday.
Courtesy of Julie Rippentrop, Princeton Capital – email@example.com