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Home Mortgage Newsletter-December 19th, 2011 ...

Mortgage Newsletter-December 19th, 2011 Dana Bain Premiere Mortgage 978-422-2311

http://www.bainmortgage.com/MortgageMarketWeekInReview

Newsletter-December 19th, 2011
Provided by
Dana Bain
Dana Bain
Premiere Mortgage Services
11 Malvern Hill Road
Sterling, MA 01564
Phone: (978) 422-2311
Fax: (978) 422-2313
E-Mail: dana@bainmortgage.com

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Market Comment

Mortgage bond prices were slightly higher last week but not enough for mortgage interest rates to see any considerable improvements. Rates came under pressure early in the week as the IMF looked to spend billions of Euros to help stem the debt concerns. Rates bounced back following the Fed meeting Tuesday and stayed relatively in check throughout the rest of the week with choppy but tight trading. The consumer and producer inflation data was mixed with core CPI data slightly higher than expected and core PPI data weaker than expected. The debt auctions generally showed strong foreign demand. Mortgage bonds ended the week better by approximately 1/8 of a discount point.

LOOKING AHEAD

Economic
Indicator

Release
Date & Time

Consensus
Estimate


Analysis

Treasury Auctions Begin

Monday, Dec. 19,
1:15 pm, et

None

 Important.There will be auctions Monday 2Y, Tuesday 5Y, and Wednesday 7Y.
Housing Starts

Tuesday, Dec. 20,
8:30 am, et

615k

 Important.A measure of housing sector strength.Weakness may lead to lower rates.
Existing Home Sales

Wednesday, Dec. 21,
10:00 am, et

4.9m

 Low importance.An indication of mortgage credit demand.Significant weakness may lead to lower rates.
Weekly Jobless Claims

Thursday, Dec. 22,
8:30 am, et

369k

 Important.An indication of employment.Higher claims may result in lower rates.
Q3 GDP Third Estimate

Thursday, Dec. 22,
8:30 am, et

Up 1.9%

 Important.The aggregate measure of US economic production.Weakness may lead to lower rates.
U of Michigan Consumer Sentiment

Thursday, Dec. 22,
10:00 am, et

 67.7 Important.An indication of consumers’ willingness to spend.Weakness may lead to lower mortgage rates.
Leading Economic Indicators

Thursday, Dec. 22,
10:00 am, et

 Up 0.5% Important.An indication of future economic activity.A smaller increase may lead to lower rates.
Durable Goods Orders Friday, Dec. 23,
8:30 am, et		 Down 0.2% Important.An indication of the demand for “big ticket” items.Weakness may lead to lower rates.
Personal Income and Outlays Friday, Dec. 23,
8:30 am, et

Up 0.2%,
Up 0.1%

 Important.A measure of consumers’ ability to spend.Weakness may lead to lower mortgage rates.
PCE Core Inflation Friday, Dec. 23,
8:30 am, et		 Up 0.1% Important.A measure of price increases for all domestic personal consumption.Weaker figure may help rates improve.
New Home Sales Friday, Dec. 23,
10:00 am, et		 298k Important.An indication of economic strength and credit demand.Weakness may lead to lower rates.

Fed Statement

The Fed statement from the meeting last week indicated, “The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.” This is generally good news for mortgage interest rates in the short term as the Fed buying keeps MBS prices high and rates low. However, this is no guarantee that mortgage interest rates will continually push lower. The Fed noted they will “regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.” Rates are historically very favorable and financial conditions can change daily. Remember, the current rates are a given.



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MORTGAGE MARKET IN REVIEW Newsletter-December 19th, 2011
Posted Monday Dec 19