WKRE Blog

Straight Stats

Mortgage interest rates were mostly flat on the week despite generally stronger than expected economic data. Economic reports better than expected included November Construction Spending, November Factory Orders, and the December ISM Services Sector Index. The ISM Services Sector Index increased to 57.1, the highest level since early 2006. Employment data was mixed. The December ADP Private Jobs Report showed job gains of 297k on expectations of 100k job gains. However, today’s employment report for December from the Bureau of Labor Statistics showed gains in non-farm payrolls of 103k on expectations of a gain of 160k non-farm payrolls. Private non-farm jobs increased by 113k on expectations of an increase of 180k jobs.

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Straight Stats

A run of good economic data continued this week, maintaining the upward pressure on long-term interest rates that began in November.
The National Association of Realtors reported a 3.5% increase in pending sales in November, although still 9% below 2009. New claims for unemployment insurance fell to the best level since 2008, a little more than 400,000 weekly. The Chicago purchasing managers’ survey of manufacturing (“ISM”) jumped in December, possibly indicating growing strength in the national numbers due on Monday. On the weak side: the leading measure of consumer confidence slid in December, and the October Case/Shiller report of home prices was weaker than any expected.

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Straight Stats

Mortgage interest rates increased again this past week as economic data was mostly better than expected. Reports stronger than expected included November Retail Sales, the December Empire State Manufacturing Index, November Industrial Production and Capacity Utilization, weekly jobless claims, and the Philadelphia Fed Business Index. The November Producer Price Index (PPI), a measure of wholesale prices, increased more than expected, up 0.8% on expectations of an increase of 0.5%. The November Consumer Price Index (CPI) increased 0.1%, slightly less than expected. Housing data, though, did not meet expectations. November Housing Starts were up 3.9% on expectations that starts would be up 4.8%. November Building Permits were down 4.0% on expectations that they would be up 2.5%.

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Straight Stats

Mortgage interest rates increased this past week as the market expects inflation to increase as a result of QE2. The Fed will purchase $600 billion in mostly intermediate term Treasury notes over the next several months as a result of QE2. Initially, markets thought that the Fed intended to keep rates low as a result of these purchases but markets increasingly believe that the Fed intends to stimulate inflation, which erodes the value of fixed income investments such as mortgages. Economic data was mixed. Economic data stronger than expected included October Retail Sales, the November Philadelphia Fed Business Index, and weekly jobless claims. Economic data weaker than expected included the New York Empire State Manufacturing Index, October Industrial Production, October Housing Starts, and October Building Permits. Inflation data continues to be tame. The October Consumer Price Index was up just 0.2%. Year over year, CPI increased just 1.2%, the lowest increase on record.

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Straight Stats

Mortgage interest rates increased this past week despite the Fed announcing last week that it would purchase $600 billion in Treasuries over the next several months. Markets are concerned that the Fed may purchase intermediate term 3 year, 5 year, and 7 year notes instead of longer dated 10 year notes and 30 year bonds which would be more likely to help mortgage rates. Markets are also concerned that the quantitative easing move is mainly directed toward weakening the Dollar in order to improve exports. Economic data of note included weekly jobless claims which dropped more than expected. The September Trade Deficit was less than expected on slightly stronger exports. The Treasury reported a budged deficit of $140.4 billion in October, the 35th consecutive month of deficit spending. Also, the Treasury auctioned $72 billion in 3 year notes, 10 year notes, and 30 year bonds. The auctions were met with mixed demand.

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Straight Stats

Mortgage interest rates were flat on the week as economic data was slightly better than expected. September Existing Home Sales and New Home Sales were better than expected. Increases in existing home sales were largely driven by the expiring tax credit. October Consumer Confidence, September Durable Goods Orders, and the October Chicago Purchasing Managers Index were slightly better than expected. Weekly jobless claims fell more than expected. The Q3 Advance GDP report showed that the economy grew at an annual rate of 2.0%, in line with expectations. The University of Michigan Consumer Sentiment Index fell to 67.7, its lowest level since November of 2009. The Treasury auctioned $99 billion in 2 Year, 5 Year, and 7 Year Notes, which was met with mixed demand.

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Straight Stats

Mortgage interest rates improved slightly this past week on mixed economic data. Industrial Production, Capacity Utilization, Building Permits, and the Philadelphia Fed Business Index were weaker than expected. September Housing Starts increased 0.3% on expectations that starts would fall by 3.5%. Weekly jobless claims fell slightly. The Fed’s Beige Book, a survey of economic conditions in the 12 Fed districts, showed modest improvement compared to the previous report which showed slow economic activity. It is widely expected that the Fed will announce the details of its second round of quantitative easing at the conclusion of its FOMC meeting on November 3rd. It is expected that the Fed will purchase longer dated Treasuries to help support lower interest rates.

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