WKRE Blog

Straight Stats

Mortgage interest rates were mostly flat on the week on mixed economic data. Economic reports better than expected included September Retail Sales, up 0.6% on expectations that they would be up 0.4%. The October New York Empire State Manufacturing Index was also better than expected, increasing to 15.73 on expectations that it would come in at 6.0. August Business Inventories increased more than expected as well. Economic reports weaker than expected included weekly jobless claims, which increased 13k on expectations that they would increase only 4k. The University of Michigan Consumer Sentiment Index was weaker than expected and the August Trade Deficit grew more than expected. Inflation data was tame. The September Consumer Price Index increased only 0.1%. Excluding the food and energy components, core CPI was unchanged.

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Straight Stats

Mortgage interest rates were mostly flat on the week despite economic data generally exceeding expectations. Economic data better than expected included weekly jobless claims, the final look at Q2 GDP, the Chicago Purchasing Managers Index, August Personal Income and Spending, the University of Michigan Consumer Sentiment Index, and August Construction Spending. The Case Shiller Home Price Index and the September ISM Manufacturing Index were in line with expectations. The September Consumer Confidence Index was the only report that was weaker than expected, falling to 48.5, its lowest level since February. Also of note, the Treasury auctioned $100 billion in 2 Year Notes, 5 Year Notes, and $7 Year Notes. Overall, the auctions were met with strong demand.

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Straight Stats

Mortgage interest rates increased slightly again this past week without much new economic data for the markets to digest. Economic data of note included weekly jobless claims which fell more than expected and the July Trade Deficit which was less than expected. July Wholesale Inventories increased 1.3% on expectations that they would increase 0.4%. Consumer Credit continued to fall in July, down $3.63 billion which was in line with expectations. The Treasury auctioned $67 billion in 3 Year Notes, 10 Year Notes, and 30 Year Bonds this past week which was met with mixed demand from the markets.

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Straight Stats

Mortgage interest rates were mostly flat on the week despite generally weaker than expected economic data. Of note, July Existing Home Sales fell 27.2% to its lowest level since June of 1995 on expectations that sales would fall by 13.0%. Year over year, sales were down 25.5% and there is now a 12.5 month supply of existing homes. July New Home Sales were expected to increase by 3.0%. Instead, sales fell by 12.4%. There is now a 9.1 month supply of new homes. July Durable Goods Orders increased by only 0.3% on expectations that orders would increase by 3.0%. Excluding transportation orders, durable goods orders fell by 3.8% on expectations that they would increase by 0.5%. The University of Michigan Consumer Sentiment Index was slightly weaker than expected, reported at 68.9 on expectations of 70.0. On a positive note, weekly jobless claims fell by 31k on expectations that they would only fall by 15k.
Commentary

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Straight Stats

Mortgage interest rates improved slightly again this past week on mixed economic data. Economic data weaker than expected and supporting lower interest rates included weekly jobless claims and the Philadelphia Fed Business Index. Weekly jobless claims were expected to fall by 9k but instead increased by 12k. The August Philadelphia Fed Business Index was expected at +7.5 but actually came in at negative 7.7. Any reading below zero indicates contraction. Also of note, July Housing Starts increased but not as much as expected. July Building Permits fell 3.1% on expectations that they would fall by 2.3%. On a positive note July Industrial Production and Capacity Utilization were both better than expected. The July Producer Price Index (PPI) was in line with expectations. Core PPI, excluding the food and energy components, was up 0.3% on expectations that it would be up 0.1%.

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Mortgage interest rates improved slightly this past week largely driven by the FOMC policy statement. The statement indicated that the economic recovery has slowed and is likely to be “more modest in the near term than had been anticipated”. As a result the Fed said that it will reinvest principal payments from the $1.25 Trillion in Mortgage Backed Securities that it holds back into longer-term Treasury securities. This is referred to as quantitative easing, which hopefully will help keep rates low on longer term debt in the near term. Economic data of note included weekly jobless claims, which increased on expectations that they would fall. July Retail Sales were in line with expectations. The July Consumer Price Index (CPI) increased slightly more than expectations. Year over year, though, CPI is up only 1.2% indicating very little inflation. The Treasury auctioned $74 billion in debt this past week. Overall, the auctions were met with strong demand.

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