Mortgage Rate Update.

Aug 30, 2010

Mortgage rates ended the week a little higher last week.  Last week mortgage bond prices were fairly volatile.

.

Date Time (ET) Statistic For Market Expects Prior
30-Aug 8:30 AM Personal Income Jul 0.20% 0.00%
30-Aug 8:30 AM Personal Spending Jul 0.30% 0.00%
30-Aug 8:30 AM PCE Prices – Core Jul 0.10% 0.00%
31-Aug 9:00 AM Case-Shiller 20-city Index Jun 3.10% 4.61%
31-Aug 9:45 AM Chicago PMI Aug 57 62.3
31-Aug 10:00 AM Consumer Confidence Aug 50 50.4
31-Aug 2:00 PM Minutes of FOMC Meeting 10-Aug
1-Sep 8:15 AM ADP Employment Change Aug 13K 42K
1-Sep 10:00 AM Construction Spending Jul -0.70% 0.10%
1-Sep 10:00 AM ISM Index Aug 52.9 55.5
1-Sep 10:30 AM Crude Inventories 28-Aug NA 4.11M
1-Sep 2:00 PM Auto Sales Aug 3.9M 3.8M
1-Sep 2:00 PM Truck Sales Aug 5.1M 5.14M
2-Sep 8:30 AM Initial Claims 28-Aug 475K 473K
2-Sep 8:30 AM Continuing Claims 21-Aug 4435K 4456K
2-Sep 8:30 AM Productivity-Rev. Q2 -1.70% -0.90%
2-Sep 8:30 AM Unit Labor Costs Q2 1.10% 0.20%
2-Sep 10:00 AM Factory Orders Jul 0.30% -1.20%
2-Sep 10:00 AM Pending Home Sales Jul 0.00% -2.60%
3-Sep 8:30 AM Nonfarm Payrolls Aug -120K -131K
3-Sep 8:30 AM Nonfarm Payrolls – Private Aug 44K 71K
3-Sep 8:30 AM Unemployment Rate Aug 9.60% 9.50%
3-Sep 8:30 AM Hourly Earnings Aug 0.10% 0.20%
3-Sep 8:30 AM Average Workweek Aug 34.2 34.2
3-Sep 10:00 AM ISM Services Aug 53 54.3

.
The Conference Board will post their Consumer Confidence Index (CCI) for August late Tuesday morning. This index measures consumer sentiment about their personal financial situations, giving us a measurement of consumer willingness to spend. That is important because consumer spending makes up two thirds of the U.S. economy. A decline in confidence would indicate that surveyed consumers probably will not make a large purchase in the immediate future. That sign of economic weakness should drive bond prices higher, leading to lower mortgage rates Tuesday. It is expected to show a reading of 50.0, which would be a small decline from July’s 50.4. The lower the reading, the better the news for bonds and mortgage pricing.
.
Also Tuesday is the release of the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members. It will be interesting to see some of the Fed member’s views on the economy and inflation and if they will hint what the Fed’s next move may be. But this is one of those events that can cause significant mo vement in rates after its release or be a non-factor. I suspect that this particular release will cause a little movement in bond prices, but not enough to significantly affect mortgage pricing.
.
Wednesday’s only important news is the release of the Institute for Supply Management’s (ISM) manufacturing index at 10:00 AM ET. This index measures manufacturer sentiment and is expected to show 53.0, which would be a decline from last month’s reading of 55.5. A reading above 50 means that more surveyed manufacturers felt business improved during the month than those who felt it worsened. A larger than expected decline in the index would likely cause selling in the stock markets and lead to an improvement in mortgage rates Wednesday.
.
There are two reports scheduled for Thursday. The first is the revised 2nd Quarter Productivity numbers, which measures employee productivity in the workplace. Strong levels of productivity allow the economy to expand without in flation concerns. It is expected to show a downward change from the previous estimate of a 0.9% decline. Forecasts are currently calling for a 1.6% drop, meaning productivity was weaker than previously thought. This would be negative news for the bond market and mortgage rates.

July’s Factory Orders data will also be released Thursday morning. This report measures manufacturing sector strength and is similar to last week’s Durable Goods Orders, but includes orders for both durable and non-durable goods. It is expected to show a 0.3% increase in new orders. A smaller than expected rise would be favorable for bonds, but I don’t see this data causing much movement in rates unless its results vary greatly from forecasts.
.

The biggest news of the week comes Friday morning. The Labor Department will post the unemployment rate, number of new jobs added or lost and average hourly earnings for August early Friday morning. The ideal scenario f or the bond market and mortgage rates is rising unemployment, a larger than expected drop in payrolls and earnings to remain unchanged. Analysts are expecting to see that the unemployment rate moved from 9.5% to 9.6% and that 118,000 jobs were lost during the month. Weaker then expected readings would be very good news for bonds and lead to lower mortgage rates Friday. However, if we get stronger than expected numbers, mortgage rates will probably spike higher Friday.
.
Overall, I expect to see the most movement in rates Friday, but Tuesday and Wednesday should also be fairly active. Also worth mentioning though is the fact that next Monday is Labor Day so all markets will be closed. The bond market will not close early this Friday, but many traders may head home for the long weekend after Friday’s data is posted. This means that trading will likely be thin Friday afternoon even though the markets will still be open. This could lead to additional volatility in rates as traders prepare for the long weekend, so please be careful this week if still floating an interest rate.

.

www.paulcantor.info

.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
by | Categories: main | No Comments

Not that long ago, the credit score was a mysterious number. Whether you were shopping for a car, a house, or a credit card, you could be told your score was too low, and you would not be able to get any financing. Alter­nately, the paperwork might be presented to you and all you had to do was sign. Rarely would you be told your actual score. As time has gone on, and laws have been passed, consumers now know not only what their credit score is, but also what factors are used to create credit scores. Unfortunately, the term “credit score” is used for any model that creates a number indicating your creditworthiness.
.
The major reporting bureaus has developed their own scores, Vantage Score®.  It is not uncommon for someone to get a credit score online, or from an auto dealer, or somewhere else, and then be shocked when they begin the mortgage buying process because their “credit score” varied significantly from what they thought it was..

.
The home mortgage industry continues to primarily use the classic FICO® score as the basis of evaluating creditworthiness. Whether you are currently in the market for a mortgage or may be in the future, one of the most important factors is your credit score. Please give me a call at (804) 433-1510 with any questions about your credit, and how we can get the best financing available for you.

.

www.paulcantor.info

.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
by | Categories: main | No Comments

Reducing Debt

Aug 25, 2010

Reducing Debt – There is no quick fix, requires careful planning and implementation.
.
Develop a Debt Reduction Plan of Action:

.

The best way to approach debt reduction is by re-examining your spending habits and the way your monthly cash flow works. This doesn’t necessarily mean that you need to spend less or earn more. It just means that you need to spend your monthly cash flow differently. You see, most people who want to become debt-free, can become debt free if they just manage their cash flow differently.

.

For example, instead of being forced to dip into your credit cards every time you have an unexpected bill, you should establish a financial reserve account specifically to prepare yourself for unexpected financial obligations. CMPS professionals help you establish a viable plan to re-allocate your monthly cash flow and change your spending habits. This cash flow plan will result in your being financially able to pay cash for everything such as home improvements, cars, furniture, vacations, children’s education and other living expenses.

.

Implement the Plan of Action:

.

There is a reason that professional athletes have coaches. No matter how good the athlete is, the coach can help keep them accountable in identifying weak spots and improving their performance. You can also benefit by having a team of “financial coaches”. CMPS professionals are able to “coach” you in implementing your debt reduction plan. CMPS professionals also work in a team environment with CPAs, CFPs, attorneys and other financial professionals in order to help you better achieve your goals in life.

.

Review and Modify the Plan of Action:

We all experience changes in our lives that involve our income, career, family, health, lifestyle, etc. CMPS professionals help you review and make modifications to your debt reduction plan as changes arise in your personal and financial situation. Additionally, there may be new types of mortgage planning products and services that could help you enhance your debt reduction plan. The plan review and modification is often referred to as an “Equity Management Review”, or an “Annual Mortgage Review.

.

Contact Paul about a debt review.

.

www.paulcantor.info

.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
by | Categories: main | No Comments

On the heels of the disappointing existing home sales numbers yesterday, sales of new homes reach new low last month.  Other data pointing to a no-recovery is the orders for durable goods lower than anticipated.
.

.

www.paulcantor.info

.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

The National Association of Realtors released exsisting home sales numbers today and they dropped to 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July.    This is the lowest level since May of 1995.

.

www.paulcantor.info

.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

.

HVCC and the new  FHA appraisal process continue to have a negative impact on the economy and the housing market.

.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Mortgage rates continue to be at or near all time low levels.  In Washington last week the future of Fannie Mae and Freddie Mac were discussed.  The ultimate problem with the US economy is the high unemployment rate and the current ant-business regulatory environment along with the slowed economy is insuring a continued high rate of unemployment around the 9.5% range.

.

Economic Calendar For this week

.

Date Time (ET) Statistic For Market Expects Prior
08/24/10 10:00:00 AM Existing Home Sales Jul 4.72M 5.37M
08/25/10 08:30:00 AM Durable Orders Jul 3.00% -1.20%
08/25/10 08:30:00 AM Durable Goods -ex Transportation Jul 0.50% -0.90%
08/25/10 10:00:00 AM New Home Sales Jul 334K 330K
08/26/10 08:30:00 AM Initial Claims 08/21/10 485K 500K
08/26/10 08:30:00 AM Continuing Claims 08/14/10 4515K 4478K
08/27/10 08:30:00 AM GDP – Second Estimate Q2 1.40% 2.40%
08/27/10 08:30:00 AM GDP Deflator – Second Estimate Q2 1.80% 1.80%
08/27/10 09:55:00 AM U Michigan Consumer Sentiment – Final August 70 69.6

.

This week  we will likely see the most activity in rates Tuesday morning, but Wednesday and Thursday are also important. If we manage to get weaker than expected results in the key reports and the auctions go well, we should see mortgage rates close the week lower than tomorrow’s opening levels. But stronger than expected results in the economic reports and disappointing results in the Treasury sales will most likely lead to rates moving higher this week.

.

www.paulcantor.info

.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter
by | Categories: main | No Comments

We have some stating that inflation may be hitting sooner than expected.  This would mean higher mortgage rates.  Although nobody knows where the bottom of the rate will / have hit, their is no question that mortgage rates are at near all time lows and home owners and home buyers should take advantage of these.  Home affordability is very high.  It is better to buy than to rent.

.

Inflation, not deflation, Mr. Bernanke Caixin Online

.

www.paulcantor.info

.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Closing Costs Soar.

Aug 19, 2010

Consumer protection regulations and more stringent underwriting have driven the average closing costs on loans up by 36.6% according to a recent survey.    The average closing costs on a $200,000 loan rose to $3,741, which represents a 36.6% increase from a year ago.  This is another example of things designed to help the consumer have an opposite outcome.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

According to TransUnion in a report issued Tuesday, mortgage delinquencies fell during the 2nd quarter of 2010.  This was the second period in a row since 2006 that the number of home owners 60 days  delinquent  on their mortgages had declined.  Also 90 and 120 day mortgage delinquencies also slowed.    This is a sign that the housing and credit markets are stabilizing.

.

www.paulcantor.info

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter