Weekly Mortgage Rate Update November 29, 2010
Consumer Sentiment Continues to Rise:
Consumer Sentiment plays a very large roll in housing. Simply put, if consumers feel good about their prospects and the overall economy – they are more likely to purchase a home. So, it is great news that the Reuters/University of Michigan’s Consumer Sentiment Index rose for the third consecutive month. It came in at a revised reading of 71.6 which far outpaced the market expectations of 69.5.
Also, the national economy grew at a much faster pace than originally thought. The U.S. Gross Domestic Product (GDP) for the third quarter was upwardly revised from 2.0% to 2.5%. A half point in an economy our size is a very large move upward and marks the best reading in five quarters and the third straight quarterly improvement. Both of these reports are a big positive for housing demand.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -34 basis points last week causing 30 year fixed rates to increase from the previous week. This marks the third straight week of increasing mortgage rates. This further proves that you should not listen to news reports about mortgage rates. The U.S. government cannot and does not control mortgage rates. These are set by an open market place of willing sellers and purchasers of MBS. And as our economy continues to rebound, we will continue to see a longer-term trend of higher mortgage rates when compared to our artificially low mortgage rates in October.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date | ET | Release | For |
| 30-Nov | 9:00 | Case-Shiller 20-city Index | Sep |
| 30-Nov | 9:45 | Chicago PMI | Nov |
| 30-Nov | 10:00 | Consumer Confidence | Nov |
| 1-Dec | 7:00 | MBA Mortgage Applications | 26-Nov |
| 1-Dec | 7:30 | Challenger Job Cuts (y/y) | Nov |
| 1-Dec | 8:15 | ADP Employment Report | Nov |
| 1-Dec | 8:30 | Productivity-Rev. | Q3 |
| 1-Dec | 8:30 | Unit Labor Costs | Q3 |
| 1-Dec | 10:00 | ISM Index | Nov |
| 1-Dec | 10:00 | Construction Spending | Oct |
| 1-Dec | 10:30 | Crude Inventories | 27-Nov |
| 1-Dec | 14:00 | Auto Sales | Nov |
| 1-Dec | 14:00 | Truck Sales | Nov |
| 1-Dec | 14:00 | Fed’s Beige Book | Dec |
| 2-Dec | 8:30 | Continuing Claims | 20-Nov |
| 2-Dec | 8:30 | Initial Claims | 27-Nov |
| 2-Dec | 10:00 | Pending Home Sales | Oct |
| 3-Dec | 8:30 | Nonfarm Payrolls | Nov |
| 3-Dec | 8:30 | Nonfarm Private Payrolls | Nov |
| 3-Dec | 8:30 | Unemployment Rate | Nov |
| 3-Dec | 8:30 | Hourly Earnings | Nov |
| 3-Dec | 8:30 | Average Workweek | Nov |
| 3-Dec | 10:00 | Factory Orders | Oct |
| 3-Dec | 10:00 | ISM Services | Nov |
