Professional Home Staging and Photography Blog: The Mortgage Market Watch for the Week of December 28, 2009

The Mortgage Market Watch for the Week of December 28, 2009

The Mortgage Market Watch for the Week of December 28, 2009

Events Affecting the Mortgage Market This Week:

The Feds will auction another $118 billion in Notes this week: $44 billion in 2-Year Notes on Monday, $42 billion in 5-Year Notes on Tuesday, and $32 billion in 7-Year Notes on Wednesday. The auction supply will weigh heavily on the bond and mortgage markets on mounting concern that demand from foreign central banks may lessen on concerns the US federal debt is too great. This could lead to higher mortgage interest rates.

It is also another holiday-shortened week with the New Years Day holiday. The bond and mortgage markets will close early Thursday and remain closed on Friday. Many traders will not be working the latter part of the week, so any unexpected news or data could lead to larger than usual reaction in the financial markets.

Economic Reports to be Released This Week:

There is only one economic report scheduled for release this week that could have an impact on the mortgage market and mortgage interest rates.

Monday, December 28th:

  • There are no economic reports scheduled for release today.

Tuesday, December 29th:

  • Consumer Confidence Index (CCI) for December - posted by the Conference Board, this measures consumer willingness to spend. Because consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely by market traders and can have a significant influence on the mortgage market. If consumers are more confident in their personal financial situations, they are more apt to make large purchases. Analysts are expecting a reading of 53.0, up from November's reading of 49.5. Higher CCI readings could lead to higher mortgage interest rates.

Wednesday, December 30th:

  • There are no economic reports scheduled for release today.

Thursday, December 31st:

  • Jobless Claims - New claims for unemployment are tabulated each week to show the number of individuals who filed for unemployment insurance for the first time. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. However, this data is usually not considered to be very important to the mortgage market.

  • Fed's MBS Purchase Program - the results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $1.070 trillion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

Friday, January 1st:

  • There are no economic reports scheduled for release today. The markets are closed in observance of New Years Day.

How do Economic Data Releases Affect Mortgage Interest Rates?

One of the most important things for you to know when deciding when to lock in the interest rate on your mortgage is knowing what economic data is going to be released - and when - and how it may impact the mortgage market and mortgage interest rates.

While an in depth review of an economic event can help you make an informed decision, understanding the nuances of a release can't help you if you don't know when it's happening. Economic data releases are important because they provide a snapshot of what's happening in the economy. They also provide a foreshadowing of any upcoming market volatility. It's just as important to know when these data releases are happening as knowing what effect these releases can have on the mortgage market.

Mortgage Interest Rate Outlook:

Moderate to High Volatility. As we saw last week, a shortened holiday trading week by no means translates into calmness in the mortgage market. The bond and mortgage markets will close early Thursday at 2 PM, and will be closed all day Friday in observance of New Years Day. This means that trades in mortgage backed securities will light during the latter part of the week. This raises the possibility of stronger reactions to surprises in the mortgage market from economic data than we normally would see.

There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. Mortgage interest rates are still at historic lows. If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. While there's still some room for MBS prices to tick higher, it's better to have locked when you should have floated than it is to float when you should have locked.

If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional. Also, give very serious consideration to applying now and locking in before mortgage interest rates get worse.


East Bridgewater, MA 02333
Phone: (508) 443-1332

Lew Corcoran, ASP®, IAHSP, IAHSP-CB
Accredited Home Staging Professional
Professional Real Estate Photographer

Follow me on Google+

Comment balloon 3 commentsLew Corcoran, ASP® • December 28 2009 06:28AM


let's hope the reates stay stable into the new year.  Any rate hikes will slow down the current pace of activity.

Posted by Scott Guay, Associate Broker. Ocean City and Ocean Pines MD (Berkshire Hathaway Home Services PenFed Realty) over 9 years ago


We need to show pretty soon to the foreign central banks that we can handle things successfully here. Their participation in our mortgage and other debt markets is crucial.

Posted by Esko Kiuru over 9 years ago

Scott - I don't think mortgage rates are going to stay down for much longer.

Esko - I agree - and that means we need to reign in the federal deficiit. Foreign central banks don't have much more of an appetite for purchasing our debt and are leary of a looming hyper-inflation.

Posted by Lew Corcoran, ASP®, Home Stager & Real Estate Photographer (Scena Home Staging & Decora Photography) over 9 years ago

This blog does not allow anonymous comments