Move My Realty - Real Estate News

Quiet Holiday Week

December 30th, 2013 12:06 PM by Ron Mastrodonato

Quiet Holiday Week

Average 30-year fixed rate

Week of 12/27: +0.04%

Week of 12/20: +0.05%

----------------------------

Stocks (Weekly)

Dow: 16,425 +300

NASDAQ: 3,980 +75

The mortgage market was quiet during Christmas week. The few economic reports released last week, including Durable Orders, Jobless Claims, and New Home Sales, were mostly stronger than expected. As a result, mortgage rates ended last week a little higher.

While the headline results for last week's New Home Sales report revealed a decline from the prior month, this obscured the substantial improvement. New Home Sales dipped slightly in November, but this was from a level in October which was revised substantially higher. In fact, the revised October reading was the highest level since July 2008. November New Home Sales were 17% higher than one year ago. This was another in a string of recent housing market reports which provide reasons to be optimistic heading into 2014.

On December 18, the Fed announced that it will begin to scale back its bond purchases. The added demand from the Fed for mortgage-backed securities (MBS) has been a major factor helping to keep mortgage rates low, so a reduction in bond purchases is clearly negative for mortgage rates. Considering this, it is interesting to see that mortgage rates have moved only a little higher since the Fed announcement. In other words, the taper was almost completely priced in to mortgage rates ahead of the actual announcement. By contrast, the reaction in the stock market to the Fed statement was much larger. Investors were pleased that the Fed intends to hold the fed funds rate low until much greater labor market improvement is seen, and the Dow stock index has climbed roughly 600 points to a record high.

THE WEEK AHEAD

The important monthly Employment report will not be released until January 10, leaving a light week for economic data to begin the new year. Pending Home Sales will be released on Monday. Chicago PMI Manufacturing and Consumer Confidence will come out on Tuesday. ISM Manufacturing and Construction Spending will be released on Thursday. Mortgage markets will close early on Tuesday and will be closed on Wednesday in Observance of New Year’s Day.

MON 12/30	TUE 12/31	WED 01/01	THURS 01/02	FRI 01/03
Pending Sales	Chicago PMI		ISM Manufacturing
	Confidence		Construction

The market commentary material provided is from a third party vendor, MBSQuoteline, and is not necessarily the opinions of the sender or the organization they represent. This information is intended for educational purposes only and should not be construed as investment and/or mortgage advice. Additionally, the material is deemed to be accurate and reliable, but there is no guarantee it is without error.

Posted in:General

Posted by Ron Mastrodonato on December 30th, 2013 12:06 PM

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Quiet Holiday Week

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