Breaking Georgia Mortgage Jumbo FHA VA USDA Rates and News: May 2010

5.28.2010

Latest From : Atlanta RE 5 by 5

The Supply Of New Homes For Sale Just Dropped Off A Cliff

Posted: 28 May 2010 07:45 AM PDT

New Home Supply April 2009 - April 2010 The supply of newly-built homes for sales plummeted in April, a positive indicator for the housing market as we head into the summer months.

It's no wonder that homebuilders are breaking new ground at the fastest clip in 2 years.

At the current sales pace, the nation's complete supply of new homes would be sold in just 5 month's time. That's more than double the pace of a year ago.

Also, as more good news, in terms of total housing units, the government reports that New Home Sales topped one half-million homes sold for the first time since May 2008.

It's a similar spike as within the Existing Home Sales data released earlier this week.

But before we declare the housing market "repaired in full", we have to consider a few of the reasons why home sales are charting so strongly.

The first reason is the federal homebuyer tax credit's April 30 expiration. In order to claim up to $8,000 in tax credits, home buyers must have been in mutual contract for a property before May 1. There is no doubt this contributed to a run-up in sales, especially among first-time home buyers.

The second reason is that mortgage rates have remained exceptionally low, defying expert predictions. Low rates don't sell homes, but they do make monthly payments easier to manage for households torn between renting or buying.

And, lastly, March and April's new home sales may have been buoyed by aggressive discounting on behalf of homebuilders. As compared to February 2010, April's average new home sale price was lower by 13 percent. That's a sharp drop in a short period of time.

For now, though, homes are selling, supplies are dropping, and buyer interest is high. It's no wonder builder confidence is soaring.

5.27.2010

Latest From : Atlanta RE 5 by 5

Should You Refinance Your Mortgage?

Posted: 27 May 2010 07:45 AM PDT

Because of strife in Greece, Spain and North Korea, conforming mortgage rates are back to all-time lows. They're at levels not seen in 50 years. For homeowners that missed the Refi Boom of November 2009, it's a second chance.

In this well-presented, 3-minute video from NBC's The Today Show, you'll get tips getting low rates and choosing the best time to lock in.

Some of the topics covered include:

Why were the experts wrong about rates moving higher this summer?
How much money can you save with a 1 point drop in your interest rate?
Should you buy a bigger home now that rates have fallen?

The advice in the piece is matter-of-fact and centered. There is no cheerleading and the message is honest. Mortgage rates are low and they likely won't stay that way. If you've been thinking about a refinance, talk to your loan officer as soon as possible.

5.26.2010

Latest From : Atlanta RE 5 by 5

Home Price Index Rises 0.3% in March 2010

Posted: 26 May 2010 07:45 AM PDT

Home Price Index from April 2007 peak Home values rose in March, according to the Federal Home Finance Agency’s most recent Home Price Index. Values were reported higher by 0.3 percent, on average, from February.

We use the phrase "on average" because the Home Price Index is broad-reaching, national housing statistic. It ignores the dynamics of neighborhood real estate markets as well as citywide markets , too.

Instead, the Home Price Index focuses on state and regional statistics.

For example, in March 2010 as compared to February:

Values in the East South Central region rose 2.5%
Values in the Mountain states rose 1.1%
Values in the Middle Atlantic states fell 1.0%

Of course, none of this data is especially helpful for today's home buyers and sellers.

Real estate is a local phenomenon that can't be summarized by state or region. What matters most to buyers and sellers is the economics of a neighborhood and that level of granularity can't be served up by a national housing report like the Home Price Index.

The Home Price Index data is additionally unhelpful to buyers and sellers in that it reports on a 2-month delay.

In other words, Home Price Index is not even a fair reflection of today's market -- it highlights the real estate market as it existed 60 days ago.

So why is the Home Price Index even published? Because government, business and banks rely on the reports. As a national indicator, the Home Price Index helps governments make policy, businesses make decisions, and banks make guidelines. This, in turn, trickles down to Main Street where it impacts every one of us -- and eventually influences real estate.

Since peaking in April 2007, the Home Price Index is off 13.44 percent.

5.25.2010

Latest From : Atlanta RE 5 by 5

Home Supplies Tick Higher, Creating An Opening For Today's Home Buyers

Posted: 25 May 2010 07:45 AM PDT

Existing Home Sales Apr 2009-Apr 2010 Sales of existing homes rose in April, buoyed by an expiring home buyer tax credit and exceptionally low mortgage rates.

As compared to March, April's Existing Home Sales rose by 410,000 units nationwide -- the second straight month of large gains. An "existing home" is a home resold by a prior owner (i.e. not new construction).

It's a solid report for housing overall, with rising sales suggesting that the real estate market's recovery is ongoing. However, the data presented a mixed message.

According to the National Association of Realtors®, although the number of homes sold ticked higher in April, so did the supply of existing homes for sale, too.

Sellers are now listing homes faster than buyers can buy them.

After adding another 0.3 months of supply in April, resale home supply is nearly two full months larger than at November 2009's low-point. This put downward pressure on home prices.

Furthermore, because 49% of April's buyers were first-time buyers and the tax credit has since ended, we can expect that sellers will continue to outweigh buyers in the months ahead.

It presents an interesting opportunity for June's home buyers. Mortgage rates are still at their lowest levels of the year -- despite expert predictions to the contrary -- and homes remain affordable. Plus, in a lot of markets, home values have started to creep higher.

There's good values and good rates but neither should last long. For the next few weeks, real estate may be in its 2010 sweet spot.

If you were thinking of moving in September of this year or later, consider moving up your timeframe.

5.24.2010

Latest From : Atlanta RE 5 by 5

What's Ahead For Mortgage Rates This Week : May 24, 2010

Posted: 24 May 2010 07:45 AM PDT

Existing Home Sales Mar 2009-March 2010 Another week, same old story.

Mortgage markets improved again last week on worsening news out of Greece and the Eurozone. Then, as contagion mentality set in, U.S. mortgage bonds gained and mortgage rates fell.

It's the 4th straight week in which conforming mortgage rates improved and, against the expectations of experts everywhere, it's now late-May and mortgage rates are as low as they've been all year.

If you're a homeowner and haven't looked at refinancing lately, it may be a good time to call your loan officer to hear your options. Especially because low rates can't last forever.

The European market concerns are likely overblown and the U.S. economy continues to expand at a measured pace.

This week, housing and inflation data takes center stage.

Monday : Existing Home Sales data
Tuesday : Case-Shiller Index; Home Price Index
Wednesday : New Home Sales data
Thursday : GDP
Friday : Personal Consumption Expenditures

Each of these data points has the power to move mortgage rates -- especially because trading volume is expected to thin as the 3-day weekend nears. As volume drops on Wall Street, it will be harder to match buyers and sellers and, as a result, mortgage pricing will get (more) erratic.

Rates should be most stable at the start of the week. It may be the best time to lock a rate.

5.21.2010

Latest From : Atlanta RE 5 by 5

Home Opportunity Index Ranks 225 Metro Areas For Affordability

Posted: 21 May 2010 07:45 AM PDT

Home Affordability - Top and Bottom 5 markets 2010 Q1

With home prices still relatively low and mortgage rates trolling near their all-time best levels, it's no surprise that home affordability is extraordinarily high in most U.S. markets.

According to the quarterly Home Opportunity Index as published by the National Association of Home Builders, more than 72 percent of all new and existing homes sold between January-March 2010 were affordable to families earning the national median income.

It's the second highest reading in the survey's history.

Of course, on a city-by-city basis, home affordability varies.

In the first quarter of 2010, for example, 98.7% of homes sold in Bay City, Michigan were affordable for families earning the area's median income and in Indianapolis, the percentage was almost 95 percent.

Indianapolis has held the top quarterly ranking for close to 5 years now.

On the opposite end of the spectrum, the New York-White Plains, NY-Wayne, NJ region earned the "least affordable" metropolitan area for the 8th consecutive quarter. Just 20.9% of homes are affordable to families earning the local median income.

The rankings for all 225 metro areas are available on the NAHB website but regardless of where your town ranks, home affordability remains high as compared to historical values but it likely won't last long. Home values are recovering in many markets and mortgage rates won't stay this low forever.

All things equal, buying a home may never come this cheap again. If you were planning to buy later this year, consider moving up your timeframe.

5.20.2010

Latest From : Atlanta RE 5 by 5

The Fed's April Minutes Push Mortgage Rates Even Lower

Posted: 20 May 2010 07:45 AM PDT

FOMC April 2010 Minutes

After starting the day in the red, mortgage rates rebounded Wednesday afternoon after the Federal Reserve released its April 27-28, 2010 meeting minutes.

It's good news for home buyers and would-be refinancers. Mortgage rates continue to troll along multi-year lows.

"Fed Minutes" are lengthy, detailed recaps of Federal Open Market Committee meetings, not unlike the minutes you'd see after a corporate conference, or condo association gathering. The Federal Reserve publishes Fed Minutes 3 weeks after each respective FOMC get-together.

The Fed meets 8 times annually.

Because of the minutes' content and density, it's of tremendous value to Wall Street and investors. Fed Minutes provide a glimpse into the conversations and debates that shape the country's monetary policy.

The broad scope of the published meeting minutes are in sharp contrast to the more well-known, post-meeting press release which reads more like a policy summary.

And the extra words matter.

Here's some of what the Fed discussed last month:

On Greece : A crisis in Greece could slow U.S. domestic growth
On housing : Despite government support, growth appears to have stalled
On its mortgage buyback program : There's little reason to sell mortgage bonds right now

When the markets saw the Fed Minutes, what had been a down day for bond markets turned positive. The less-than-sunny outlook for the near-term U.S. economy sparked bond sales, pushing prices higher.

Mortgage rates move opposite mortgage bond prices.

Wall Street is always in search of clues from inside the Fed about what's next for the economy and post-FOMC minutes usually give good fodder. April's meeting was no different.

For now, mortgage rates remain near all-time lows but once the Eurozone issues are settled, rates are likely to rise. If you haven't locked a mortgage rate, your window may be closing. Once the economy is turning around for certain, mortgage bonds will be among the first of the casualties.

5.19.2010

Latest From : Atlanta RE 5 by 5

Housing Starts Rise In April, Exerting Downward Pressure On Home Prices

Posted: 19 May 2010 07:45 AM PDT

Housing starts May 2008 - April 2010

Single-family Housing Starts rose by 55,000 last month, suggesting ample housing stock from which can choose this summer.

The report is a slightly larger read than what economists had expected.

Furthermore, for the first time since June 2009, Housing Starts appears to have broken away from its half-million unit plateau. 593,000 new homes were started in April.

Ordinarily, both Wall Street and Main Street would celebrate a strong housing sector report like this, but the Department of Commerce's press release also held two cautionary notes.

The first point of caution is a mathematical one. Although single-family starts increased by 10.2 percent, the survey had a Margin of Error of 10.7 percent. This means that Housing Starts may have fallen by 0.5 percent and the report is statistically worthless.

The second point of caution is tied to Building Permits, a complementary data point in the same Department of Commerce report. In April, Building Permits fell by almost 11 percent with a tiny Margin of Error of less than 2%. This tells us that builders are pulling back -- a sign of low housing market confidence

According to the Census Bureau, 82% of homes start construction within 60 days of permit-issuance. Housing Starts, therefore, should ease though June and July.

Home prices are based on housing's supply and demand. For the next few months, supply should elevate, helping prices remain suppressed, after which, supply should dwindle.

The best time to buy a home, therefore, may be now. As the summer months come to close, we may find that buyers vastly outweigh sellers.

5.18.2010

Latest From : Atlanta RE 5 by 5

The Right Way To Take A Cash Gift For Downpayment

Posted: 18 May 2010 07:45 AM PDT

How to accept a cash gift on a mortgage As lenders tighten mortgage guidelines for home buyers, minimum downpayment requirements are increasing. Several years ago, you could finance a home with nothing down. Today, most conventional mortgages require at least 10 percent.

Anecdotally, guideline changes have led to an increase in the number of home buyers accepting cash gifts from family.

Gifts are allowed in most cases but the problem is, if you don't accept the gift in a "lender-friendly" way, the mortgage underwriter could reject it, and negate it.

You can't just deposit a cash gift into your bank account. You have to follow a series of steps and keep records.

Provide an acceptable gift letter signed by all parties
Provide documentation of the gifter's withdrawal of funds via teller receipts
Provide documentation of the giftee's deposit of funds via teller receipts

Lenders require these 3 steps for two basic reasons. First, they want to make sure that the cash gift is "clean" (i.e. not laundered). Second, they want to make sure the gift is really a gift and not a loan-in-disguise.

It's why lenders typically require that the loan application be accompanied by a signed, dated letter.

For example:

I am the [relationship to recipient] of [name of recipient] and this letter serves as evidence that I am gifting [name of recipient] [amount of gift] to be used for the purchase of the home at [complete address of property].

This is a gift -- not a loan -- and there is no expectation of repayment.

Signed,
[Signature of gifter]

As an additional step, home buyers receiving cash gifts should make sure that gifted funds are not commingled at the time of deposit. If the cash gift is for $10,000, therefore, the bank's deposit slip should indicate that a $10,000 deposit was made -- nothing more, nothing less. Don't add a random $100 deposit to the transaction, in other words. The $100 deposit should be a separate transaction.

It's also worth noting that gifting funds between family members can create both legal and tax liabilities. If you're unsure about how donating or receiving a gift may impact you, call or email me directly. If I can't help you with your questions, I can refer you to somebody that can.

5.17.2010

Latest From : Atlanta RE 5 by 5

What's Ahead For Mortgage Rates This Week : May 17, 2010

Posted: 17 May 2010 07:45 AM PDT

Consumer Price Index March 2009-March 2010 Mortgage markets improved last week -- but barely -- as ongoing doubt surrounding the health of Greece and the Euro pushed additional investors into safe assets, including mortgage bonds.

Mortgage rates were wildly volatile between Monday and Friday before closing the week slightly better than their best levels of the year.

It's the 3rd straight week in which mortgage rates improved but that doesn't necessarily mean the trend for lower rates will continue. The last two times mortgage rates teased these levels, they immediately spiked higher.

It happened once in February 2010, and again, 4 weeks later in March.

This week, the same could happen. After a week-and-a-half without much data of consequence, the newswires will be on overtime.

The first release to watch is Monday's National Association of Home Builder's Housing Market Index. It's not a "mainstream" release, per se, but the index gives some insight into how homebuilders are feeling about the economy and homebuilders are on the frontlines of the housing market. The stronger the report, the worse it should be for mortgage rates going forward.

The same goes for Tuesday's Housing Starts and Building Permits numbers.

Also on Tuesday, the government releases the Producer Price Index. The Producer Price Index is like a "cost of living" report for U.S. businesses -- it measures the change in operating cost from mont-to-month and from year-to-year.

PPI is viewed as a precursor to inflation and inflation is bad for mortgage rates. Therefore, if the Producer Price Index reads higher-than-expected, mortgage rates will rise. If PPI is in-line, rates should hold steady.

Then, on Wednesday, the Consumer Price Index is released. Again, if costs are rising, mortgage rates will likely follow.

The week closes with the release of the Federal Reserve's minutes from its last meeting in April and the jobs figures. All in all, a busy week of data and mortgage rates could change by a lot.

If you're still shopping for the market bottom, luck's been on your side but there's a point when it's best to just lock in. This week may be that point.

Talk to your loan officer about today's market and make yourself a game plan for locking a rate. Rates have never stayed this low, for this long, and this week doesn't figure to be much different.

5.14.2010

Latest From : Atlanta RE 5 by 5

Your Mortgage Approval Isn't Final Until It's Funded

Posted: 14 May 2010 07:45 AM PDT

Approval not final until funded A mortgage approval is never final until it's funded.

A host of things can "go wrong" while your home loan is underway. Some are in your control, many more are not. And just being aware of some potential pitfalls could help save your loan down the road, and your peace of mind today.

MSN Money ran a summary piece on the topic titled "10 Things That Can Kill A Home Loan".

It's an excellent article because, unlike most "get approved" articles that advise against things like buying a car before closing, or opening a bunch of new credit cards, the MSN Money piece addresses more uncommon factors that can lead to a similar loan turndown.

For example, a home may be unfundable if it's unsuitable for human habitation -- a condition you may not discover until after a thorough home inspection's been made. Broken windows, lack of plumbing, and/or major foundation damage are all deal-breakers with a lender.

Either fix the home prior to closing, or don't close at all.

Homes in "declining markets" have danger spots, too. Especially for conforming mortgage applicants with less than 20% equity.

Because of how private mortgage insurers operate, some homes carry tougher, ZIP code-based PMI eligibility requirements. As a mortgage applicant, it's important to understand this because you may be PMI-eligible in one neighborhood, but not in another.

There's others ways in which a mortgage approval can go bad, too:

You're self-employed and your income was lower last year versus the year prior
Your tax return shows large amounts of unreimbursed employee expenses
You failed to return required paperwork to the lender within a reasonable time frame

Mortgage approvals are delicate and, despite an improving economy, lenders still operate with caution. Talk with your real estate agent and your loan officer and put together a game plan.

The best way to beat the mortgage system is to know the rules before you start to play.

5.13.2010

Latest From : Atlanta RE 5 by 5

Foreclosure Activity Slows For The First Time In Several Years

Posted: 13 May 2010 07:45 AM PDT

Foreclosure concentration, by state (April 2010) The national foreclosure rate is finally falling.

According to foreclosure-tracking firm RealtyTrac.com, the number of foreclosure notices dropped 2 percent between April 2009 and April 2010.

2 percent may not seem like much, but it's the first time in the history of the RealtyTrac report that the annual foreclosure rate has dropped.

To be sure, foreclosure rates remain elevated -- more than 300,000 were reported last month, but default notices appear to be approaching a plateau.

The RealtyTrac report shows some other interesting statistics, too:

6 states accounted for more than half of April's bank repossessions nationwide
For the 40th month in a row, Nevada topped the nation's foreclosure rate
Foreclosure rates dropped in both California and Arizona, 2 foreclosure hot-spots through 2009

The good news for housing doesn't stop there. 9 of the top 10 leading metropolitan areas for foreclosure-related activity showed a drop in annual activity. Only Reno, Nevada showed an increase.

Buying distressed homes is big business, according to the National Association of Realtors®, accounting for 35 percent of all home resales with a typical discount ranging near 15 percent on value.

But with the discount comes some caution. You need to know how buying a foreclosed can be different from buying a non-foreclosed home.

For example, distressed properties are often sold as-is and may have defects that render them "un-lendable". Secondly, "quick closings" aren't usually possible with bank-owned homes -- you're often at the bank's schedule and mercy.

And, lastly, not all foreclosed homes are searchable online. You'll usually find more stock if you work with a real estate agent versus searching online.

The RealtyTrac foreclosure report is thorough and can help you gauge what's happening on a state-by-state level, and in the nation's largest metropolitan areas. Once you've done your research, talk to your real estate agent about what to do next.

There's still good deals in the foreclosure market — you just have to know where to find them.

5.12.2010

Latest From : Atlanta RE 5 by 5

Relocate America's Top 100 Places To Live (2010 Edition)

Posted: 12 May 2010 07:45 AM PDT

Relocate America Top 100 Places To Live Relocate America recently released its 2010 list of Top 100 Places To Live In America. The rankings are topped by some cities you may expect, and some you may not.

According to Relocate America, the rankings highlight communities "moving in the right direction", defined as having a combination of strong leadership, job opportunities, improving real estate markets, recreational options and a good quality of life.

It's not a bad formula and topping the list of Top 100 Places To Live In America is Huntsville, Alabama. Huntsville was chosen for its low levels of unemployment, stable housing stock, and low cost of living. Last year, Huntsville placed fifth on the Relocate America list.

The Top 10 cities in which to live, as selected by Relocate America are:

Huntsville, AL
Washington, DC
Austin, TX
San Diego, CA
San Antonio, TX
Tulsa, OK
Charlotte, NC
Raleigh, NC
Boulder, CO
Minneapolis, MN

View the complete Top 100 Places To Live In America 2010 list at the Relocate America website.

5.11.2010

Latest From : Atlanta RE 5 by 5

Shopping For Mortgage Rates Is Part Research Skills, Part Luck

Posted: 11 May 2010 07:45 AM PDT

Good luck charms and mortgage rates Shopping multiple lenders for a "good mortgage rate" can sometimes save you 1/8 percent on your rate and/or a few hundred dollars in fees. However, when it comes to getting the best mortgage rate, you're going to more than good research skills.

You're going to need some luck.

Mortgage rates are unpredictable, ever-changing, and rarely change as expected.

For example, when the Federal Reserve left the mortgage market March 31, 2010, analysts said that mortgage rates would rise by a half-percent or more. It was practically stated as fact on TV. When April 1 came around, though, rates didn't rise.

Instead, a volcano erupted and mortgage rates dropped on safe haven buying.

Then, a week later, as the volcano ash cleared, mortgage rates were supposed to resume their rise. Only they didn't. Instead, a debt crisis emerged in the Eurozone and mortgage rates dropped.

Since March 31, conforming mortgage rates are lower by roughly 0.125 percent, according to Freddie Mac's weekly mortgage rate survey. At today's rates, the savings are roughly $20 per month per $200,000 borrowed -- or $100 per month based on their original, post-March 31 forecast.

It brings us to one of the most important axioms in rate shopping: You can't shop for good luck.

On some days, rates go higher
On some days, rates go lower
On some days, rates stay the same

Occasionally, there are days when rates do all three.

As a home buyer or would-be refinancer, what rate you get depends on at what time of day you do your shopping.

You can't predict what will happen next in mortgage markets -- even just an hour from now. Therefore, the smartest move, sometimes, is just lock your rate now. At least that way, you've got a guarantee.

5.10.2010

Latest From : Atlanta RE 5 by 5

What's Ahead For Mortgage Rates This Week : May 10, 2010

Posted: 10 May 2010 07:45 AM PDT

Non-Farm Payrolls May 2008-April 2010 Mortgage markets improved to their best levels of 2010 last week, aided by events half a world away and ongoing safe haven buying. Greece's debt problems continue to help mortgage rate shoppers around the country.

Conventional mortgage rates dropped last week, ARMs falling more than fixed. FHA mortgage rates also improved.

Global concern for the Greece Situation are so strong that markets even shrugged off April's blowout job report. On most other days, mortgage rates would soar on better-than-expected jobs data -- especially coming out of a recession.

The Department of Labor's April Non-Farm Payrolls reports:

Payrolls have been net positive for 4 straight months
Nearly 600,000 jobs have been created thus far in 2010
Monthly job growth posted its biggest gain in 4 years in April

Additionally, more than 800,000 Americans re-entered the workforce in April in search of work. As a result, the Unemployment Rate jumped by 0.2 percent -- another positive sign (in a roundabout way).

But again, Wall Street wasn't watching jobs -- Wall Street was watching Greece. And Greece was in riot.

This week, without much new data due on the economy, mortgage markets should continue to take cues from Greece, the IMF and the Eurozone. If a bailout agreement can be reached that investors feel is effective, the safe haven buying that's led rates lower will recede and mortgage rates should rise.

Conversely, if an agreement is reached that investors deem ineffective, or no agreement is reached at all, mortgage rates should drop.

Each week for the last four weeks, we've talked about Greece and its pending bailout and how it might impact rates because each week the bailout appears imminent. Even this week, the market opens with the news that the IMF has approved a $40 billion lifeline to Greece. Maybe this will be the news that finally turns the mortgage market around.

Mortgage rates are unnaturally low right now and should change direction quickly. The problem is nobody knows when that will happen so be careful when rate shopping and keep an eye on the market.

Mortgage rates may fall further, but when they turn higher, they're going to turn quickly.

5.09.2010

Mortgage Rates Atlanta Daily Rate Lock Recommendation - 05/09/2010

There are four pieces of relevant economic news scheduled for release this week in addition to two important Treasury auctions, but one report stands out above the others. The four reports will be posted over two days, meaning the markets will have to rely on factors others than economic news for direction several days. There is no relevant data due tomorrow or Tuesday, so expect the stock markets to help drive bond trading and mortgage rates those days.

March's Goods and Services Trade Balance report will be released early Wednesday morning. This report gives us the size of the U.S. trade deficit but likely will not have much of an impact on the bond market or mortgage pricing. It is expected to show a $40.0 billion trade deficit, but it is the least important of this week's data and likely will have little impact on Wednesday's mortgage rates.

The Treasury will hold a 10-year Note sale Wednesday and a 30-year Bond sale Thursday. Results of the a uctions will be posted at 1:30 PM ET each day. If they are met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding in the sale could lead to higher mortgage pricing those afternoons.

The remaining three economic reports will be released Friday morning. The first is the most important piece of data of the week. April's Retail Sales will be released at 8:30 AM ET. It is an extremely important report for the financial markets since it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so this data can have a pretty significant impact on the markets. Current forecasts are calling for a 0.2% increase in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower Friday morning. However, a larger increase could fuel fears of economic growth that would l ead to bond selling and higher mortgage rates.

The second report of the day is April's Industrial Production. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.6% increase in production, indicating that manufacturing activity is growing. A smaller than expected increase in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is not as strong as thought.

The last report of the week is May's preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend, which relates to the importance of consumer spending. This report usually has a moderate impact on the financial markets though. It is expected to show a reading of 73.5, which would be a little higher than last month's final reading. If it shows a decline in consumer confidence, bond prices c ould rise and mortgage rates would move slightly lower, assuming the Retail Sales data does not give us a significant surprise.

Overall, it likely will be another active week for mortgage rates, but probably not as much as last week was. Besides the week's important economic news, look for the stock markets to be a major influence on trading. The most important day of the week is Friday with three reports on the agenda, including the sales data. But I would not be surprised to see a particularly active day tomorrow, especially if the stock markets post sizable gains or losses. Accordingly, please be attentive to the markets if still floating an interest rate.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place o ver 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2010

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