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| Mike Hanrahan is a Mortgage Specialist with Plaza Mortgage in St Louis. |
Market Comment
Mortgage bond prices traded within a narrow range last week leaving mortgage interest rates near unchanged. Trading was relatively quiet throughout most of the week with some up and down movements Friday following consumer price index and consumer sentiment data. Core CPI rose 0.2%, as expected. Consumer sentiment indicated inflation expectations are moderating which bodes well for bonds.
For the week, interest rates on government and conventional loans were near unchanged.
The Fed meeting Wednesday will be the most important event this week. While no rate change is expected, the comments released following the meeting will be carefully scrutinized for future Fed actions. Producer price index, housing starts, and leading economic indicators will also be important.
LOOKING AHEAD
|
Economic
Indicator |
Release
Date & Time |
Consensus
Estimate |
Analysis
|
| Producer Price Index |
Tuesday, Sept. 19,
8:30 am, et |
Up 0.2%,
Core up 0.3% |
Important. An indication of inflationary pressures at the producer level. Weakness may lead to lower rates. |
| Housing Starts |
Tuesday, Sept. 19,
8:30 am, et |
Down 2.5% |
Important. A measure of housing sector strength. Larger than expected decreases may lead to lower rates. |
| Fed Meeting Adjourns |
Wednesday, Sept. 20,
2:15 pm, et |
No rate change |
Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. |
| Leading Economic Indicators |
Thursday, Sept. 21,
10:00 am, et |
Down 0.2% |
Important. An indication of future economic activity. A larger decrease may lead to lower rates. |
| Philadelphia Fed Survey |
Thursday, Sept. 21,
12:00 pm, et |
None |
Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
Mortgage Professionals
Obtaining a mortgage is often a confusing task that can also lead to frustration. The reason for the confusion is due to the fact that mortgage financing is complex. The good news is that this complexity provides consumers with options and choices best suited to fit their needs.
Every person’s financial position is unique. Some people have large cash reserves that can be used for down payments while others want to get into a home with little or no money down. Credit ratings vary from person to person. In addition, future plans vary. Some people plan on staying in their home for the rest of their lives while others only plan on staying for a few years.
These facts alone make comparing your mortgage to your neighbor’s based on rate alone a flawed endeavor, yet many people attempt to do so. Admittedly, everyone wants a good deal. Keep in mind that comparing rates is just one component of the entire mortgage. Other variables include the term, down payment requirements, income qualifications, credit ratings, reserve requirements, current debt, prepaid points, and many more.
A mortgage professional is able to take all of these variables that are unique to each individual and help a person obtain the mortgage loan that works best for their situation. The service they provide is time consuming and complex. However, the rewards of dealing with a professional carry forward throughout a borrower’s life. Making wise financial decisions today helps to pave the way for a safe and secure future.
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