Mortgage bond prices finished the week higher which put downward pressure on rates. The market showed slow steady improvements throughout the week. Stocks were volatile but looked to post gains for the shortened trading week. The Fed continued their billion-dollar daily MBS purchases and effectively erased the losses from the prior week. The data was mixed. NAHB housing was 83 vs the expected 86. Weekly jobless claims were 900K vs the expected 865K. Housing starts were a strong 1669K vs 1575K. The Philadelphia Fed manufacturing index was 26.5 vs the expected 12 reading. Existing home sales were 6.76M vs the expected 6.55M. Mortgage interest rates finished the week better by approximately 1/8 to 1/4 of a discount point.
BUSY WEEK
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Consumer Confidence | Tuesday, Jan. 26, 10:00 am, et | 88.8 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| Durable Goods Orders | Wednesday, Jan. 27, 8:30 am, et | Up 0.9% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| Fed Meeting Adjourns | Wednesday, Jan. 27, 2:15 pm, et | No rate changes | Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting. |
| Q4 Advance GDP | Thursday, Jan. 28, 8:30 am, et | Up 4.4% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Leading Economic Indicators | Thursday, Jan. 28, 10:00 am, et | Up 0.5% | Important. An indication of future economic activity. A smaller increase may lead to lower rates. |
| New Home Sales | Thursday, Jan. 28, 10:00 am, et | 877K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Personal Income and Outlays | Friday, Jan. 29, 8:30 am, et | Down 0.3%, Down 0.1% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, Jan. 29, 8:30 am, et | Up 0.2% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Q4 Employment Cost Index | Friday, Jan. 29, 8:30 am, et | Up 0.4% | Very important. A measure of wage inflation. Weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment | Friday, Jan. 29, 10:00 am, et | 81.3 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
HIGHER RATES
Economic data is the number one reason mortgage interest rates move daily. Data is compiled from numerous sources and comes in two flavors, economic growth and inflation. Some releases are more important than others and thus are more likely to cause wider swings in mortgage rates. Rates move in relation to the deviation from expectations. We have significant releases all week. The potential for mortgage interest rate volatility is greater as a result. Volatility can be the enemy, so caution is key.