Philadelphia Mortgage Advisors Blog

Plymouth Meeting, PA 19462

Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Department of Banking & Securities, NJ Department of Banking and Insurance, the State of DE and the Florida Office of Financial Regulation. NMLS #128570.

Consumers Remain Highly Confident

There were two main influences on mortgage rates over the past week. The canceled vote on the health care bill was positive for mortgage rates, while an impressive rise in consumer confidence was negative. The offsetting effects resulted in mortgage rates ending the week a little lower.

Last week, President Trump was unable to gather enough votes to pass the health care bill and the vote was canceled late Friday afternoon. This increased investor concerns about Trump's ability to deliver his business friendly policy changes in other areas. Policies which stimulate growth are good for the economy, but they raise the outlook for future inflation. Investors had pushed mortgage rates higher in anticipation of his policy changes. As a result, reduced expectations were good for mortgage rates.

Tuesday's report on Consumer Confidence from the Conference Board showed an enormous increase to the highest level in a decade. Solid gains were seen in optimism about both present and future economic conditions. Higher confidence levels generally lead to increased future economic activity, so this data was broadly applauded, but it was not good for mortgage rates.

Encouraging news in the housing sector continued this week. In February, the Pending Home Sales index rose 5.5% from January to the second best level in a decade. There are two reports each month which measure sales of previously owned homes. The report on sales of existing homes measures closings during the month, while pending sales measure contracts signed, making the Pending Home Sales data a leading indicator of future closings.

Looking ahead, the important monthly Employment report will be released on Friday. As usual, this data on the number of jobs, the unemployment rate, and wage inflation will be the most highly anticipated economic data of the month. Before that, the ISM national manufacturing index and Construction Spending will be released on Monday. The ADP Employment Change and the ISM national services index will come out on Wednesday.

Mortgage News for the week ended March 24, 2017

Mar 24

3:19

Category | General

Mortgage Time

Mortgage Market News for the week ended March 24, 2017

Compliments of

Philadelphia Mortgage Advisors

Plymouth Meeting, PA 19462

Rates Improve Again

Over the past week, concerns increased about President Trump's ability to deliver pro-growth policy changes as quickly as expected. This was favorable for mortgage rates. The economic data had little impact. Mortgage rates again ended the week lower.

Since the election, stocks have performed very well, while bonds yields have risen. This was due to expected policy changes under the Trump administration which would boost economic growth. Stronger growth is good for the economy and for stocks, but it raises the outlook for future inflation, which is negative for mortgage rates. Over the past week, President Trump encountered resistance to a health care bill. This increased investor concerns about the ease with which Trump will be able to deliver his pro-growth policy changes in areas such as tax cuts, deregulation, and infrastructure spending. As investors questioned whether the policies might be smaller in scale or might take longer to implement, some of the "Trump Trade" reversed this week, which was good for mortgage rates.

The housing sector data released this week revealed that home sales activity remained at very good levels. New homes sold in February rose to the best level in months. Sales of previously owned homes did slip from January's strong pace, but according to the National Association of Realtors, this was due to a shortage of inventory in many regions.

Demand remained very strong. The median time properties were on the market fell to just 45 days in February, down from 59 days last year at this time.

Looking ahead, the outcome of the health care bill vote scheduled for late Friday afternoon might influence mortgage rates. After that, Pending Home Sales will be released on Wednesday. The core PCE price index and Personal Income will come out on Friday. Core PCE is the inflation indicator favored by the Fed. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. There will be Fed speakers every day next week as well.

Mortgage News for the week ended March 17, 2017

Mar 17

3:30

Category | General

Mortgage Time

Mortgage Market News for the week ended March 17, 2017

Compliments of

Philadelphia Mortgage Advisors

Plymouth Meeting, PA 19462

Fed Tightens

For a couple of weeks prior to Wednesday's Fed meeting, comments from Fed officials and stronger than expected economic data caused mortgage rates to rise. The outcome of the Fed meeting was viewed as relatively favorable for mortgage rates, however. Rates reversed some of their rise and ended the week lower.

As widely expected, the Fed raised the federal funds rate by 25 basis points. To explain the Fed's reason for the rate hike, Fed Chair Yellen said that "the simple message is the economy's doing well." According to the statement, another factor was that inflation was "moving close" to the Fed's target level of 2% after falling short for years. Regarding the Fed's massive holdings of mortgage-backed securities (MBS), there was no change in language in the statement, and Yellen said that no decisions about the portfolio had been reached yet. The pace of rate hikes projected by Fed officials remained virtually unchanged from the prior forecasts released in December. Mortgage rates had risen before the meeting on concerns about a faster pace of tightening, so they recovered partly when these fears were not realized.

The recently released data on home building was very encouraging. In February, single-family housing starts and building permits both rose to the highest levels since 2007. In addition, the March National Association of Home Builders (NAHB) housing index showed that home builder confidence jumped to the highest level in over a decade. Increased home building activity is great news for the housing market given the current lack of inventory in many regions.

Looking ahead, more housing data will take center stage during a light week for economic reports. Existing Home Sales will be released on Wednesday, and New Home Sales will come out on Thursday. In addition, Durable Orders, an important indicator of economic activity, will be released on Friday.

Mortgage News for the week ended March 10, 2017

Mar 10

11:52

Category | General

Mortgage Time

Mortgage Market News for the week ended March 10, 2017

Compliments of

Philadelphia Mortgage Advisors