Staten Island Mortgage Rates Make Move
After 5 straight days of almost no change on average, mortgage rates finally made a move today. Unfortunately, it wasn’t in the direction that most would hope. On a positive note, the deterioration was only seen in the “cost” side of the equation, meaning that you’d likely be quoted the same rate as yesterday afternoon, but with slightly higher closing costs (or lower lender credit, depending on your scenario). As such the most prevalent Conforming 30yr fixed rate remains at 4.125%.
Today’s weakness was almost exclusively a factor of one surprisingly strong piece of economic data. We often talk about the interplay between economic data and rates, focusing mainly on the important employment reports. That’s because the Employment Situation Report is by far and away the most reliable market mover for interest rates when it comes to economic reports.
Other reports can have an impact, but it’s usually smaller and happens less consistently. When it comes to the non-employment-related reports shaking up mortgage rates, it takes a big deviation from the market’s forecast.
In other words: data surveys are a fixture in financial markets. For any major report there will always be 30-80 prominent economists officially registering their predictions for upcoming data. When the data is released, if it’s much stronger or weaker than the forecast, markets react accordingly.
In today’s case, it was the Institute for Supply Management of Chicago with their monthly Purchasing Manager’s Index (or “Chicago PMI” for short) that shook things up. This is a survey of business conditions in the Chicago area, which has proven to be similar enough in composition and economic trends to the entire nation that it has become a well-regarded report.
The problem for mortgage rates is that this well-regarded report moved a whole lot more than it normally does. In fact, this was the biggest jump in over 30 years. Until that point in the day, rates looked poised to drop a bit, but the stronger economic data caused bond markets to weaken, meaning prices fell and rates rose.
Posted on November 1, 2013, in Uncategorized and tagged Best execution, Bond market, Chicago, Conformity, Economic data, Mortgage loan, Purchasing Managers Index, report. Bookmark the permalink. Leave a comment.