Daily Commentary by Larry Baer: The number of Americans filing first-time claims
for government jobless benefits fell 41,000 to a seasonally adjusted 410,000
during the week ended November 17th -- generally inline with
most analysts expectations. The few mortgage investors still at their
desk showed little reaction to the data.
A separate report
from the Mortgage Bankers of America showed applications for home mortgages
eased a bit last week. The MBA's overall loan demand index fell 2.2%
during the survey period, its sixth decline over the past seven weeks.
The pace of refinance requests fell 3.2% while the number of purchase money
mortgage applications gained 2.7%, its second consecutive weekly improvement.
Refinance
applications accounted for 80.7% of all applications and 76.8% of the
prospective loan volume.
The contract rate
for 30-year fixed-rate conforming mortgage rose by 2 basis-points to
3.54%. The interest rate is 9 basis-points lower from four weeks ago and
69 basis-points lower from the year ago level.
Looking ahead to
next week - Uncle Sam will be in the credit markets during the middle three
days conducting a three-part auction with the intent of raising $99
billion. First on the auction block will be Tuesday's $35 billion
offering of 2-year notes, followed by Wednesday's sale of $35 billion of 5-year
notes and the process will wrap up on Wednesday when the final gavel falls on
$29 billion of 7-year notes. All three securities are expected to draw
decent demand from domestic and foreign investors alike. If so, this
auction process will not likely influence the current trend trajectory of
mortgage interest rates one way or the other.
The macro-economic
calendar will feature Thursday morning's revised third-quarter Gross Domestic
Product number. The calendar will also include Wednesday's October new
home sales numbers as well as last month's personal income and spending figures
on Friday. The latter two reports will take a distant backseat to
Thursday's report on the pace of economic growth for the period running from
July through September. Analysts are anticipating economic activity
accelerated rather sharply during the period - pushing Q3 GDP up from the
originally reported 2.0% growth rate to 2.8%. If this assessment proves
accurate -- look for mortgage investors to become increasingly hesitant to push
mortgage interest rates lower through the balance of the year.
Trading activity in
the mortgage market continues to fade rapidly in the run-up to tomorrow's
Thanksgiving Holiday. Interaction between buyers and sellers will likely be
exceptionally sparse during Friday's shortened trading session as well.
Expect unusual and erratic swings in your investors' rate sheets prices during
this period of time - particularly with respect to prices -- and less so with
respect to rates.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
