Daily Commentary by Larry Baer: The January Durable Goods Orders report was
somewhat of a "mixed bag" with a soft transportation component
created by a sharp decline in aircraft orders offset by a notable pick-up in
business equipment orders. Mortgage investors largely shrugged off the
slightly better than expected report - but they will undoubtedly keep a sharper
eye on the data in coming months -- with another strong gain for ex.
transportation durable goods orders almost sure to put some upward pressure on
mortgage interest rates.
The government will
auction $29 billion of seven-year notes later today - the final sale of $99
billion in new debt offered this week. Foreign investors are expected to
be stronger bidders at this auction than they have been over the past couple of
months -- driven in large part by revived concerns related to the survivability
of the single currency European Union. If so, decent demand at today's
Treasury note auction should prove supportive of the prospects for steady to
perhaps fractionally lower mortgage interest rates. The auction will
conclude at 1:00 p.m. ET and I'll post the result on my website as soon as
possible once the final gavel falls.
As they do every
Wednesday, the Mortgage Bankers of America have released their Mortgage
Application Survey for the week ended February 22nd. For the
third straight week, mortgage application activity fell. The composite
index declined by 3.8%. Refinance application volume retreated by 3.3%
and purchase application traffic was 5.2% lower. For the week, refinance
applications accounted for 77% of all applications and 72% of the perspective
loan volume.
The contract rate
for 30-year fixed rate conforming mortgages fell by 1 basis point to
3.77%. The interest rate is 10 basis points higher from four weeks ago,
but still 30 basis-points lower from the year ago mark.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
