Daily Commentary by Larry Baer: The mortgage market is showing some slight
improvement this morning after the March reading of the Institute
of Supply Management's
Service Sector Index came in weaker than expected. The ISM's service
sector index posted a value of 54.5 versus 56.0 in February -- and well below
the consensus forecast calling for a reading of 55.8. The report's
employment component, closely watched ahead of Friday's March nonfarm payroll
report, fell to a reading of 53.3 form the previous month's mark of 57.2.
The employment component has not been lower since November of last year.
Earlier, the ADP
National Employment Report said private sector employment rose by 158,000 jobs
in March - well below consensus estimate among economists calling for an
employment gain of 200,000.
The collective data
suggests the economy may be finding it harder-than-expected to post notable
growth in the face of across-the-board cuts in the federal budget - a
condition, should it persist, almost sure to add support to the prospects for
steady to perhaps fractionally lower mortgage interest rates ahead.
The Mortgage Bankers
of America reported earlier this morning that their Mortgage Application Survey
composite index for the week ended March 29th fell by 4%.
Though purchase activity marginally improved, a 5.6% slump in refinance demand
weighed on the overall measure. On a four-week moving average basis,
refinance activity has retreated by 1% over the past month, but is higher by
18% from one year ago. Purchase applications have increased by 5.5% over
the past month and have advanced by a little more than 7.0% from the year
earlier mark.
For the week ended
March 29th, refinance applications accounted for 74% of all loan
applications and 68% of the perspective loan volume.
During the week the
contract rate for 30-year fixed-rate conforming mortgages decreased by 3
basis-points to 3.76%. The interest rate is 6 basis-points higher from
four-weeks ago, but 40 basis-points lower from one year earlier.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
