Mortgage Market Update
This week brings us only three pieces of relevant monthly economic data, none of which are considered to be highly important. That makes it likely that we will see less movement in mortgage rates than last week. The week starts off slow with nothing of relevance set for release today. April's Housing Starts will start the week’s activities early Tuesday morning. This report will give us an indication of housing sector strength and mortgage credit demand by tracking newly issued permits and actual starts of new home construction. It is expected to show an increase in new construction starts from March's reading, hinting at housing sector growth. However, since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts. The second piece of data Tuesday is April's Industrial Production report at 9:15 AM ET. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.3% increase in production, indicating that manufacturing activity strengthened. A decline in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is not as strong as thought. This report is considered to be moderately important, so it will likely need to show unexpected strength or weakness to cause movement in mortgage rates. Thursday has one monthly report scheduled, April's Leading Economic Indicators (LEI) at 10:00 AM ET. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 0.4% increase from March's reading, meaning that economic activity is likely to strengthen over the next few months. A decline would be good news for the bond market and mortgage rates, while a larger increase could cause mortgage rates to inch higher Thursday. Overall, every day is a good candidate for most and least important day of the week. None of this week’s data is likely to cause significant movement in the markets or mortgage rates. That doesn’t mean that we won’t see rate changes, but sizable moves are not expected. Even though this is probably going to be a fairly calm week for rates, it still is prudent to maintain contact with your mortgage professional if closing in the near future and still floating since market conditions can change without notice.