Monday March 27 Home Loan Market

This week brings us the release of five monthly and quarterly reports for the bond market to digest in addition to another Federal Open Market Committee (FOMC) meeting. Two of those reports can be considered less important than the others, but the primary focus of the week will be Fed Chairman Bernanke's first FOMC meeting. There is no data scheduled for releas e tomorrow or Wednesday, meaning all of this week's reports will be posted over three days.

The first report of the week is important to the bond market and mortgage rates. This is March's Consumer Confidence Index (CCI) late Tuesday morning, which gives us an indication of consumers' willingness to spend. The Federal Reserve and bond traders watch this data closely because consumer spending makes up two-thirds of our economy. If this report shows that confidence is falling, it would indicate that consumers are more apt to delay making large purchases. If the report reveals that confidence looks to be growing, we may see bond traders sell, pushing mortgage rates higher Tuesday morning. Current forecasts are calling for a small increase to 102.0 from February's 101.7 reading.

The FOMC meeting is expected to bring another quarter-point hike to key short-term interest rates. What is more likely to cause volatility in the markets is the post-meeting statement. Sin ce this is the first meeting under new Chairman Bernanke, traders will be looking for a change in the language of the statement. Traders are hoping to pick up an indication of future Fed moves, particularly when the Fed will end its long running campaign of rate increases. The meeting is the first of two this year that last two days and will adjourn at 2:15 PM ET. Therefore, look for afternoon changes in rates Tuesday.

The next relevant data is Thursday's final revision to the 4th Quarter GDP. This is the second and final revision to January's preliminary reading and is expected to show a slight upward revision of 0.1% from the 1.6% increase that was posted last month. Analysts are now more concerned with next month's preliminary reading of the 1st quarter than data from three to six months ago, so I don't expect this report to affect mortgage rates.

There are three pieces of data scheduled for release Friday. The first is February's Person al Income & Outlays report. This data helps us measure consumers' ability to spend and current spending habits, which is important to the mortgage market because of the influence that consumer spending related information has on the financial markets. If a consumer's income is rising, they are more likely to make additional purchases. This raises inflation concerns and has a negative affect on the bond market and mortgage rates. Current forecasts are calling for a 0.4% rise in income and no change in spending.

The second report is comes from the University of Michigan at 9:45 AM ET. Their revision to the March consumer sentiment index will give us an indication of consumer confidence, which hints at consumers' willingness to spend just as Tuesday's Consumer Confidence Index did. It is expected to show a slight upward revision to 87.0.

February's Factory Orders is the last relevant data due to be posted this week. It is similar to last week's Du rable Goods Orders release, except that this report includes orders for both durable and non-durable goods. Unless it varies greatly from forecasts, I suspect that it will be a non-event in the mortgage market.

Overall, look for Tuesday to be the most important day, not only for having the CCI released, but also the FOMC meeting. There is little doubt in my mind that we will see a fairly significant change in mortgage rates this week, but the question is which direction they will move. I believe that the key is the Fed's comments Tuesday afternoon. Also, possible wildcards are the 2 year and 5 year Note auctions. If they are met with good demand and the Fed gives us favorable news, we should see mortgage rates move lower considerably this week.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place b etween 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Monday March 27 Home Loan Market

Charlotte Home Loan And Mortgage Tips

This and many other free tips on the Charlotte mortgage process and offering are compliments of Lee Sharpe of STS Financial Corporation.

STSFC is a Charlotte Mortgage and Home Loan firm located in beautiful Huntersville, NC providing professional services to the greater Carolinas. STSFC services areas such as Huntersville, Mooresville, Davidson, Lake Norman, Charlotte, University City, Matthews, Rock Hill and Concord North Carolina.