Updated on August 20, 2019 10:47:45 AM EDT
Today has nothing scheduled that is of concern to mortgage rates. If there is an intraday revision to mortgage pricing it will likely be a result of a noticeable move in stocks. If stocks extend this morning’s losses, we may see bonds benefit, causing a slight downward revision to rates. On the other hand, if the major indexes erase this morning’s losses, we could see a small upward revision to rates before the end of the day.
Tomorrow has two events that are relevant to the mortgage market. First is Julys Existing Home Sales report at 10:00 AM ET. The National Association of Realtors will release this report, giving us a measurement of housing sector strength. It covers a high percentage of all home sales in the U.S., but usually has a moderate influence on bond trading and mortgage rates unless it varies greatly from analysts forecasts. It is expected to show a slight rise from Junes sales, meaning the housing sector strengthened a little last month. This would generally be bad news for the bond market and mortgage rates because a strengthening housing sector makes broader economic growth more likely. But unless the increase is much larger than current forecasts, the report will likely have a minimal impact on tomorrow’s mortgage pricing.
The second release of the day will come during afternoon hours. That is when we will get the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them following their release. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy, economic growth and the Feds potential plans for lowering key short-term interest rates again. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will be evident during mid-afternoon trading. This is one of those events that can cause significant movement in rates after its release or be a non-factor. Therefore, be prepared for a move, but not surprised if there is no reaction.
©Mortgage Commentary 2019