<<< back to article list

Mortgage Update from Stuart Crawford 2-6-17


  • +1

Blog by Doug Ingersoll | February 6th, 2017


From Stuart Crawford at VIP Mortgage -
"Over the past week, two major economic reports contained mixed news and had offsetting effects on mortgage rates.  Investors viewed Wednesday's Fed meeting as favorable for bonds and mortgage rates ended the week slightly lower.

The January ISM national manufacturing index was released on Wednesday.  The index rose to 56, which was the highest level since November 2014.  Readings above 50 indicate that the manufacturing sector is expanding.  In addition, data in the report which measures prices paid for raw materials jumped to the highest level in years (which we are seeing with our construction/renovation clients as prices for materials are rising).  Investor concern that this increase may be a signal that broader inflation measures may rise was bad for mortgage rates. 

The earnings data in Friday's Employment report offset some of the fears about future inflation.  With strong wage growth seen in December, investor concerns about wage inflation were elevated heading into the Employment report.  Although the worries were eased as wage growth was far lower than expected.  In January, the annual rate of wage inflation was 2.5%, down from 2.9% as originally reported in December.  Mortgage rates improved on this data.

Investors liked that the statement issued by the Feds contained no surprises.  There was no change in the federal funds rate or in the guidance for the pace of future rate hikes.  Mortgage rates improved following the release of the statement.

This week will be a light one for economic data, and we don’t anticipate much movement."

Office:     480-776-2954Mobile:    602-710-8975Fax:         480-302-8560scrawford@vipmtginc.com         www.TheCrawfordTeamNow.com