Mortgage Commentary for Today’s New Hampshire Mortgage Rates
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This week bring us the release of only three monthly reports that are relevant to the bond market and New Hampshire mortgage rates, but two of them are considered to be highly important. In addition to those three reports, we also will get the minutes from the last FOMC meeting that have the potential to influence the markets and possibly New Hampshire mortgage rates and the Fiscal Cliff issue will be center stage the first part of the week.
There is nothing of importance scheduled for tomorrow, so look for Fiscal Cliff headlines to drive trading. The bond market will close at 2:00 PM ET tomorrow in observance of the New Year’s Day holiday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed Tuesday for the holiday and will reopen Wednesday morning for regular hours.
The first report of the week is the Institute for Supply Management’s (ISM) manufacturing index for December late Wednesday morning. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. That indicates manufacturing sector strength rather than contraction. Analysts are currently expecting to see a 50.5 reading in this month’s release, meaning that sentiment strengthened from November’s 49.5. A smaller reading will be good news for the bond market and mortgage shoppers, while a higher than expected reading could lead to higher New Hampshire mortgage rates Wednesday morning as it would point towards economic strength.
Also Wednesday is the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they won’t affect the markets or New Hampshire mortgage rates until afternoon hours. I don’t suspect this particular set of minutes will cause too much concern or excitement because the last FOMC meeting was followed by revised Fed forecasts and a press conference by Chairman Bernanke.
Friday morning has the final two releases. The first comes at 8:30 AM when the Labor Department will post December’s employment figures. The Employment report is arguably the most important monthly release we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a decline in payrolls and earnings would be ideal news for the bond market.
Current forecasts call for a 0.1% rise from November’s unemployment rate of 7.7%, 150,000 new jobs added to the economy and an increase in earnings of 0.2%. If we see weaker than expected results, New Hampshire mortgage rates should improve Friday. However, stronger than expected readings will likely raise optimism about the economy, pushing New Hampshire mortgage rates sharply higher.
The Commerce Department will post November’s Factory Orders data late Friday morning. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted late last week, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see an increase of 0.3% in new orders. This report generally does not have a huge impact on the bond market or New Hampshire mortgage rates, but it can influence bond trading enough to create a minor change in rates. However, since it follows the almighty Employment report, it will likely be a non-factor in Friday’s mortgage pricing.
Overall, the key data of the week will be Friday’s Employment report, but look for Wednesday to be active also due to the ISM report. We also have the Fiscal Cliff issue coming to a head early this week. As mentioned last week, I don’t believe we will get a permanent resolution as that would indicate a functional Congress, but they will probably work a temporary patch that will alleviate the avert the consequences for the time being. Either way, a temporary or permanent resolution will likely fuel a stock rally and cause bond prices to move lower and New Hampshire mortgage rates to jump higher. On the other hand, more of the same old finger-pointing in Washington could lead investors to move funds into bonds and away from stocks.
Rate Lock Advice for Today’s New Hampshire Mortgage Rates
If I were considering purchasing or refinancing a home and predicting likely New Hampshire mortgage rates, I would…
Lock if my closing was taking place within 7 days…
Lock if my closing was taking place between 8 and 20 days…
Float if my closing was taking place between 21 and 60 days…
Float if my closing was taking place over 60 days from now….
This is only a general opinion of what I would do if I were considering whether to lock or float today’s New Hampshire mortgage rates based on the current mortgage market. Your individual situation may be different. Contact me if you would like advice for your particular circumstances.
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