Mortgage Rate Indicators for Dallas

Market Comment - Week of July 26th, 2010
Mortgage bond prices rose last week pushing mortgage interest rates lower. Higher than expected weekly jobless claims and continued claims helped mortgage interest rates remain very favorable. Higher than expected existing home sales and leading economic indicators data prevented rates from improving dramatically. Stocks remained volatile, which also resulted in some mortgage interest rate volatility.

Rates fell by about 1/8 of a discount point for the week.

The most important data will be the gross domestic product and employment cost index. The Treasury auctions may also result in mortgage interest rate volatility as foreign appetite for US debt instruments is gauged.




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Economic Factors
Economic Indicator Release Date Time Consensus Estimate Analysis
New Home Sales Monday, July 26, 2010 Up 12.6% Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
Consumer Confidence Tuesday, July 27, 2010 51.5 Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
2-year Treasury Note Auction Tuesday, July 27, 2010 None Important. $38 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Durable Goods Orders Wednesday, July 28, 2010 Up 1.25% Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates.
5-year Treasury Note Auction Wednesday, July 28, 2010 None Important. $37 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
7-year Treasury Note Auction Thursday, July 29, 2010 None Important. $29 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Fed "Beige Book" Thursday, July 29, 2010 None Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Q2 Advance GDP Friday, July 30, 2010 Up 2.5% Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.


Fed "Beige Book"

The Fed "Beige Book" is a summary of economic conditions from each of the 12 Federal Reserve regional districts. The release takes place eight times a year approximately two weeks ahead of each of the Federal Open Market Committee meetings. The report is used at the FOMC meetings, which tends to be one of the most influential events in the market.

Market participants are continually attempting to determine what FOMC interest rate policy will be ahead of the next meeting. Any deviation from expectations usually results in extreme short-term market volatility. The timing of the "Beige Book" provides analysts a valuable look at one of the many factors the FOMC consider.