Pending home sales rise 4.3 percent in August:
The number of people who signed contracts to buy homes rose in August for the second straight month. The National Association of Realtors said Monday that its seasonally adjusted index of sales agreements for previously occupied homes rose 4.3 percent to a reading of 82.3.
These positive figures help alleviate many industry onlookers’ post-Tax Credit concerns.
Congress Extends Higher Loan Limits:
Congress has extended a policy that was due to expire that allows for higher loan limits. The maximum size of loans guaranteed by Fannie Mae, Freddie Mac and the Federal Housing Administration will now run through the end of 2011.
The higher loan limits of nearly $730,000 are designed to continue to drive growth in the more expensive, or higher cost areas like New York and San Francisco. The vast majority of homes do not fall into one of the designated “high cost” areas, loan limits for those homes will remain at $417,000.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +6 basis points last week causing 30 year fixed rates to decrease from the previous week. We had a very volatile week with price swings of 53 basis points on some days. In the end, we closed out the week very close to where we started. The MBS market reacted favorably to some U.S. Treasury auctions which enjoyed some very strong demand. The market also moved upward on weaker than expected ISM Manufacturing data.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date | ET | Release | For |
| 4-Oct | 10:00 | Factory Orders | Aug |
| 4-Oct | 10:00 | Pending Home Sales | Aug |
| 5-Oct | 10:00 | ISM Services | Sep |
| 6-Oct | 7:00 | MBA Mortgage Application | 1-Oct |
| 6-Oct | 8:15 | ADP Employment Change | Sep |
| 6-Oct | 10:30 | Crude Inventories | 2-Oct |
| 7-Oct | 8:30 | Initial Claims | 2-Oct |
| 7-Oct | 8:30 | Continuing Claims | 25-Sep |
| 7-Oct | 15:00 | Consumer Credit | Aug |
| 8-Oct | 8:30 | Nonfarm Payrolls | Sep |
| 8-Oct | 8:30 | Nonfarm Private Payrolls | Sep |
| 8-Oct | 8:30 | Unemployment Rate | Sep |
| 8-Oct | 8:30 | Hourly Earnings | Sep |
| 8-Oct | 8:30 | Average Workweek | Sep |
| 8-Oct | 10:00 | Wholesale Inventories | Aug |
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
