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Brentwood TN Real Estate: Finance Market Update Nov. 17th, 2008

Brentwood TN Real Estate

Mortgage bond prices rose last week pushing mortgage interest rates lower. Trading was choppy with thin conditions surrounding the holiday. Continued global economic uncertainty remained the focus. Both stocks and bonds exhibited wild swings. The US Treasury modified the earlier $700 billion bailout plan to strengthen financial institutions that offer credit instead of purchasing troubled sub-prime mortgage assets. The change caused additional uncertainty and debate. For the week, interest rates on government and conventional loans remained nearly unchanged.

The consumer price index Wednesday will be the most important event this week. Producer price index and the Fed minutes also have the potential to result in mortgage interest rate volatility.

Economic Factors
Economic Indicator	Release Date Time	Consensus Estimate	Analysis
Industrial Production	Monday, Nov. 17, 2008	Down 0.1%	Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Capacity Utilization	Monday, Nov. 17, 2008	76.6%	Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.
Producer Price Index	Tuesday, Nov. 18, 2008	Down 1.5%, Core up 0.2%	Important. An indication of inflationary pressures at the producer level. Lower inflation may lead to lower rates.
Consumer Price Index	Wednesday, Nov. 19, 2008	Down 0.8%, Core up 0.2%	Important. A measure of inflation at the consumer level. Lower inflation may lead to lower rates.
Housing Starts	Wednesday, Nov. 19, 2008	Down 4.5%	Important. A measure of housing sector strength. Larger than expected decreases may lead to lower rates.
Fed Minutes	Wednesday, Nov. 19, 2008	None	Important. Details of the last Fed meeting will be thoroughly analyzed.
Leading Economic Indicators	Thursday, Nov. 20, 2008	Down 0.6%	Important. An indication of future economic activity. A smaller increase may lead to lower rates.
Philadelphia Fed Survey	Thursday, Nov. 20, 2008	None	Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.

Volatility Likely

The likeliness of mortgage interest rate volatility this week is very high considering the abundance of important economic releases.

Each piece of data has the ability to cause volatility in the financial markets. Floating ahead of the data exposes a person to a tremendous amount of risk. It is possible for interest rates to improve if the data shows continued weakness in the economy with few price pressures. However, any surprises will likely be bad for mortgage interest rates.

Governmental actions in addition to the economic data continue to weigh upon the financial markets. We are really in uncharted territory here with the wobbly underpinnings of the economy. Credit remains tight, as lending has become more stringent. However, there still remain funds available. Real estate transactions continue to take place despite perceptions to the contrary.

The important thing to remember is that even the Treasury officials trying to shore the economy do not know exactly what the future holds. With this in mind, be cautious during these times of economic uncertainty and be ready to lock in the event interest rates spike higher.
Courtesy Tonya Esquibel WR Starkey Mortgage * Permission to republish*
Brentwood TN Real Estate

Vanessa Stalets
615-957-6333
RE/MAX Elite
615-661-4400

Published Tuesday, November 18, 2008 8:36 AM by Vanessa Stalets

Filed under: Brentwood TN Homes, Brentwood TN Real Estate, Brentwood TN Real Estate , Brentwood TN Homes For Sale, Brentwood TN, Mortgage Rates

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