Texas mortgage rates have moved slightly lower today. Dallas, Houston, Austin, San Antonio, and College Station interest rates are just slightly higher than there lowest point so far this year. If you are looking to purchase or refinance your Texas home, now would be an excellent time to lock in a low interest rate.

Trading activity in the mortgage market is very limited this morning. There is little in the way of major economic data on the agenda this week and next so it appears many market participants have decided to take some time-off through the end of the month. Be aware that thin trading conditions can produce extremely volatile price action.

Tomorrow morning’s 8:30 a.m. ET release of the July Producer Price Index will draw the attention of the traders still at their desk. The headline measure of price pressure at the wholesale level will likely be discounted heavily due to the fact that oil prices have declined roughly 23.0% since reaching a high of $147.27 on July 11^th, 2008. Attention will be primarily focused on the core producer price index, a value that excludes the more volatile food and energy components. A core producer price index reading of 0.2% will probably generate nothing more than a sigh of relief from investors while a July core PPI gain of 0.3% or more – will likely create a major “Maalox moment” for many investors – who will respond to the longer-term implications of rising core wholesale inflation pressure by choosing to defensively nudge mortgage interest rates higher. 

It appears that skyrocketing energy prices during the first-half of the year will have bled into core wholesale inflation – pushing the July number 0.3% or more higher. If my assessment is accurate, mortgage interest rates will be vulnerable to a short-term trend reversal to fractionally higher levels.

As always, If you have ever have a question on whether it is the best time for you to refinance your Texas home loan or what interest rate you can get when buying your next Texas home, feel free to give us a call or shoot us an email by filling in your information on the right hand side of this page.

Concerns about sagging global economic growth has contributed to another surge in the value of the dollar on the world’s currency exchanges.

The dollar index, which tracks the value of the dollar against the currencies of most industrialized nations, rose to its highest level since February this morning, marking its eight straight day of gains. The rising dollar prompted more selling of key commodities like gold and oil. Crude oil fell about $1.00 per barrel despite concerns over supply disruptions created by the Russia-Georgia conflict.

The main factor in all of this from a mortgage market perspective is that one of the biggest headwinds facing the prospect for lower Texas mortgage interest rates, commodity stoked inflation pressures, may start to fade to nothing more than a modest breeze in coming months.

The firming dollar and a increasing expectation among investors that the Federal Reserve will not likely hike short-term interest rates this year will likely benefit stocks more than bonds, as capital seeks the highest possible return in relation to accepted risk tolerances.

The longer-term good news for the prospect of steady to fractionally lower Texas mortgage interest rates is that the developing fundamental shift in the global economy will likely do nothing but increase the attractiveness of dollar-denominated assets like notes, bonds and mortgage-backed securities for foreign investors. Foreign capital resources in our domestic credit markets have essentially been relegated to the sidelines over the past three-years as the value of the dollar suffered a major tailspin. In my judgment, the value of the dollar is very vulnerable to additional near-term floundering at lower levels — before a sustained uptrend begins in earnest.

With little else in the way of other significant economic news for the balance of the day — the trend trajectory of Texas mortgage interest rates will likely be most influenced by stock and oil price action. Higher stock/oil prices will probably drag Texas mortgage interest rates higher while lower stock/oil prices will tend to be supportive of steady to fractionally lower Texas rates.

As always, If you have ever have a question on whether it is the best time for you to refinance your Texas loan or what interest rate you can get when buying your next Texas home, feel free to give us a call or shoot us an email by filling in your information on the right hand side of this page.

Texas mortgage rates have moved slightly lower today. Dallas, Houston, Austin, San Antonio, and College Station interest rates are just slightly higher than there lowest point so far this year. If you are looking to purchase or refinance your Texas home, now would be an excellent time to lock in a low interest rate.

The Labor Department reported this morning that new claims for jobless benefits for the week ended August 2^nd grew by 7,000. A federal program to extend unemployment benefits to cushion the impact of a slowing economy distorted last week’s headcount according to a department spokesman. He said it was not possible to estimate what percentage of the increase in jobless benefit claims could be blamed on the extended benefits program, but he warned the jobless data will likely be skewed for the next six weeks or so as a result. The overall story here is that the labor sector remains weak and as long as this condition exists the Fed will be hesitant to push short-term interest rates higher, a positive for prospects of steady to perhaps fractionally lower mortgage interest rates ahead.

While the weekly initial jobless claims data was mortgage market friendly news it was countered by a report from the National Association of Realtors that showed their index of pending home sales was up 5.3% in June. A sharply improved performance from a decline of 1.0% most economists had been looking for. The index, which measures the number of purchase contracts signed during the month, was strongest in the South with a gain of 9.3% followed by a gain of 4.6% in the West, a 3.4% improvement in the Northeast and a 1.3% gain in the Midwest. One month does not make a trend – but it is a hopeful sign that perhaps the worst of the housing crunch is behind us. As the realtors said contract signings “appear to broadening.” The realtor group is expressing guarded optimism that the fragile momentum building in the pace of home sales will grow as the impact of the massive new housing bill begins to be felt in the coming months. 

Uncle Sam will be in the credit market today looking to borrow $10 billion in the form of 30-year bonds. From a technical perspective I see reason to believe a modest rally in the credit markets (including mortgages) may develop as fixed-income investors breathe a sigh-of-relief that the heavy round of incoming supply from the government is finally out of the way. Let’s see what happens following the conclusion of the 30-year bond auction this afternoon at 1:00 p.m. ET

Uncle Sam will be in the credit market today looking to borrow $10 billion in the form of 30-year bonds. From a technical perspective I see reason to believe a modest rally in the credit markets (including mortgages) may develop as fixed-income investors breathe a sigh-of-relief that the heavy round of incoming supply from the government is finally out of the way. Let’s see what happens following the conclusion of the 30-year bond auction this afternoon at 1:00 p.m. ET

The Federal Open Market Committee members have begun their one day monetary policy meeting. Their deliberations will conclude at 2:15 p.m. ET with the public announcement of their decision with respect to short-term interest rate levels and the release of the post-meeting statement explaining why they choose a particular course of action. The Texas mortgage market will likely trade very quietly with little change in note rates or investor prices until the Fed’s monetary policy position for the next six weeks is known.

Most analysts firmly believe that persistent job losses, strained financial conditions and a weak housing market leave central bankers little choice other than to leave their benchmark fed funds rate and discount rate unchanged. The Fed will likely tweak the language of their post-meeting statement to reinforce the idea that their next move will be to push short-term interest rates higher to ward off developing inflation pressures. As former Fed Governor Lyle Gramley said, “The Fed wants to be sure they do not give the impression that somehow they have lost their concern over inflation.”

So far this year some members of the Federal Open Market Committee have dissented with the majority’s decision to either cut short-term interest rates or – as in June – to leave the benchmark interest rates unchanged. Many observes believe the number of members voting for a rate-hike may grow this time around with Philadelphia Fed President Plosser and/or Minneapolis Fed President Stern joining Dallas Fed President Fisher in calling for a rate hike. These three are not likely to prevail but the growing number of voices on the Committee calling for a rate hike will not do much for fixed-income investor confidence.

Investor appetite for tomorrow’s $17 billion 10-year note auction and Thursday’s $10 billion 30-year bond offering will likely be very limited. A condition (should it develop) that will not bode well for the prospects of lower Texas mortgage note rates through the end of the week.

The Institute of Supply Management said its index of activity in the service sector shrank slightly in July – but by less than most economists had expected. The index posted a reading of 49.5 in July, higher than June’s mark of 48.2, but still below the 50.0 level (considered the demarcation point between a sector that is expanding and one that is contracting). Investors gave this data little more than a passing glance – as they await the outcome of the much more important Federal Open Market Committee meeting this afternoon.

As always, If you have ever have a question on whether it is the best time for you to refinance your Dallas mortgage rate or what interest rate you can get when buying your next Texas home, feel free to give us a call or shoot us an email by filling in your information on the right hand side of this page.

The much anticipated July nonfarm payroll numbers are in … and they are … essentially a nonevent as far as Texas mortgage investors are concerned.

The Labor Department reported this morning that July nonfarm payrolls shrank by 51,000 jobs while the national jobless rate rose to 5.7% from 5.5% in June. The department revised the nonfarm payroll headcount for both May and June, saying job loss in May amounted to 42,000 rather than the originally reported 62,000 loss while the number of jobs lost in June was actually 51,000 rather than the initially reported loss of 62,000.

As usual the media is breathlessly reporting that the national jobless rate has now reached its highest level in four-years — when it was 5.5% in July 2004. Why not report that the national jobless rate is only 1.5% higher today than in was in 1999 — when it was at its lowest level since 1969. To put all of this chatter into a completely different perspective consider the fact that the national jobless rate in July 2003 – a year of record setting mortgage production — was 5.6%. I don’t know about you – but somehow today’s reported bump to a national jobless rate of 5.7% just doesn’t seem all that dramatic to me. And as you can tell by the early price action in the mortgage market – it doesn’t mean much to mortgage investors either.

In a separate report the Institute of Supply Management said its index of national factory activity edged down to a reading of 50.0 from 50.2 in June. Most economists had been anticipating a July reading of 49.3. Detail in this report showed that inflation pressures subsided a little – but remain at relatively high levels – a condition that will likely impede any sustained move to lower levels for mortgage interest rates.

Today’s reports are broadly consistent with other data that shows the economy remains stalled, not growing much – but then again not contracting much either.

Looking ahead to next week the Federal Open Market Committee will meet in a one-day session on Tuesday to set monetary-policy for the next six-weeks. It is unlikely they will make any change to short-term interest rates – but traders will likely be jittery up and through this meeting anyway – particularly if Monday’s June core personal consumption expenditure index (a part of the June Personal Income and Spending report and one of the Fed’s favorite measures of inflation at the consumer level) post a reading above 0.2%. Just to make things really interesting Uncle Sam will be in the credit markets on Wednesday and Thursday looking to borrow record setting sums of money in the form of 10-year notes and 30-year bonds.