Todays Rates: Purchase - 30 Year Fixed: 3.125%   APR: 3.221%     15 Year Fixed: 2.375%   APR: 2.494%      30 Year Fixed High Balance: 3.375%   APR: 3.424%      15 Year Fixed High Balance: 2.625%   APR: 2.709%          Refinance - 30 Year Fixed : 3.250%   APR: 3.317%     15 Year Fixed: 2.500%   APR: 2.584%      30 Year Fixed High Balance: 3.500%   APR: 3.529%      15 Year Fixed High Balance: 2.750%   APR: 2.871%

The Casil Report, a Financial Commentary on the Mortgage Markets – February 16, 2016

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Good afternoon,

Today, Tuesday (02/16/16): The 10 Year Treasury Yield rose to 1.78%, meaning generally higher mortgage rates than Friday.
– The February 2016 NAHB (National Association of Homebuilders) Housing Market Index dropped to an Index Level of 58 (Index Level of 61 during the previous month), coming in lower market expectations (Index Level of 60). This month’s drop in the NAHB Housing Market Index, mostly due to builder concerns regarding a lack of available lots and workers for new construction, could be a sign of future weakness in the U.S. housing market.
– The February 2016 Empire (New York) Manufacturing Report rose to an Index Reading of -16.6 (-19.4 Index Reading during the previous month); however, it came in much worse than market expectations (-9.9 Index Reading). This month’s continued slowdown in manufacturing activity, due to added slowdowns in new manufacturing orders, shipments, and employment, is a negative indicator for the New York region’s manufacturing portion of the economy. 
Here are the U.S. Market Data / Releases for the rest of week that could drive treasury yields / mortgage rates up or down:
Wednesday (02/17/16): PPI (Wholesale Inflation), Housing Starts / Building Permits, Industrial Production, FOMC (Fed) Minutes
Thursday (02/18/16): Weekly Jobless Claims, Philadelphia Fed Manufacturing Index
Friday (02/19/16): CPI (Consumer Inflation)
Read Stephen Casil’s forecast for 2016: 2016 Mortgage & Housing Outlook
Here is a recap of the major economic and political data / reports from the prior week (an increasing 10 Year Treasury Yield means generally higher mortgage rates and vice-versa):
Monday (02/15/16): The 10 Year Treasury Yield remained even at 1.75%.
– No major U.S. economic reports were released this day due to the Presidents Day Holiday.
Friday (02/12/16): The 10 Year Treasury Yield rose to 1.75%.
– January 2016 U.S. Retail Sales increased by 0.2% (0.2% increase during the previous month), meeting market expectations (0.2% increase).  Excluding gasoline and auto sales, retail sales rose 0.1% from the prior month.  This rise in retail sales was due to increase in consumer spending in general merchandise stores and e-commerce retailers.  Overall, this gain in retail sales might lead to a pickup in U.S. economic growth, since approximately 70% of U.S. GDP consists of consumer spending. 
– The February 2016 U.S. Michigan Consumer Confidence Sentiment dropped to an Index Level of 90.7 (92.0 Index Level during the previous month), coming in lower than market expectations (Index Level of 92.7).  This month’s drop in consumer confidence, due to decreases in both the current conditions and expectations portions of this report, could be a negative signal for future U.S consumer spending and economic growth.
Thursday (02/11/16): The 10 Year Treasury Yield dropped to 1.64%.
– U.S. Weekly Jobless Claims dropped to a 269K reading this week (285K during the previous week), coming in lower than market expectations (280K).  In addition, the less volatile, four week moving address for jobless claims  also dropped, to a to 281K level. This continued low level of jobless claims shows a continued decline in Americans filing for unemployment insurance, which is a very positive indicator for continuing recovery of the U.S. Labor Market. 
Wednesday (02/10/16): The 10 Year Treasury Yield dropped to 1.71%.
– The January 2016 U.S. Treasury Budget showed a U.S. government surplus of $52.2 Billion, which is a huge increase from the prior month (-$14.4 Billion U.S. government deficit).  The major reason for this month’s government surplus was due to continued additional tax revenue stemming from an improving U.S. economy.
Tuesday (02/09/16): The 10 Year Treasury Yield dropped to 1.73%.  
– The December 2015 JOLTS Job Openings Report showed that there were 5.61 Million job openings this month, which is an increase from the 5.35 Million job openings the prior month.  This report shows that the number of available jobs rose this month, which could be a positive sign for the U.S. Labor Market.
– December 2015 U.S. Wholesale Inventories decreased by 0.1% (0.4% decrease during the previous month), coming in slightly lower than market expectations (no change).  This month’s slight drop in wholesale inventories shows that U.S. wholesalers are keeping lower inventory levels due to possible decreased confidence that they will sell all of their products, which could be a negative sign for future U.S. economic growth. 
Thank you,

Stephen Casil
Vice President
Secondary Marketing Manager

To learn more about Stephen Casil, please click here


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