Updated on April 16, 2021 10:04:41 AM EDT
The first of this morning’s two economic reports was Marchs Housing Starts at 8:30 AM ET that showed new home groundbreakings jumped 19.4% last month. This was stronger than expected, hinting at strength in the new home portion of the housing sector. It is a sign of economic strength, but this particular report is not considered to be highly important to the bond market and mortgage rates.
This week’s final economic release was the University of Michigans Index of Consumer Sentiment for April at 10:00 AM ET. It came in at 86.5, up from March’s 84.9 but softer than the 88.0 that was expected. The readings show that consumer sentiment is stronger this month than last month, albeit not as strong as expected. That means consumers felt better about their own financial situations than they did last month and are likely to spend more. Because the reading came in lower than predicted, we can consider the data neutral for mortgage rates.
Next week is light in terms of scheduled events that may influence mortgage rates. The first item on the calendar comes midweek and the majority of what is scheduled is housing related. We saw the benchmark 10-year Treasury Note yield break below an important threshold of 1.62% this week despite unfavorable economic news. If it holds below the next few trading days, we could see rates make another move lower. On the other hand, failure to do so is a strong sign rates are about to move higher. Look for details on this and all of next week’s activities in Sunday evening’s weekly preview.
©Mortgage Commentary 2021