Government Shutdown May Affect Loan Originations, But Rates Are Lower
Wednesday, October 2, 2013 • 8:20am
Mortgage rates moved downward last week as the market continued to absorb the Fed's decision not to taper QE3. Comments from some Fed officials also provided additional insight that the Fed could delay tapering until next year. Economic news for the week was mixed with new, single-home sales rising 7.9% in August while Consumer Sentiment declined to 77.5, its lowest level in 5 months
A government shut down this week may interfere with government loan originations. HUD rolled out a contingency plan that will allow them to continue insuring loans with a limited staff. Regardless of what happens, the debt ceiling needs to be raised by October 15. In addition to the employment report due out on Friday, this week we get the ISM Manufacturing Survey and Factory Orders, both are expected to be up based on consensus estimates. The more uncertainty from Washington, the more likely mortgage rates will move lower.
Key Dates to Watch:
•October 1 - Exhaustion of Treasury accounting man oeuvres
•November 1 - Funds run out to pay for scheduled non-dept expenses
•November 15 - Lack of funds to pay interest on Treasury coupons
This column takes a look at current mortgage rates, market trends and indexes. Jon Lamkin is Vice President of Mortgage Lending for Guaranteed Rate, 322 Route 46 W Suite 170 • Parsippany, NJ • 07054. He may be reached at 973.939.8661 / firstname.lastname@example.org / www.guaranteedrate.com/jonlamkin
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