Wednesday, March 3, 2010

The private Institute of Supply management reported this morning that their index of service sector activity edged up to a reading of 53.0% in February from 50.5% in January. Readings above 50.0% indicate more firms said business conditions were getter better than said they were getting worse. Mortgage investors did take notice of the improved performance for this economic metric -- but did not move aggressively to nudge mortgage interest rates higher since the overall picture here is one of very modest manufacturing and service sector growth - a condition that tends to be supportive of steady mortgage interest rates.



The Mortgage Bankers of America said their application index, which measures requests for loans to buy homes and to refinance, rose by a seasonally adjusted 14.6% during the week ended February 26th. Purchase applications increased 9.0% while refinancing requests jumped 17.2% higher last week. Refinance requests represented about 69% of all applications taken last week.


Now the consensus forecast among economists in now calling for a drop of 60,000 jobs for Friday's much anticipated headline nonfarm payroll figure -- and an uptick in the national unemployment rate to 9.8% from January's 9.7% mark.


Just yesterday the general view among economists was that Friday's headline nonfarm payroll would show 50,000 more jobs were lost last month than were created. If the consensus forecast proves accurate, this data will tend to be supportive of steady to perhaps fractionally lower mortgage interest rates. In the highly unlikely event the February nonfarm payroll data shows a loss of 10,000 or fewer jobs and/or the national jobless rate posts a reading of 9.7% or lower -- look for mortgage investors to push mortgage interest rates higher from current levels.