Daily Mortgage Rate Lock Advisory

Daily Rate Lock Recommendation – 06/19/2008 1:01:00 PM EST

Thursday’s bond market has opened in negative territory as interest turns to stocks. The stock markets are currently mixed with the Dow up 16 points and the Nasdaq down a few points. The bond market is currently down 8/32, but we will likely still see an improvement in this morning’s mortgage rates of approximately .125 of a discount point due to strength in bonds late yesterday. The first piece of news released today was last week’s unemployment numbers from the Labor Department. They reported that 381,000 new claims for benefits were filed last week. This was a decline form the previous week, but still higher than the 375,000 that was expected. This can be considered a bit of good news for bonds, but the truth is that this data is generally considered to be of low importance because it tracks only a week’s worth of claims. May’s Leading Economic Indicators (LEI) was released this morning by the Conference Board, who is a New York-based business research group. They said that the indicators rose 0.1%, slightly exceeding forecasts. This means that economic activity is being predicted to rise slightly over the next three to six months. There is no relevant economic news scheduled for release tomorrow, so look for oil prices and stock movement to be the biggest influences on bond trading and mortgage rates. I am expecting to see a fairly quiet day in rates, but still fear there are more increases to mortgage rates likely before we see much of a decline. Therefore, I am holding the lock recommendations. If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond trading, business research group, closing, leading economic indicators, LEI, lock, mortgage rates, negative territory, refinancing a home, stock, stock markets, stock movement, unemployment numbers, week

Daily Rate Lock Recommendation – 06/18/2008 11:10:00 AM EST

Wednesday’s bond market has opened in positive territory following early stock losses. The stock markets are reacting negatively during early trading to some corporate earnings news. This has the Dow down 131 points and the Nasdaq down 32 points. The bond market is currently up 20/32, which should improve this morning’s mortgage rates by approximately .125 – .250 of a discount point. There is no relevant economic news scheduled for release today, so I am expecting to see the stock markets and oil prices be the biggest influences on bond trading and mortgage rates. If the major stock indexes extend their early losses, we could see bond prices rise and mortgage rates move lower. However, if stocks recover, we will likely see bonds suffer and possibly get upward revisions to mortgage rates today. May’s Leading Economic Indicators (LEI) will be posted late tomorrow morning. The Conference Board, who is a New York-based business research group, will post this data. It attempts to predict economic activity over the next three to six months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher tomorrow morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show no change from April to May. We will also get last week’s unemployment numbers from the Labor Department tomorrow morning. Normally these figures are not worth addressing too much, but the previous week’s number of new claims jumped to 384,000, coming close to an important benchmark of 400,000. If last week’s total moved higher, we may see bonds respond favorably. If the number of new claims was below forecasts of 375,000, bonds could move lower tomorrow. This data comes before the LEI and before the other markets open. If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond prices, business research group, closing, corporate earnings, earnings news, leading economic indicators, LEI, lock, lower mortgage, major stock indexes, stock, stock losses, tomorrow, unemployment numbers, upward revisions, week

Daily Rate Lock Recommendation – 06/17/2008 12:49:00 PM EST

Tuesday’s bond market has opened in positive territory after this morning’s economic news showed results that were mostly favorable to bonds. The stock markets are showing losses with the Dow currently down 60 points and the Nasdaq down 4 points. The bond market is currently up 20/32, which should improve this morning’s mortgage rates approximately .250 of a discount point.

The Labor Department gave us today’s first and most important data of the day with the release of May’s Producer Price Index (PPI). It showed a whopping 1.4% increase in the overall index that was higher than expected, however, the more important core data reading matched forecasts of a 0.2% increase. This means that volatile food and energy prices rose more than expected, but that with those figures excluded, price remained close to expectations.

The second was May’s Housing Starts report that showed a lower number of starts than analysts had expected. This is generally good news for the bond market because it gives us an indication of housing sector strength and weak housing has contributed greatly to the economic slowdown. However, this data is not considered to be of high importance to the markets.

The third and final piece of data also showed weaker than expected economic activity. May’s Industrial Production was released mid-morning and revealed a 0.2% decline in manufacturing output. The 0.3% variance between forecasts and the actual reading is fairly large for this report and is contributing somewhat to the bond gains despite the data being considered moderately important.

There is no relevant economic news scheduled for release tomorrow. May’s Leading Economic Indicators (LEI) will be posted late Thursday morning. The Conference Board, who is a New York-based business research group, will post this data. It attempts to predict economic activity over the next three to six months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher Thursday morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show no change from April to May.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond prices, business research group, closing, core data, economic slowdown, leading economic indicators, LEI, lock, producer price index, producer price index ppi, release tomorrow, volatile food

Daily Rate Lock Recommendation – 06/16/2008 12:23:00 PM EST

Monday’s bond market has opened up slightly, following a mixed open in stocks and no relevant economic news scheduled for release today. The Dow is currently showing a 35 points loss while the Nasdaq is up 3 points. The bond market is currently up 3/32, but due to selling in bonds late Friday, we will likely still see an increase of approximately .250 of a discount point in this morning’s mortgage rates.

This week is moderately busy with four economic reports scheduled to be released. Only one of the four is considered to be of high importance to the markets and mortgage rates. The remaining three are of interest to the markets but likely will not cause a large change in mortgage rates unless they vary greatly from forecasts.

Tomorrow brings us the release of three of the week’s four reports. May’s Producer Price Index (PPI) will be the first early tomorrow morning. It helps us measure inflationary pressures at the producer level of the economy and is the sister report to last week’s Consumer Price Index (CPI). There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food and energy prices. A large increase could add fuel to the theory that inflation is a real threat to the economy because the higher prices will likely be passed on to the consumer in the near future. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond’s future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 1.0% in the overall index and a 0.2% rise in the core data.

The second of three reports being posted tomorrow is May’s Housing Starts report. This report gives us a measurement of housing sector strength, but is the week’s least important. It usually doesn’t have a major impact on the bond market or mortgage rates and I see no reason for this month’s results to be any different. Analysts are expecting to see a drop in starts of new homes between April and May.

The third and final piece of data is May’s Industrial Production. This report will be released at 9:15 AM ET. It measures output at U.S. factories, mines and utilities, giving us an important measurement of manufacturing sector strength. If it reveals that production is rising, concerns of manufacturing strength may come into play in the bond market. A decline would indicate that the manufacturing sector is weaker than expected and should help push mortgage rates lower. Current forecasts are calling for an increase of 0.1%.

Overall, look for tomorrow to be the biggest day of the week. Not just because it brings the release of three of the four reports, but because it brings us the PPI that is considered to be a key inflation reading. I am still not sure that we have seen the end of the recent bond selling. Therefore, I am holding the lock recommendations for the time being.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond prices, consumer price index, core data, economic reports, index cpi, inflationary pressures, lock, producer level, producer price index, producer price index ppi, report, tomorrow, U.S., volatile food, week

Daily Rate Lock Recommendation – 06/15/2008 9:17:00 PM EST

This week is moderately busy with four economic reports scheduled to be released. Only one of the four is considered to be of high importance to the markets and mortgage rates. The remaining three are of interest to the markets but likely will not cause a large change in mortgage rates unless they vary greatly from forecasts.

The first report of the week is also the most important. May’s Producer Price Index (PPI) will be posted early Tuesday morning. It helps us measure inflationary pressures at the producer level of the economy and is the sister report to last week’s Consumer Price Index (CPI). There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food and energy prices. A large increase could add fuel to the theory that inflation is a real threat to the economy because the higher prices will likely be passed on to the consumer in the near future. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond’s future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 1.0% in the overall index and a 0.2% rise in the core data.

The second of three reports being posted Tuesday is May’s Housing Starts report. This report gives us a measurement of housing sector strength, but is the week’s least important. It usually doesn’t have a major impact on the bond market or mortgage rates and I see no reason for this month’s results to be any different. Analysts are expecting to see a drop in starts of new homes between April and May.

The third and final piece of data scheduled for Tuesday is May’s Industrial Production. This report will be released at 9:15 AM ET. It measures output at U.S. factories, mines and utilities, giving us an important measurement of manufacturing sector strength. If it reveals that production is rising, concerns of manufacturing strength may come into play in the bond market. A decline would indicate that the manufacturing sector is weaker than expected and should help push mortgage rates lower. Current forecasts are calling for an increase of 0.1%.

May’s Leading Economic Indicators (LEI) will be posted late Thursday morning. The Conference Board, who is a New York-based business research group, will post this data. It attempts to predict economic activity over the next three to six months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher Thursday morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show no change from April to May.

Overall, look for Tuesday to be the big day of the week. Not just because it brings the release of three of four reports, but because it brings us the PPI that is considered to be a key inflation reading. I am expecting to see the least amount of movement in rates tomorrow and Friday, unless the major stock indexes stage a considerable sell off or rally. However, I am still not sure that we have seen the end of the recent bond selling. Therefore, I am holding the lock recommendations for the time being.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, closing, consumer price index, core data, economic reports, index cpi, inflationary pressures, LEI, lock, producer level, producer price index, producer price index ppi, report, Tuesday, U.S., volatile food, week

Daily Rate Lock Recommendation – 06/12/2008 10:39:00 AM EST

Thursday’s bond market has opened down sharply following early stock gains and stronger than expected economic data. The stock markets are rallying during early trading with the Dow up 141 points and the Nasdaq up 24 points. The bond market is currently down 20/32, which will push this morning’s mortgage rates higher by approximately .250 – .375 of a discount point. Limiting this morning’s increase in rates was a strong showing during afternoon trading yesterday. However, this morning’s losses erased those gains and then some. Helping contribute to yesterday’s late rally was the afternoon release of the Fed Beige Book. It showed overall weak economic growth in most regions of the country. It noted that food and energy prices were rising quickly and could help prevent growth in the economy. The downside of that is rising fuel prices can also lead to inflation in other parts of the economy and make it to the consumer level. But, this news, coupled with an eventual loss of over 200 points in the Dow, led to a rally in mortgage-related bonds. Unfortunately, the gains have been wiped out this morning. This morning’s big news was the release of May’s Retail Sales data that showed a 1.0% rise in sales at retail establishments. This was nearly twice the increase that was forecasted and shows that spending was much stronger than expected during the month. The footnote to this reading though is that this was the month that most of the economic stimulus checks went out and their impact is being debated. But another number in the report that also was negative for bonds was an upward revision to April’s sales. They were previously announced as a decline of 0.2%, but today’s report said they actually rose 0.4%. That indicates that sales were stronger than many had thought over the past two months. Also worth noting was a larger than expected number of new unemployment claims filed last week. The Labor Department reported that 384,000 new claims for benefits were filed last week, exceeding forecasts and getting very close to the important benchmark of 400,000. That level is another recessionary sign and could lead to further concerns about the economy that may benefit bonds. There are two reports scheduled for release tomorrow. The first and more important of the two is May’s Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy. This is one of the most important reports we see each month. There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food and energy prices. A large increase could raise fear in the bond market that inflation is a threat. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond’s future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 0.5% in the overall index and a 0.2% rise in the core data. The last report of the week is June’s preliminary reading to the University of Michigan Index of Consumer Sentiment. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. It is expected to show a reading of 59.5. A larger then expected decline in consumer confidence would be considered good news for bonds, however, the CPI report is much more likely to have a bigger impact on the markets than this one will. If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond market, economic stimulus, eventual loss, fed beige book, lock, report, retail establishments, retail sales data, stock gains, stock markets, upward revision

Daily Rate Lock Recommendation – 06/10/2008 11:00:00 AM EST

Tuesday’s bond market has opened in negative territory again as inflation concerns continue to hurt bonds and long-term securities that are sensitive to such issues. The stock markets are mixed with the Dow up 26 points and the Nasdaq down 12 points. The bond market is currently down 18/32, which will likely push this morning’s mortgage rates higher by approximately .375 – .500 of a discount point.

This morning’s only economic data isn’t the cause of today’s negative tone in bonds. April’s Goods and Services Trade Balance report gave us the U.S. trade deficit during that month. It showed a deficit of $60.9 billion that was higher than forecasts had called for. However, this data is not considered to be of high importance to the bond market and mortgage rates and therefore, has not influenced mortgage pricing this morning.

What caused this morning’s weakness was comments by Fed members, including Fed Chairman Bernanke that strongly hinted of a possible rate hike coming before another rate cut. The Fed is obviously concerned about inflation if they are talking rate increases, so mortgage related bonds are reacting negatively because they are extremely sensitive to inflation.

Later today, the Federal Reserve will release its Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it shows slowing economic activity, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing, we could see mortgage rates revise higher this afternoon.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: balance report, beige book, bond, bond market, Chairman Bernanke, closing, Fed, fed chairman bernanke, fomc meetings, inflation concerns, lock, mortgage rates, negative territory, negative tone, rate, refinancing a home, U.S.

Daily Rate Lock Recommendation – 06/09/2008 11:43:00 AM EST

Monday’s bond market has opened down sharply as investors turn away from inflation sensitive investments. The stock markets are mixed by a wide margin with the Dow up 110 points and the Nasdaq down 14 points. The bond market is currently down 30/32, which will likely push this morning’s mortgage rates higher by approximately .250 – .375 of a discount point. I also would not be surprised to see further upward revisions sometime today as the bond market appears likely to continue its selling.

There was no relevant economic news released today. The week’s first but least important data is April’s Goods and Services Trade Balance report tomorrow morning. This report gives us the size of the U.S. trade deficit and will be released at 8:30 AM. It isn’t likely to cause much movement in the markets or mortgage rates, but nevertheless forecasts are expecting to see a $59.5 billion deficit.

Late Wednesday, the Federal Reserve will release its Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it shows slowing economic activity, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing, we could see mortgage rates revise higher Wednesday afternoon.

Overall, it is going to be a fairly busy week for the financial markets. I feel that Friday will be the single most important day of the week with the release of the CPI, but Thursday also is likely to bring significant movement in rates due to the Retail Sales report being released. Accordingly, this would be a very good week to maintain fairly constant contact with your mortgage professional.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: balance report, beige book, bond, bond market, closing, fomc meetings, lock, mortgage rates, refinancing a home, report tomorrow, today, U.S., upward revisions, week, wide margin

Daily Rate Lock Recommendation – 06/06/2008 11:44:00 AM EST

Friday’s bond market has opened in positive territory following the release of interesting employment numbers. The stock markets are reacting negatively to the news with the Dow down 247 points and the Nasdaq down 43 points. The bond market is currently up 17/32, but we will likely see only a .125 of a discount point improvement in this morning’s mortgage rates due to weakness in bonds late yesterday.

The Labor Department gave us this week’s most important data early this morning with the release of May’s Employment numbers. The biggest surprise of the data was a 0.5% jump in the unemployment rate to bring it to 5.5%. This was the largest monthly increase in approximately 22 years, indicating that the employment sector is much weaker than thought. This is very good news for the bond market.

Also considered a positive for bonds was the loss of 49,000 payrolls. Analysts were expecting to see a loss of 60,000 jobs, but this was the fifth consecuti ve monthly decline in payrolls. That note seems to be more important than the 11,000 job variance between the actual and forecasted numbers.

In a bit of negative news, average hourly earnings rose 0.3% during the month, exceeding forecasts of a 0.2% rise. This means that wages rose more than expected, which raises concerns about wage-inflation that can easily spread to other sectors of the economy. Fortunately, the headline unemployment number seems to be the focus of trading this morning.

Next week brings us the release of a couple of important pieces of data. There is no relevant news scheduled for release Monday. Most of the important data will be posted the latter part of the week. Look for more details on next week’s events in Sunday’s weekly preview.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock i f my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: average hourly earnings, employment numbers, employment sector, negative news, point improvement, refinancing a home, sectors of the economy, unemployment number, unemployment rate, wage inflation

Daily Rate Lock Recommendation – 06/05/2008 11:46:00 AM EST

Thursday’s bond market has opened in negative territory again as investors prepare for tomorrow’s big news. Also hurting bonds this morning are sizable stock gains that has the Dow up 128 points and the Nasdaq up 30 points. The bond market is currently down 8/32, which with yesterday’s late sell-off, will push this morning’s mortgage higher by approximately .500 of a discount point compared to yesterday’s morning rates. The only data posted this morning was last week’s unemployment claims. The Labor Department said that 357,000 new claims for benefits were filed last week. This was lower than the 372,000 that was expected and created some concern in the bond market that tomorrow’s monthly report may reveal stronger than expected numbers. The Labor Department will post May’s Employment data early tomorrow morning. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate climb to 5.1% with approximately a loss of 60,000 jobs during the month. A higher than expected increase in the unemployment rate and a larger drop in payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates tomorrow. But, if we see stronger than expected numbers in tomorrow’s results, we will likely see bonds tumble and mortgage rates spike higher. There is little doubt that tomorrow’s news will create volatility in the markets and quite possibly mortgage pricing. Accordingly, proceed with caution if still floating an interest rate. If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now … This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond market, closing, employment data, labor department, lock, lower mortgage, mortgage rates, negative territory, rate, refinancing a home, stock gains, tomorrow, U.S., Unemployment, unemployment rate