Daily Mortgage Rate Lock Advisory

This week will be interesting for the bond market and mortgage rates. There are six economic reports scheduled for the financial and mortgage markets to digest, but only one of them is considered to be of high importance to the markets. But with data being posted all but one day of the week, we may see some fluctuations from day to day in mortgage pricing.

The first report of the week comes tomorrow morning with the release of June’s Leading Economic Indicators (LEI) at 10:00 AM. This Conference Board index attempts to measure economic activity over the next three to six months. While it is not a factual report, it still is considered to be of relative importance to the bond market. It is expected to show a 0.1% increase, meaning that we may see a slight increase in economic activity over the next few months. A decline in the index would be good news for the bond and mortgage markets.

The Federal Reserve will release its Beige Bo ok report Wednesday afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. With Fed Chairman Ben Bernanke’s testimony last week, I don’t think we will see any significant surprises in this report, and therefore will likely not cause much movement in mortgage rates Wednesday afternoon.

There are two housing sector related releases scheduled for Thursday and Friday, but I don’t think they will have much of an impact on the bond market or mortgage rates. June’s Existing Home Sales will be posted Thursday while New Home Sales will be released Friday. I would expect that other reports or factors will drive bond trading and mortgage pricing much more than these will.

Friday brings us the release of two of the week’s most important reports. The first will come from the Commerce Department when they will post June’s Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a gain of 0.1% after showing little change in new orders during May. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. These are products that are expected to last at least three years. A stronger than expected number may lead to higher mortgage rates Friday morning. If it reveals a smaller than expected rise or a decline, mortgage rates should drop Friday.

Also being released Friday is the final revision to July’s University of Michigan Index of Consumer Sentiment. Unless we see a drastic revision to the preliminary estimate, I think the markets will probably shrug this news off.

Overall, this is a moderately significant week for the bond market and mortgage rates. If we get weaker than expected economic results, we may see mortgage rates move low er for the week. However, stronger than expected results will likely lead to higher rates for the week. We also have a 5-year Treasury Note auction Thursday that may influence bond trading but will also give us an indication of investor appetite for bonds. Generally speaking, despite the lack of a data-packed calendar, I would still maintain 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… Float 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.

Thursday’s bond market has opened in negative territory as stocks continue their upward move and inflation concerns make bonds less attractive to investors. Yesterday’s rally in bonds seem to be carrying over into this morning’s trading with the Dow up 58 points and the Nasdaq up 7 points. The bond market is currently down 5/32, which with yesterday’s late selling will likely push this morning’s mortgage rates higher by approximately .500 of a discount point compared to yesterday’s morning rates.

The minutes from the last FOMC meeting did raise some concern in the bond market yesterday and helped fuel the stock rally. Some of excerpts included indications that the Fed’s next move would likely be an increase to key short-term interest rates rather than another rate cut. This means that the Fed is more worried about inflation than a slowing economy. Since inflation erodes the value of a bond’s future fixed interest payments, this news sent mortgage related bon ds lower and mortgage rates higher.

Today’s only relevant data was June’s Housing Starts report that surprised many by showing an increase in starts of new homes. It was expected to show another decline in starts. However, this data is not considered to be of high importance and has not had much influence on today’s trading or mortgage pricing.

The Labor reported that 366,000 new claims for unemployment benefits were filed last week. This was an increase from the previous week, but not as high as analysts had expected. However, since this data tracks only a week’s worth of claims it also hasn’t affected mortgage rates this morning.

There is no relevant economic data scheduled for release tomorrow, meaning that stocks will likely heavily influence bond trading and mortgage rates. With this week’s volatility, we could see traders adjust portfolios ahead of the weekend. That could lead to further volatility in bonds and mortgage rates agai n tomorrow.

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… Float if my closing was taking place between 21 and 60 days… Float 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.

Wednesday’s bond market has opened in negative territory again after this morning’s economic data revealed stronger than expected readings. The stock markets seem to be having little reaction to the news with the Dow up 4 points and the Nasdaq nearly unchanged. The bond market is currently down 15/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point.

The big news this morning was June’s Producer Price Index (PPI) from the Labor Department. They reported that the overall CPI reading rose 1.1% while the core data rose 0.3%. Both of these readings exceeded forecasts, indicating that inflationary pressures were more of a threat at the consumer level of the economy than many had thought.

June’s Industrial Production data was also released this morning. It showed an increase in output at U.S. factories, mines and utilities of 0.5%. This was much stronger than the 0.2% increase that was expecting, m eaning manufacturing activity was higher than thoughts. This is considered bad news for the bond market and mortgage rates.

Part two of Fed Chairman Bernanke’s testimony on the economy is being made to the House Financial Services Committee. I am not expecting his words to impact bonds or rates this morning unless something in the question and answer portion surprises us.

The minutes from the last FOMC meeting will be posted later today. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting. I am not expecting to see a change in rates as a result of them, but a possibility does exist.

Tomorrow’s only relevant data is June’s Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a smal l decline in new starts of housing projects. However, I don’t see this data having a much of an impact on mortgage rates tomorrow unless it varies greatly from forecasts.

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… Float if my closing was taking place between 21 and 60 days… Float 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.

Tuesday’s bond market has opened in positive territory again as the volatility in stocks continues. The stock markets are in negative territory with the Dow down 106 points and the Nasdaq down 28 points. The bond market is currently up 18/32, which likely improve this morning’s mortgage by approximately .250 of a discount point.

The Labor Department gave us June’s Producer Price Index (PPI) this morning, saying that prices rose 1.8% last month. This exceeds the 1.3% increase that was forecasted. However, the core data reading of 0.2% that excludes more volatile food and energy prices fell short of forecasts. This means that food and energy prices spiked more than expected, but since core prices did not rise as much as thought that data is being considered favorable for bonds.

June’s Retail Sales report was also released today, showing a 0.1% increase in sales when analysts had predicted a 0.4% rise. This was lower than expected and indicates tha t consumers are being more frugal than thought. That is good news for bonds because consumer spending makes up two-thirds of the U.S. economy.

Fed Chairman Bernanke’s testimony before the Senate Banking Committee this morning did not reveal any significant surprises. He indicated there was concern about the housing market along with energy costs and their impact on the economy, saying that they could drag on the economy the remainder of the year. He will likely repeat the same testimony tomorrow before the House Financial Services Committee. I am not expecting his words to impact bonds or rates tomorrow unless something in the question and answer portion surprises us.

Tomorrow brings us the release of June’s Consumer Price Index (CPI). It is a mirror of today’s PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.7% increase in the overall index a nd a 0.2% rise in the core data. The core data is considered to be the key reading because it excludes more volatile food and energy prices, giving us a more stable measure of inflation. Higher than expected readings could raise inflation fears and push mortgage rates higher tomorrow.

June’s Industrial Production data will also be posted tomorrow morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.2% rise in production, indicating that the manufacturing sector showed moderate growth during the month. A smaller than expected increase would be good news and could help push mortgage rates slightly lower tomorrow.

Also worth noting is the release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release tomorrow, especially if they show some divisiveness by its members durin g discussion and voting at the last meeting.

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… Float if my closing was taking place between 21 and 60 days… Float 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.

Monday’s bond market has opened in positive territory following early stock losses. The stock markets are kicking the week off with the Dow down 72 points and the Nasdaq down 8 points. The bond market is currently up 16/32, but we will likely still see an increase in mortgage rates of approximately .250 of a discount point as investors digest the news of the Fed supporting Fannie Mae and Freddie Mac.

This week brings us the release of six important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.

The first piece of data comes tomorrow mo rning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 1.3% increase in the overall reading and a 0.3% rise in the core data reading. The bond market should react quite favorably to weaker than expected readings, but a bigger than expected jump in the core reading could send mortgage rates higher tomorrow.

June’s Retail Sales report will also be posted tomorrow. The Commerce Department is expected to say that sales at retail establishments rose 0.3% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.

Fed Chairman Bernanke will speak before the Senate Banking Committee tomorrow morning and the House Financial Services Committee Wednesday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns. This should create a great deal of volatility in the markets during the testimony and the question and answer session that follows. If he indicates that inflation is still a point of concern, we will likely see the bond market tank and mortgage rates rise.

Overall though, I think we will see the most movement in mortgage pricing this week tomorrow or Wednesday due to the release of the inflation related indexes and Mr. Bernanke’s testimony those days. It will likely be an active week for mortgage rates with a fair amount of volatility, so please maintain contact with your mortgage professional if still floating an interest ra te.

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… Float if my closing was taking place between 21 and 60 days… Float 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.

This week brings us the release of six important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.

The first piece of data comes Tuesday morning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 1.3% increase in the overall reading and a 0.3% rise in the core data reading. The bond market should react quite favorably to weaker than expected readings, but a bigger than expected jump in the core reading could send mor tgage rates higher Tuesday.

June’s Retail Sales report will also be posted Tuesday. The Commerce Department is expected to say that sales at retail establishments rose 0.3% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.

Next on tap is Wednesday’s release of June’s Consumer Price Index (CPI). It is a mirror of Tuesday’s PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.7% increase in the overall index and a 0.2% rise in the core data. The core data is considered to be the key reading of both the PPI and CPI because they exclude more volatile food and en ergy prices, giving us a more stable measure of inflation. Higher than expected readings could raise inflation fears and push mortgage rates higher both days.

June’s Industrial Production data will also be posted Wednesday morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.2% rise in production, indicating that the manufacturing sector showed moderate growth during the month. A smaller than expected increase would be good news and could help push mortgage rates slightly lower Wednesday.

Also worth noting about Wednesday is the release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting.

Fed Chairman Bernanke will speak before th e Senate Banking Committee Tuesday morning and the House Financial Services Committee Wednesday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns. This should create a great deal of volatility in the markets during the testimony and the question and answer session that follows. If he indicates that inflation is still a point of concern, we will likely see the bond market tank and mortgage rates rise.

Thursday’s only relevant data is June’s Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a small decline in new starts of housing projects. However, I don’t see this data having a much of an impact on mortgage rates Thursday unless it varies greatly f rom forecasts.

Overall though, I think we will see the most movement in mortgage pricing this week on Tuesday or Wednesday due to the release of the inflation related indexes and Mr. Bernanke’s testimony those days. This weekend’s news of Fed support of Fannie Mae and Freddie Mac will likely help stocks, but I am not sure of how the bond and mortgage markets will react to that news. I suspect it will be taken as positive news, but it will be interesting to see if it has a significant influence on mortgage pricing. Regardless, even without that turn of events, it will likely be an active week for mortgage rates with a fair amount of volatility.

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… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is o nly 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.

Friday’s bond market has opened well in negative territory despite significant stock losses. The major stock indexes are falling as investors fear that mortgage giants Fannie Mae and Freddie Mac are on the brink of collapse, renewing housing and credit concerns. The Dow is currently down 199 points while the Nasdaq has fallen 35 points. The bond market is currently down 18/32, but this morning’s mortgage rates will likely show little change following yesterday’s closing activity.

Neither of today’s economic reports were that important to the markets. The first of the two showed that the U.S. trade deficit fell to $59.8 billion in May when it was expected to rise. The University of Michigan Index of Consumer sentiment for July came in at 56.6. This was a slight increase from June’s final reading when it was expected to fall nearly a point. That means that consumers were more optimistic about their own financial situation than many had thought, which is considered a negative for bonds and mortgage rates.

Despite the difference between forecasts and actual results, this morning’s economic data really has played little part in the market’s direction today. Concerns that the government may need to take over or bail out Fannie and Freddie is the source of today’s volatility. It’s hard to say whether this will end up being a positive or negative for mortgage rates. But it is a fairly safe bet that we will see plenty of volatility in the markets are public comments made, news releases are posted and the almighty rumor mill kicks into high gear. Accordingly, be careful if still floating an interest rate.

Next week brings us plenty of important economic news for the markets to digest. Some of the key reports will give us inflation readings at the producer and consumer level of the economy and retail level sales from last month, along with the minutes from the last FOMC meeting. However, none of these rel eases come until the middle and latter part of the week so I am expecting the stock markets and related news to be a major influence on bond trading and mortgage rates the first couple of days. 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… Float if my closing was taking place between 21 and 60 days… Float 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.

Wednesday’s bond market has opened relatively flat yet again, which seems to be the norm lately. The stock markets are following suit with the Dow and Nasdaq both down a couple of points. The bond market is currently up only 1/32, but due to strength in bonds late yesterday we should see an improvement of .250 – .375 of a discount point in this morning’s mortgage rates.

There is no relevant economic news scheduled for release again today. I am expecting the stock markets, and possibly oil prices, to continue to be the biggest influence on bond trading the rest of the day. If the major stock indexes remain near current levels, mortgage rates will likely follow suit. However, if stocks or oil moves significantly, we likely will see a shift in bond trading and possibly mortgage pricing.

I am remaining on the cautious side, particularly in the short-term outlooks. I think there is more likelihood of seeing bonds fall and mortgage rates move higher in the immediate future than there is of them improving much. Accordingly, I am holding the lock recommendations for immediate and short-term closings.

The first piece of economic news that may affect mortgage rates is tomorrow weekly unemployment figures from the Labor Department. Analysts will be paying a little more attention to this week’s release than usual because last week’s report showed that claims had crossed above 400,000 the previous week. This is an important benchmark that will be watched closely. Last week’s numbers didn’t get much attention because they were posted at the same time as June’s monthly Employment report. But with little data scheduled for release this week, I believe more focus will be made on tomorrow’s report than usual. Current forecasts are calling for approximately 395,000 new claims to have been filed.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 da ys… Lock if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float 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.