Daily Mortgage Rate Lock Advisory

Tuesday’s bond market has opened in fairly flat following the release of mixed economic news. The stock markets are also relatively calm with the Dow up 20 points and the Nasdaq nearly unchanged. The bond market is close to yesterday’s closing level, which should keep this morning’s mortgage rates unchanged from yesterday.

The more important of today’s two releases was the Conference Board’s Consumer Confidence Index (CCI) late this morning. It showed a reading of 56.9 that was higher than forecasts had called for. This means that consumer sentiment was stronger this month than thought, which is bad news for bonds and mortgage rates.

July’s New Home Sales data was also posted this morning, revealing fewer home sales than analysts had thought. This indicates that the new construction portion of the housing industry continues to weaken. However, this data is not considered to be of high importance to the markets or mortgage rates.

The final release of the day is the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members. It will be interesting to see some of the Fed member’s views on the economy and inflation and if they will hint what the Fed’s next move may be. If mortgage rates will be influenced by this, it will come during late afternoon trading.

The Commerce Department will post July’s Durable Goods Orders tomorrow morning, giving us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big ticket items, or products that are expected to last three or more years. A weaker reading than the expected 0.1% rise that is expected would indicate that the manufacturing sector is not as strong as thought. This would be good news for bonds and should lead to lower mortgage rates.

If I were considering fi nancing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Float 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 after the stock markets kicked the week off in selling mode. The stock markets are showing fears of the banking crisis after another bank failed over the weekend. This has the Dow down 127 points and the Nasdaq down 34 points. The bond market is benefiting as investors seek safe-haven in bonds. This has pushed the bond market up 28/32, which will likely improve this morning’s mortgage rates by .125 - .250 of a discount point.

Today’s only economic data was July’s Existing Home Sales report that showed a larger increase in home resales than was expected. This could be considered bad news for bonds and mortgage rates, however, this data is not considered to be of high importance to the markets. Therefore, the stock losses are influencing bond trading more than this data is.

The Conference Board will post this month’s Consumer Confidence Index (CCI) at 10:00 AM tomorrow. This index measures co nsumer willingness to spend, which is important because consumer spending makes up two thirds of the U.S. economy. A decline would indicate that consumers may not be making large purchases in the immediate future. That sign of economic weakness should drive bond prices higher, leading to lower mortgage rates tomorrow. It is expected to show a reading of 53.0, which would be an increase from July’s 51.9.

Also scheduled for release tomorrow is July’s New Home Sales data. This report is the least important release of the week. It will give us an indication of housing sector strength and mortgage credit demand like Monday’s Existing Home Sales report does and also usually doesn’t have a major impact on bond prices or mortgage rates.

The third and final event for tomorrow is the release of the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show so me divisiveness by its members. It will be interesting to see some of the Fed member’s views on the economy and inflation and if they will hint what the Fed’s next move may be.

Overall, it is a shortened week and will probably be a very busy week for mortgage rates. The bond market is expected to close at 2:00 PM ET Friday ahead of the Monday holiday. We will likely see the most activity in rates tomorrow morning, but Wednesday and Thursday are also important. If we manage to get weaker than expected results in the key reports and the Fed minutes don’t show any surprises, we should see mortgage rates close the week lower than tomorrow’s opening levels.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Float 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… T his 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 eight relevant economic releases for the bond market to watch. This will also be a shortened week in the bond market as a result of the Labor Day holiday next Monday. This makes it quite likely that we will see a fair amount of volatility in the financial markets this week, and therefore quite possibly mortgage rates.

Tomorrow brings us the first piece of data for the markets to digest with July’s Existing Home Sales. The National Association of Realtors will release this report, giving us a measurement of housing sector strength. It covers approximately 85% of home sales in the U.S., but usually does not have a major influence on bond trading and mortgage rates unless it varies greatly from analysts forecasts. It is expected to show a small increase from June’s sales.

The Conference Board will post this month’s Consumer Confidence Index (CCI) at 10:00 AM Tuesday. This index measures consumer wi llingness to spend, which is important because consumer spending makes up two thirds of the U.S. economy. A decline would indicate that consumers may not be making large purchases in the immediate future. That sign of economic weakness should drive bond prices higher, leading to lower mortgage rates Tuesday. It is expected to show a reading of 53.0, which would be an increase from July’s 51.9.

Also scheduled for release Tuesday is July’s New Home Sales data. This report is the least important release of the week. It will give us an indication of housing sector strength and mortgage credit demand like Monday’s Existing Home Sales report does and also usually doesn’t have a major impact on bond prices or mortgage rates.

The third and final event for Tuesday is the release of the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members. It will be interesting to see some of the Fed member’s views on the economy and inflation and if they will hint what the Fed’s next move may be.

The Commerce Department will post July’s Durable Goods Orders Wednesday morning, giving us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big ticket items, or products that are expected to last three or more years. A weaker reading than the expected 0.2% rise that is expected would indicate that the manufacturing sector is not as strong as thought. This would be good news for bonds and should lead to lower mortgage rates.

Thursday’s only data is the first revision to the 2nd Quarter Gross Domestic Product (GDP). Last month’s preliminary reading revealed a 1.9% pace of growth. A smaller than expected upward revision should help lower mortgage rates Thursday, especially if the inflation portion of t he release does not get revised higher. Current forecasts are calling for a 2.7% annual rate. There will be a final revision issued next month, but it probably will have little impact on mortgage rates.

Friday is also a multi-release day with the release of July’s Personal Income and Outlays and the University of Michigan Index of Consumer Sentiment posting. The income and spending data measures consumer ability to spend and current spending habits. It is expected to show a decline of 0.1% in income and a 0.3% increase in spending. Weaker than expected numbers would be good news for the bond market and mortgage rates.

August’s revision to the University of Michigan’s Index of Consumer Sentiment is also due Friday morning. It gives us a measurement of consumer willingness to spend. It is expected to show an upward revision from August’s preliminary reading of 61.7. If it revises lower, consumers were less confident about their perso nal financial situations than previously thought. This would be good news for the bond market and mortgage rates.

Overall, it is a shortened week but probably will be a very busy week. The bond market is expected to close at 2:00 PM ET Friday ahead of the Monday holiday. We will likely see the most activity in rates Tuesday morning, but Wednesday and Thursday are also important. If we manage to get weaker than expected results in the key reports and the Fed minutes don’t show any surprises, we should see mortgage rates close the week lower than tomorrow’s opening levels.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Float 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.

Friday’s bond market has opened in negative territory following a strong open in stocks. The stock markets are posting sizable gains during morning trading with the Dow up 180 points and the Nasdaq up 22 points. The bond market is currently down 9/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

There is no relevant data scheduled for release today, but Fed Chairman Bernanke did make a speech this morning at a conference in Wyoming. In it he implied that the problems in the credit markets may not be over and that they will continue to affect the economy. He added that the drop in oil prices was encouraging and should help ease inflation concerns.

Generally speaking, his words did not come as a surprise to many. They did however, help some to push back their estimated date of a Fed rate increase. Many had predicted the Fed would raise rates sometime this fall to help control inflationa ry pressures, but now feel that the increase may not come until the first half of next year. But, today’s negative open in bonds is more a result of the stock gains than his speech.

Next week has a fairly busy calendar with economic data scheduled for release each day. None of the reports are considered to be extremely important, but a couple of them are important enough to affect mortgage rates if their results differ from forecasts. The week starts off fairly light with July’s Existing Home Sales report late Monday morning. It is one of the least important reports of the week, but since it is the only one scheduled for that day we may see enough of a reaction in the markets to affect mortgage pricing if it varies greatly from forecasts.

It appears there are seven reports scheduled for release next week that are worth watching, in addition to the minutes from the last FOMC meeting. Look for more details on next week’s events in Sunday’s weekly p review.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Float 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.