Daily Mortgage Rate Lock Advisory

Rate Lock Advisory – Friday Jan. 30th

Friday’s bond market has opened in positive territory following early stock weakness and mixed economic news. The stock markets are showing sizable losses with the Dow down 154 points and the Nasdaq down 20 points. The bond market is currently up 10/32, but we will still see a sizable increase in this morning’s mortgage rates due to significant weakness in bonds yesterday afternoon. We will likely see an increase of approximately .500 – .625 of a discount point over yesterday’s morning rates.

Today brought us the release of three relevant reports, including the very important preliminary GDP reading that showed a decline of 3.8% during the 4th quarter of last year. This was not as big of a drop as was expected, but was still the largest quarterly decline in 26years. This can be considered bad news for bonds because the drop was not as much as expected, however, it still being the worst quarter since 1982 indicates a weak economy. That generally makes bo nds more attractive to investors and leads to lower mortgage rates. Unfortunately, it was not enough to offset yesterday’s losses or the fact that economy activity was actually stronger than expected.

The 4th Quarter Employment Cost Index (ECI) was also posted this morning, but it came in lower than forecasts. The 0.5% increase compared to the 0.7% that was expected, means that employer costs for wages and benefits did not rise as much as thought. That is good news for bonds because it eases concerns of wage inflation.

The third report was the revised reading to the University of Michigan’s Index of Consumer Sentiment. It showed a reading of 61.2 that was slightly lower than the 61.9 that the preliminary reading showed earlier this month.

Next week is packed with important and relevant economic data for the markets to digest. It begins with December’s Personal Income and Outlays data and January’s Institute for Supply Management’s (ISM) manufacturing index Monday. The week closes with the almighty Employment report Friday morning and in between are several important releases. Look for more details on next weeks 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… 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.

Rate Lock Advisory – Thursday Jan. 29th

Thursday’s bond market has opened in negative territory, continuing yesterday afternoon’s selling. The stock markets are also showing losses as they give back a good portion of yesterday’s gains. The Dow is currently down 154 points while the Nasdaq has lost 36 points. The bond market is currently down 8/32, which will push this morning’s mortgage rates approximately .125 – .250 higher than yesterday’s revised rates. This should equate to approximately .500 of a discount point higher than yesterday’s morning rates.

This morning’s economic data actually gave us favorable results. The Commerce Department said that new orders for big-ticket items, or Durable Goods, fell 2.6% last month. This was a larger than expected decline, but making the news even better was a significant reduction to November’s orders that was revised from down 1.0 to down 3.7%. This means that orders for products that are expected to last or more years were lower than expected. This is considered good news for bonds because it indicates a still weakening manufacturing sector.

December’s New Home Sales report was also posted this morning, revealing a sharp decline in sales of newly constructed homes. The 14.7% drop in December’s sales were the weakest level of sales since records started being kept on them in 1963. This indicates a still softening housing sector that is generally good news for bonds.

There are three reports scheduled for release tomorrow. The first is one of the most important reports that we see regularly. The initial reading of the 4th Quarter Gross Domestic Product (GDP) will be posted early tomorrow morning. This data is so important because it is considered to be the best measure of economic growth. The GDP itself is the total sum of all goods and services produced in the United States. Its’ results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. There are three readings to each quarter’s activity, each released approximately one month apart. The first, which usually carries the most volatility, is expected to be a decrease of 5.4%. A weaker reading would be great news for the bond market, but the 5.4% decline would be the biggest quarterly drop in 26 years.

The 4th Quarter Employment Cost Index (ECI) is also scheduled for release early tomorrow morning. It measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. It usually has more of an effect on the bond market than the stock markets. Current forecasts are showing an increase of 0.7%. A lower than expected reading would be favorable to bonds and mortgage rates, but the GDP reading will be the biggest influence on trading and rates tomorrow morning.

The last report of the week is the revised reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer co nfidence, which is thought to indicate consumer willingness to spend. I don’t see this data having much of an impact on the markets or mortgage rates due to the importance of the employment index and GDP figures. It is expected to show no change from the preliminary reading of 61.9.

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.

Rate Lock Advisory – Wednesday Jan. 28th

WEDNESDAY AFTERNOON UPDATE:

Today’s FOMC meeting adjourned with no change to key short-term interest rates, keeping the benchmark Fed Funds Rate near 0%. The stock markets rallied following the adjournment, pushing the Dow up 200 points and the Nasdaq higher by 53 points on the day. The bond market soured though, driving bond prices lower that pushed yields and mortgage rates higher. Overall, we can expect to see an increase in tomorrow’s mortgage rates of approximately .375 of a discount point unless the morning’s data offsets those losses or pushes them higher.

The post meeting statement did give us some insight into what actions the Fed may take to help boost economic activity since this rate can’t be lowered any further. They indicated that they were ready to buy longer-term government securities such as the 10-year Treasury Note and 30 year Bond if they felt that it would generate lending. This is actually good news as it creates another buyer for all the debt that could some to market to pay for the stimulus package currently being considered. Unfortunately, the statement was not very definitive, more or less saying that it is an option available not a commitment to do so.

The statement also hinted at the Fed’s forecast for the economy, saying that significant risks still remain but that a ?gradual recovery? could begin late this year. In other words they expect the economy to continue to slow for most of the year before slowly rebounding. That is actually fairly favorable news for bonds, but traders apparently were disappointed by the lack of solid details of what the Fed will do, particularly regarding the possibility or likelihood of buying government securities. The result was a weak afternoon for bonds and a likely upward revision to mortgage pricing.

Tomorrow morning brings us the release of December’s Durable Goods Orders. This data helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show a decline in orders of 2.0%. A larger than expected drop would be good news for bonds and mortgage rates.

December’s New Home Sales report, the sister release to Monday’s Existing Home Sales, will be posted late tomorrow morning. It is expected to show another decline in sales of new homes, but is not important enough to heavily influence mortgage pricing.

If I were considering financing/refinancing a home, I would…. Float 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 guaran teed to be in the best interest of all/any other borrowers.

Rate Lock Advisory – Wednesday Jan. 28th

Wednesday’s bond market has opened in positive territory despite early stock gains. The stock markets are currently showing noticeable gains with the Dow up 118 points and the Nasdaq up 41 points. The bond market is currently up 2/32, which with yesterday’s late gains should improve this morning’s mortgage rates by approximately .250 of a discount point.

There is no relevant economic data being released today. Later this afternoon though we will get the results of the year’s first FOMC meeting. It will adjourn at 2:15 PM ET but it is expected to yield no change to short-term interest rates and probably will not heavily influence trading or mortgage rates. Traders will be looking for any indication of the Fed’s next move in the post meeting statement. However, I am not expecting major impact on the markets or mortgage rates because the Fed can’t lower key rates much more. There is little chance of indicating a possible rate hike in the near future, so I do n’t believe that this meeting will have the influence they usually do.

Tomorrow morning brings us the release of December’s Durable Goods Orders. This data helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show a decline in orders of 2.0%. A larger than expected drop would be good news for bonds and mortgage rates.

December’s New Home Sales report, the sister release to Monday’s Existing Home Sales, will be posted late tomorrow morning. It is expected to show another decline in sales of new homes, but is not important enough to heavily influence mortgage pricing.

If I were considering financing/refinancing a home, I would…. Float 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.

Rate Lock Advisory – Tuesday Jan. 27th

Tuesday’s bond market has opened in positive territory after this morning’s economic news failed to give any significant surprises. The stock markets are showing gains during early trading with the Dow up 53 points and the Nasdaq up 15 points. The bond market is currently up 6/32, which will likely keep this morning’s rates near yesterday’s levels.

January’s Consumer Confidence Index (CCI) was posted late this morning, revealing a reading of 37.7. This was a lower than forecasts of a 39.0 reading, but offsetting that favorable news was an upward revision of 0.6% to December’s confidence reading. This means that consumers were more confident in their own financial situations than previously thought in December, but that sentiment has dropped in January. Lower levels of confidence are considered good news for bonds because it usually means consumers are less apt to make large purchases in the immediate future.

There is no factual economic data sc heduled for release tomorrow, but we will get the results of this year’s first FOMC meeting. It will begin tomorrow and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to short-term interest rate, but as is often the case, traders will be looking for any indication of the Fed’s next move. However, I am not expecting this meeting to have a major impact on the markets or mortgage rates because the Fed can’t lower key rates much more. There is little chance of indicating a possible rate hike in the near future, so I don’t believe that this meeting will have the influence they usually do.

The rest of the week is pretty busy with five relevant reports scheduled to be released over Thursday and Friday. There are two on Thursday’s agenda while the most important one comes Friday along with two other moderately important reports. I am expecting to see additional movement in mortgage rates over the next couple of days, so please maintain contact with your mortgage professional.

If I were considering financing/refinancing a home, I would…. Float 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.

Rate Lock Advisory – Monday Jan. 26th

Monday’s bond market has opened in negative territory following stronger than expected economic news and early stock gains. The Dow and Nasdaq are kicking the week off in positive ground with the Dow up 65 points and the Nasdaq up 18 points. The bond market is currently down 9/32, but we will likely see an improvement in this morning’s rates of approximately .125 – .250 of a discount point due to strength late Friday.

There were two reports posted this morning that are somewhat relevant to mortgage pricing. The first was December’s Existing Home Sales from the National Association of Realtors. It showed an unexpected increase of 6.5% in the number of home resales last month, but it also indicated that home prices continue to fall. These are mixed results for the bond market, but since the data is not considered to be of high importance, its impact on this morning’s mortgage rates has been minimal.

December’s Leading Economic Indicators (LEI) was also posted this morning, revealing an increase of 0.3% in the index. This means that the indicators are pointing towards an increase in economic activity over the next three to six months. This is considered bad news for bonds because it was expected to show that economic activity would continue to fall.

Tomorrow morning brings us the release of January’s Consumer Confidence Index (CCI). It is considered to be of high-importance to the bond market and therefore can move mortgage rates. It is an indicator of consumer sentiment, which is important because a decline would be construed as a sign that consumers may be less willing to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, market participants are very attentive to related data. A reading smaller than the expected 39.0 would be ideal for the bond market and mortgage rates.

There is no factual economic data scheduled for release Wednesday, bu t we will get the results of this year’s first FOMC meeting. It will begin tomorrow and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to short-term interest rate, but as is often the case, traders will be looking for any indication of the Fed’s next move. However, I am not expecting this meeting to have a major impact on the markets or mortgage rates because the Fed can’t lower key rates much more. There is little chance of indicating a possible rate hike in the near future, so I don’t believe that this meeting will have the influence they usually do.

Overall, look for tomorrow or Friday to be the biggest days for mortgage rates. Friday’s GDP is the single most important piece of data this week, but we may see quite a bit of movement in rates tomorrow also. If we see weaker than expected results from the most important reports, we should see rates close the week much lower than last Friday’s closing levels. If the data shows stronger than ex pected results, we may see mortgage rates move higher again this week. This is of course, assuming that the Fed meeting doesn’t reveal any surprises. I strongly recommend that fairly constant contact is maintained with your mortgage professional this week if still floating an interest rate.

If I were considering financing/refinancing a home, I would…. Float 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.

Rate Lock Advisory – Sunday Jan. 25th

This week is extremely busy in terms of economic data scheduled for release and will likely be another active week for mortgage rates. The number of releases is actually irrelevant due to the importance of the some of the reports. There are eight economic releases scheduled for the week in addition to the first Federal Open Market Committee (FOMC) meeting of the year. All but two of the releases scheduled are considered to be of moderate or high importance, meaning we should see quite a bit of movement in mortgage rates again this week.

The first report of the week is tomorrow’s release of December’s Existing Home Sales. It gives us a measurement of housing sector strength by tracking sales of newly constructed homes. It is one of the week’s least important reports, therefore, it will likely not have a significant impact on bond trading or mortgage rates. Current forecasts are calling for a small decline in sales.

December’s Leading Economic Indicators (LEI) will also be posted late tomorrow morning. This index attempts to measure economic activity over the next three to six months. It is considered to be of moderate importance to the bond and mortgage markets. Analysts are currently expecting to see a 0.3% decline, meaning that economic growth over the next few months will likely slow. A larger than expected drop would be good news for the bond market and mortgage rates, but an unexpected rise could lead to bond selling and an increase to mortgage rates tomorrow morning.

January’s Consumer Confidence Index (CCI) will be released Tuesday morning. This report is considered to be of high-importance to the bond market and therefore can move mortgage rates. It is an indicator of consumer sentiment, which is important because a decline would be construed as a sign that consumers may be less willing to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, market participants are very attentive to related data. A reading smaller than the expected 38.0 would be ideal for the bond market and mortgage rates.

There is no factual economic data scheduled for release Wednesday, but we will get the results of this year’s first FOMC meeting. It will begin Tuesday and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to short-term interest rate, but as is often the case, traders will be looking for any indication of the Fed’s next move. However, I am not expecting this meeting to have a major impact on the markets or mortgage rates because the Fed can’t lower key rates much more. There is little chance of indicating a possible rate hike in the near future, so I don’t believe that this meeting will have the influence they usually do.

Thursday morning brings us the release of December’s Durable Goods Orders. This data helps us measure manufactu ring strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show a decline in orders of 1.8%. A larger than expected drop would be good news for bonds and mortgage rates.

December’s New Home Sales report, the sister release to Monday’s Existing Home Sales, will be posted late Thursday morning. It is expected to show another decline in sales of new homes, but is not important enough to heavily influence mortgage pricing.

Next up is Friday, which has three reports scheduled for release. The first of them is one of the most important reports that we see regularly. The initial reading of the 4th Quarter Gross Domestic Product (GDP) will be posted early Friday morning. This data is so important because it is considered to be the best measure of economic growth. The GDP itself is the total sum of all goods and services produced in the United States. Its’ results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. There are three readings to each quarter’s activity, each released approximately one month apart. The first, which usually carries the most volatility, is expected to be a decrease of 5.2%. A weaker reading would be great news for the bond market, but the 5.2% decline would be the biggest quarterly drop in 26 years.

The 4th Quarter Employment Cost Index (ECI) is also scheduled for release early Friday morning. It measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. It usually has more of an effect on the bond market than the stock markets. Current forecasts are showing an increase of 0.7%. A lower than expected reading would be favorable to bonds and mortgage rates, but the GDP reading will be the biggest influence on trading and rates F riday morning.

The last report of the week is the revised reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer confidence, which is thought to indicate consumer willingness to spend. I don’t see this data having much of an impact on the markets or mortgage rates due to the importance of the employment index and GDP figures.

Overall, look for Tuesday or Friday to be the biggest days for mortgage rates. Friday’s GDP is the single most important piece of data this week, but we may see quite a bit of movement in rates Tuesday also. If we see weaker than expected results from the most important reports, we should see rates close the week much lower than last Friday’s closing levels. If the data shows stronger than expected results, we may see mortgage rates move higher again this week. This is of course, assuming that the Fed meeting doesn’t reveal any surprises. I strongly recommend that fai rly constant contact is maintained with your mortgage professional this week if still floating an interest rate.

If I were considering financing/refinancing a home, I would…. Float 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.

Rate Lock Advisory – Friday Jan. 23rd

Friday’s bond market has opened in negative territory yet again even with the stock markets mixed. The Dow is currently down 109 points while the Nasdaq is currently up 3 points. The bond market is currently down 17/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

There is no relevant economic news scheduled for release today. If the stock markets remain near current levels, we should see bond prices and mortgage rates likely follow suit. However, a rebound in stocks could lead to higher mortgage rates this afternoon.

Next week brings us the release of several relevant reports for the markets to digest. There are two scheduled to be posted Monday, but neither are considered to be highly important. We will get December’s Existing Home Sales and Leading Economic Indicators late Monday morning.

The rest of the week has several important reports scheduled for release in addition t o the first FOMC meeting of the year. I am expecting to see a very active week in the markets and mortgage pricing. 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.

Rate Lock Advisory – Thursday Jan. 22nd

Thursday’s bond market has opened in negative territory yet again despite significant stock weakness. The Dow is currently down 220 points while the Nasdaq has lost 45 points and it appears that those losses may widen as the day progresses. The bond market is currently down 19/32 as supply concerns continue to weigh on trading. This will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

There were two pieces of economic data released this morning and both gave us much weaker than expected results. Unfortunately, it appears bond traders are ignoring the data since they are not usually considered to be of high importance. This is despite wide variances between forecasts and actual readings.

The first was December’s Housing Starts that showed a decline in new home starts that was quadruple the drop that was expected. This gives further credence to the theory that the housing sector has not bottomed out ye t.

The second piece of data was weekly unemployment figures from the Labor Department. They reported that 589,000 new claims for benefits were field last week, greatly exceeding the 543,000 claims that were forecasted. This points to a still softening labor market and does not give hope of a economic recovery anytime soon without stimulus assistance.

There is no relevant economic data scheduled for release tomorrow, so I would not be surprised to see more weakness in bonds and pressure in mortgage rates. It is becoming clear that the market is quite concerned about the amount of debt that the government will need to sell to meet goals that the new administration is expecting.

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 tak ing 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.

Rate Lock Advisory – Wednesday Jan. 21st

Wednesday’s bond market has opened in negative territory again as investors continue to fret about upcoming debt sales. The stock markets are rebounding somewhat from yesterday’s sell-off with the Dow up 77 points and the Nasdaq up 20 points. The bond market is currently down 15/32, which will likely push this morning’s mortgage rates higher by another .250 of a discount point.

There is no relevant economic news scheduled for release today. Tomorrow brings us the release of both of this week’s only reports. Neither are considered to be of high importance to the markets, but they are the week’s only factual releases. Therefore, they may influence trading enough to slightly affect mortgage pricing.

The first is December’s Housing Starts report early tomorrow morning. It gives us an indication of housing sector strength and future mortgage credit demand, but it is not considered to be a heavy influence on bond trading. It is expected to show a d ecline in starts of new homes from November’s level.

The second is weekly unemployment figures from the Labor Department. They are expected to say that 548,000 new claims for benefits were filed. This would be an increase from the previous week, which would be considered favorable for bonds. If the report shows a much smaller number of claims, we may see bond prices fall and mortgage rates move higher again. However, a larger than expected number may lead to slightly lower mortgage rates tomorrow morning.

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 a ll/any other borrowers.