Daily Mortgage Rate Lock Advisory

Rate Lock Advisory – Friday Feb. 27th

Friday’s bond market has opened in negative territory again despite weaker than expected economic news. The stock markets are also showing early losses with the Dow down 74 points and the Nasdaq down 2 points. The bond market is currently down 11/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

Today’s big news was the first revision to the 4th Quarter GDP that showed a sizable downward revision from last month’s preliminary estimate. Today’s release revealed that the GDP, which is the sum of all goods and services produced in the U.S. and is considered to be the best measurement of economic activity, actually shrank at 6.2% annual pace. This was much weaker than the negative 3.8% that was released last month and weaker than the 5.2% decline that was forecasted for this revision. This was also the worst quarterly reading in 26 years. That indicates that the economy was weaker than many had thought .

Generally speaking, today’s headline reading was good news for bonds and mortgage rates. The problem came in a key inflation reading in the report that went from a 0.1% decline to a 0.5% gain, meaning that despite the drop in activity there still remains a concern about inflation. That has contributed to this morning’s bond loss along with further debt supply concerns that are coming as a result of the Fed’s revised holdings in banking giant Citigroup.

The University of Michigan’s revised Index of Consumer Sentiment for February was also posted this morning. It showed a reading of 56.3, which was little change from this month’s previous estimate of 56.2. This news had little impact on today’s trading or mortgage pricing.

Next week is pretty busy with economic releases scheduled for four of the five trading days. The week’s kicks off with the release of two reports- January’s Personal Income and Outlays along with February’s ISM Manufact uring Index. Both will be posted Monday morning and can influence bond trading and mortgage rates.

There is important data being posted everyday of the week except Tuesday. 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… 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 Feb. 26th

Thursday’s bond market has opened in negative territory as yesterday afternoon’s selling continues. The stock markets are showing gains with the Dow up 114 points and the Nasdaq up 15 points. The bond market is currently down 24/32, which will likely push this morning’s mortgage rates .250 of a discount point higher than yesterday’s afternoon rates. If your lender did not revise higher yesterday, then you will see an increase of approximately .500 – .625 of a discount point compared to yesterday’s morning rates.

The bond market continues to show weakness despite a couple of economic reports that somewhat underscore the economic problems we are currently facing. The Commerce Department reported that new orders for big-ticket items fell 5.2% last month, more than twice the decline that analysts were expecting. The report also revealed a significant downward revision to December’s order. What was previously announced as a 2.6% drop in orders during December is now said to be 4.6%. This indicates that the manufacturing sector is still weakening. That should be good news for the bond market and mortgage rates, but has not been able to offset the recent selling in bonds.

Today’s other two releases are much less important to the markets than the Durable Goods Orders report is but the footnotes of the weekly unemployment claims and January’s New Home Sales releases bring to light how bad some parts of the economy are. The Labor Department gave us last week’s unemployment figures, saying that 667,000 new claims for benefits were filed last week. This was much higher than what was expected and is the highest number of claims in approximately 26 years.

January’s New Home Sales figures were also posted today, revealing a 10% decline in sales of newly constructed homes. This can be considered the week’s least important data but it also brings sales down to their lowest level since records began in 1963. That further supports the theory that the housing sector has not bottomed out yet.

The first of two revisions to the 4th Quarter GDP reading is scheduled for release tomorrow morning. Analysts’ forecasts currently call for a decline of 5.4%, indicating that the economy was weaker in the last quarter of the year than initially thought. It will be interesting to see where this figure falls and what its impact on the markets will be. Generally speaking, higher levels of activity are bad news for the bond market.

The last piece of data scheduled for release this week is the University of Michigan’s revision to their Index of Consumer Sentiment for February. Current forecasts show this index revising slightly higher than previously thought. The preliminary reading was 56.2 and is now expected to stand at 56.0, indicating that consumer sentiment was slightly weaker than previously thought. This index is important because it helps us measure consumer confidence th at translates into consumer willingness to spend.

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 Feb. 25th

WEDNESDAY AFTERNOON UPDATE:

The bond market has turned sour as investors again worry about the amount of new debt being sold to fund the stimulus and Fed bailout packages. The stock markets rallied off this morning’s lows during early afternoon trading but have since given back those gains to currently stand at this morning’s levels. The Dow is now down 80 points while the Nasdaq is down 16 points. The bond market has fallen from this morning’s levels to currently stand down 39/32, which will likely cause an upward revision to this afternoon’s mortgage rates of approximately .375 of a discount point from this morning’s rates.

Today’s only economic data was January’s Existing Home Sales that showed a decline in home resales of 5.3%. This was much weaker than expected and the lowest level of sales in almost 12 years. That is good news for bonds and mortgage rates, but this data is not considered to be of high importance and unfortunately has not influenced today’s rates.

The only important data scheduled for release tomorrow is January’s Durable Goods Orders data. This data gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. A larger drop than the 2.5% that is expected would be good news for the bond market and mortgage rates. This data is quite volatile from month-to-month, so large swings are fairly normal.

We will also get weekly unemployment claims from the Labor Department, who are expected to show that 625,000 new claims were filed last week. Since this data tracks a week’s worth of claims, it usually does not affect mortgage rates too much, but can if 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… Float if my closing was taking place between 8 and 20 days… Float if my clos ing 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 Feb. 24th

Tuesday’s bond market has opened in positive territory following news of a plummet in consumer confidence last month and word that the Fed expects it to take a couple of years for the economy to fully recover from the recession. The stock markets are showing gains with the Dow currently up 48 points while the Nasdaq up 16 points. The bond market is currently up 8/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

The Conference Board gave us February’s Consumer Confidence Index (CCI) late this morning, showing a reading of 25.0. This was an all-time low and indicates that consumers are still concerned about their jobs and own financial situations. That is expected to mean that they are less likely to make large purchases in the near future, which will limit economic growth. This is good news for bonds and mortgage rates.

Also this morning was Mr. Bernanke’s semi-annual testimony on the status of the economy to the Senate Banking Committee. During his testimony he stated that he was optimistic that the recession would end later this year, but that it would take two to three years for the economy to fully recover from it. He also said that restoring financial stability is needed for the economy to recover. None of this is a major surprise but making it official word from Chairman Bernanke gives the markets benchmarks to follow.

January’s Existing Home Sales report will be posted late tomorrow morning. This is one of the least important reports of the week, along with Thursday’s New Home Sales report. They measure housing sector strength and mortgage credit demand, but usually do not have a significant impact on bond trading or mortgage rates. The Existing Home Sales report is expected to show an increase in sales but new home sales are expected to fall slightly.

If I were considering financing/refinancing a home, I would…. Float if my clo sing 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 Feb. 23rd

Monday’s bond market is currently down slightly despite stock losses. The Dow is currently down 53 points while the Nasdaq has lost 20 points. The bond market is currently down 4/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

The bond market and stock indexes are well off earlier levels. The stock markets opened in positive territory with the Dow up nearly 75 points earlier and the Nasdaq up 11 points. The bond market was down 12/32 during early trading, but as the stock markets have given back early gains and slid into negative ground, bonds are rising. This is likely as a result of investors shifting funds into bonds to escape the expected volatility in stocks. Some analysts are predicting stocks to fall further in the near future and bonds are benefiting.

This week brings us the release of six pieces of economic data for the bond market to digest along with some very important tes timony from Fed Chairman Bernanke. Two of the reports are considered to be of low importance, but a couple of them are considered to be of fairly high importance. None of this week’s relevant data is being released today.

Tomorrow morning brings us the first of this week’s data with the release of February’s Consumer Confidence Index (CCI) during late morning trading. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. Since consumer spending makes up two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from 37.7 in January to 36.0 this month. A lower reading would be considered good news for bonds and mortgage rates.

Mr. Bernanke will deliver the Fed’s semi-annual testimony on the status of the economy late tomorrow morning. He will be speaking to the Se nate Banking Committee and market participants will watch his words very closely. The Fed Chairman is required to deliver this testimony twice a year, which is considered to be of extreme importance to the financial markets. We almost always see the markets move as a result of what he says during this testimony. Look for him to address the banking and housing crises specifically and their impact on the overall economy. His testimony begins at 10:00 AM ET with a prepared statement then is followed by Q & A with committee members. I am expecting to see the markets fluctuate during this session, possibly affecting mortgage rates also.

Overall, look for plenty of movement in bond prices and mortgage rates this week. I think we will see the most movement either tomorrow or Thursday, but Friday may be fairly active also. This would be a good week to maintain contact with your mortgage professional.

If I were considering financing/refinancing a home, I wou ld…. 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 Feb. 22nd

This week brings us the release of six pieces of economic data for the bond market to digest along with some very important testimony from Fed Chairman Bernanke. Two of the reports are considered to be of low importance, but since we have data being posted every day of the week except for tomorrow, it is likely that we will see plenty of movement in mortgage rates the next few days.

Tuesday morning brings us the first of this week’s data with the release of February’s Consumer Confidence Index (CCI) during late morning trading. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. Since consumer spending makes up two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from 37.7 in January to 36.0 this month. A lower reading would be considered good news for bonds and mortgage rates.

Mr. Bernanke will deliver the Fed’s semi-annual testimony on the status of the economy late Tuesday morning. He will be speaking to the Senate Banking Committee and market participants will watch his words very closely. The Fed Chairman is required to deliver this testimony twice a year, which is considered to be of extreme importance to the financial markets. We almost always see the markets move as a result of what he says during this testimony. Look for him to address the banking and housing crises specifically and their impact on the overall economy. His testimony begins at 10:00 AM ET with a prepared statement then is followed by Q & A with committee members. I am expecting to see the markets fluctuate during this session, possibly affecting mortgage rates also.

January’s Existing Home Sales report will be posted late Wednesday morning. This is one of the least important reports of the week, along with Thursday’s New Home Sales report. They measure housing sector strength and mortgage credit demand, but usually do not have a significant impact on bond trading or mortgage rates. The Existing Home Sales report is expected to show an increase in sales but new home sales are expected to fall slightly.

The only important data scheduled for release Thursday is January’s Durable Goods Orders data. This data gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. A larger drop than the 2.3% that is expected would be good news for the bond market and mortgage rates. This data is quite volatile from month-to-month, so large swings are fairly normal.

The first of two revisions to the 4th Quarter GDP reading is scheduled for release Friday morning. Analysts’ forecasts currently call for a decline of 5.4%, indicating that the economy was weaker in the last quarter of the ye ar than initially thought. It will be interesting to see where this figure falls and what its impact on the markets will be. Generally speaking, higher levels of activity are bad news for the bond market.

The last piece of data scheduled for release this week is the University of Michigan’s revision to their Index of Consumer Sentiment for February. Current forecasts show this index revising slightly higher than previously thought. The preliminary reading was 56.2 and is now expected to stand at 56.5, indicating that consumer sentiment was slightly stronger than previously thought. This index is important because it helps us measure consumer confidence that translates into consumer willingness to spend.

Overall, look for plenty of movement in bond prices and mortgage rates this week. I think we will see the most movement either Tuesday or Thursday, but Friday may be fairly active also. This would be a good week to 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 – Friday Feb. 20th

Friday’s bond market has opened up sharply following early stock losses and renewed fears about the economy. The stock markets are showing early sizable losses after international markets posted large declines during overnight trading. The Dow is currently down 120 points while the Nasdaq has lost 13 points. The bond market is currently up 31/32, which will likely improve this morning’s mortgage rates by approximately .375 of a discount point.

The Labor Department gave us January’s Consumer Price Index (CPI) this morning, saying that the overall index rose 0.3% as expected. The core data rose 0.2%, exceeding analysts’ forecasts of a 0.1% increase. This means that consumer prices rose more than expected if excluding volatile food and energy prices. That is considered bad news for bonds, but the stock and economic concerns has prevented a negative reaction to this morning’s news.

The concerns, both here and overseas, about the global economy are contributing greatly to this morning’s bond gains. We are seeing a shift to safety as investors sell stocks and move funds into bonds. While this is good news for the bond market and mortgage rates, this is sometimes only a temporary move and could lead to further volatility in trading in the coming days and weeks. If investors become more comfortable with stocks, we could see those same funds move from bonds back into stocks, driving bonds prices lower and mortgage rates higher. Still, no reason to panic. This just means we need to watch the markets closely.

Next week is fairly active in terms of economic releases and relevant events. There is no important news scheduled for release Monday, but we do get important data and the semi-annual monetary policy testimony from the Fed Chairman to Congress on Tuesday. The rest of the week is scattered with relevant data releases, so look to Sunday’s weekly preview for details.

If I were considering finan cing/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 Feb. 19th

Thursday’s bond market has opened well into negative territory following the release of much stronger than expected economic data. The stock markets are relatively flat with the Dow and Nasdaq both down 2 points. The bond market is currently down 19/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

Both of today’s monthly reports gave us stronger than expected results. The first and more important of the two was January’s Producer Price Index (PPI) from the Labor Department. They announced a 0.8% jump in the overall reading and a 0.4% rise in the core data when they were expected to show 0.3% and 0.1% increases respectively. This means that prices paid at the producer level of the economy rose much more than expected. That is considered bad news for bonds and mortgage rates because it raises inflation concerns that make bonds less appealing to investors.

The second piece of data p osted this morning was January’s Leading Economic Indicators (LEI). This Conference Board report attempts to predict economic activity over the next three to six months and showed an increase of 0.4% compared to the 0.1% increase that latest forecasts were calling for. This means that the data is predicting economic activity to increase over the next few months at a faster pace than analysts had thought. This is negative news for bonds and mortgage rates.

The Labor Department also posted weekly unemployment figures, showing that 627,000 new claims for benefits were filed last week. This matched the previous week’s revised total but was higher than expected. The higher total of claims is good news for bonds, but since it tracks only a week’s worth of claims it is not considered to be of high importance to the markets, especially with the inflation related readings being posted this morning.

The Labor Department will also release January’s Consumer Pr ice Index (CPI) early tomorrow morning, which measures inflationary pressures at the very important consumer level of the economy. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially long-term securities such as mortgage-related bonds. It is expected to show a 0.3% increase in the overall index and a 0.1% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall.

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 c annot be guaranteed to be in the best interest of all/any other borrowers.

Rate Lock Advisory – Wednesday Feb. 18th

Wednesday’s bond market has opened in negative territory despite the release of weaker than expected economic data. The stock markets are showing small gains with the Dow up 21 points and the Nasdaq up 9 points. The bond market is currently down 6/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

Both of today’s factual economic reports gave us weaker than expected results. The first was January’s Housing Starts that tracks starts of new home construction. It revealed a decline of almost 17% in starts, bringing the total down to a record low. This gives us another indication that the housing market has not bottomed-out and that we could see further weakness in near future. This is considered good news for bonds because weak housing helps support a theory of a weakening economy.

January’s Industrial Production data was also posted this morning, showing a 1.8% drop in manufacturing output. This was a larger decline than the 1.4% that was expected and along with a downward revision to December’s output, indicates that the manufacturing sector is still slowing. This is another favorable indicator for bonds and mortgage rates.

The minutes from the last FOMC meeting will be released later today. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. However, with little likelihood of the Fed making a change to key short-term rates anytime soon, these minutes will likely not heavily influence trading or lead to a change in mortgage rates during afternoon trading.

The Labor Department will post their Producer Price Index (PPI) for January early tomorrow morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overal l reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. It is expected to show an increase of 0.2% in the overall reading and a 0.1% rise in the core data. Good news for bonds would be a decline in both readings, particularly the core data.

Also tomorrow morning will be the release of the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show no change, meaning that economic activity may be flat in the near future. A decline would be good news for the bond market and mortgage rates.

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 t aking 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 Feb. 17th

Tuesday’s bond market has opened up sharply as economic concerns and strong stock weakness has brought bonds into favor this morning. The Dow is currently down 243 points while the Nasdaq has lost 43 points. The bond market is currently up 58/32, but we will likely see an improvement of .250 – .375 in this morning’s mortgage rates.

There are no relevant economic reports scheduled for release today. There are five economic reports worth watching this week that are likely to affect mortgage rates in addition to the minutes from the last FOMC meeting. Tomorrow brings us three of those releases, including the week’s least important. January’s Housing Starts will be posted early tomorrow morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless it varies greatly from forecasts. Current forecasts are calling for a decline in starts of new housing.

January’s Industrial Production da ta will be released mid-morning tomorrow. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories. Mines and utilities and can have a moderate impact on the financial markets. Analysts are expecting to see 1.4% decline in production from December to January. A larger than expected decline in output would be good news and should push bond prices higher, lowering mortgage rates tomorrow.

The minutes from last FOMC meeting will be released tomorrow afternoon. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. However, with little likelihood of the Fed making a change to key short-term rates anytime soon, these minutes will likely not heavily influence trading or lead to a change in mortgage rates during afternoon trading.

Overall, the most important day of the week will likely be Friday with the CPI being released, but tomorrow and Thursday may also be active days for mortgage rates. There is a strong likelihood of seeing an active week for mortgage rates.

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.