Daily Mortgage Interest Rate Lock Advice for 12/31/2010

Friday’s bond market has opened in constructive territory as investors look to close the year out on a optimistic note. The stock markets are showing minor losses of 18 points in the Dow and 11 points in the Nasdaq. The bond market is currently up 10/32, which should improve this morning’s mortgage interest rates by approximately .125 of a discount point.

There is nothing of importance this morning, making it highly likely that we will crawl into the end of the year. As expected, trading is extremely light this morning and there is no reason to think that will change before today’s 2:00 PM ET close. The stock markets are technically open all day, but it doesn’t look many traders went to work. We will probably see a little fluctuation in the major indexes and bond prices, but I would be highly surprised if we saw significant movement or an intra-day change to mortgage interest rates.

Next week brings us the release of several relevant trade and industry reports. The week opens and closes with important reports, giving us a good look at current economic conditions. Monday has December’s Institute for Supply Management’s manufacturing index. This is usually the first most current report we see month. It is posted the first business day of the month and covers the preceding month. The data tracks manufacturer sentiment, giving us an indication of manufacturing sector strength. It is considered to be one of the more important reports we see each month.

The week closes next Friday with the almighty monthly Employment report. In between the Institute for Supply Management index and Employment numbers there are a couple more events scheduled, including the minutes from the past FOMC meeting and a couple of less important fiscal reports. Late in the week, Fed Chairman Bernanke will speak, drawing the close attention of the markets also. I am actually looking forward to some of this key data as I still believe December’s spike in interest rates was an overreaction. I suspect we will still results that remind us we still have significant hurdles facing the economy and this month’s optimism was premature. If this is the case, we should see mortgage interest rates move lower next week.

Look for more details on next week’s events in Sunday’s weekly preview. I would like to take this opportunity to wish everyone and theirs a wonderful and safe holiday weekend and a prosperous new year!

If you are considering financing/refinancing a home, I would…. Lock if your closing takes place within 7 days… Float if your closing takes place between 8 and 20 days… Float if your closing takes place between 21 and 60 days… if your closing takes place over 60 days from now…

Tags: bond, bond prices, economic reports, Employment, employment numbers, fomc meeting, institute for supply management, interest, lock, Management, management index, manufacturing, minor losses, Mortgage, mortgage interest rate, mortgage interest rates, stock, Supply, Trade, upbeat note

Daily Mortgage Interest Rate Lock Advice for 12/30/2010

Daily Rate Lock Advice for 12/30/2011

Thursday’s bond market has opened in depressing territory following the release of much stronger than expected trade and industry data. The stock markets have had little answer to the news with the Dow up 9 points and the NASDAQ down 2 points. The bond market is currently down 9/32, but we will still see a noticeable step up in this morning’s mortgage interest rates due to strength late yesterday. If comparing to yesterday’s morning interest rates, we should see an increase of approximately .375 of a discount point.

The Labor Department said early this morning that 388,000 new claims for joblessness reimbursement were filed last week. This was well below forecasts of 416,000 and the lowest total since July 2008. At first appearance, the headline number could be concerning for the bond market and good news for stocks. The size of the drop and the number of new claims hints at a strengthening employment sector. In fact, the number of weekly new claims has risen only once in the past 6 weeks.

That said the markets have not had a significant reaction to the data for a couple of reasons. First and primarily, the data covers only a single week’s worth of new claims. Another portion of the report showed that the number of continuing claims for reimbursement (claims that are not new) rose during the week when analysts were expecting them to remain flat. Also, the reason for the drop in new claims could be the Christmas Holiday last week where state offices were closed at least one of the five days. So, while the headline number of 388,000 does draw attention, it comes from a report that does not carry significant importance because of the short term it covers and were statistics from a holiday-shortened week.

We saw bonds rally late in the day yesterday, partly as a result of a 7-year Note auction that went surprisingly well. Several of the measurements we use to gauge the success of the auctions showed fairly strong investor demand, especially if comparing to Tuesday’s 5-year Note sale. After the results of yesterday’s sale were posted, bonds moved higher causing some lenders to revise mortgage interest rates lower.

There is no relevant monetary data scheduled for release tomorrow. It is the last trading day of the year, so we may see a little unpredictability as investors look to finalize their year-end holdings. We may actually see some of that take place this afternoon, so don’t be surprised to see movement in the markets this afternoon. But there is not much disquiet that we will see sizable changes to mortgage interest rates. Keep in mind that the bond market will close at 2:00 PM ET tomorrow and will reopen Monday for regular hours. The stock markets will not be recognizing the holiday with regular trading hours both tomorrow and Monday.

If you are considering financing/refinancing a home, you should…. Lock if your closing takes place within 7 days… Lock if your closing takes place between 8 and 20 days… Float if your closing takes place between 21 and 60 days… Float if your closing takes place over 60 days from now…

Tags: bond, bond market, christmas holiday, drop, employment sector, first appearance, headline, headline number, interest, joblessness, lock, Monday, Mortgage, mortgage interest rate, mortgage interest rates, reimbursement claims, report, stock, stock markets, tomorrow

Important Announcement From Rate Lock Advisory

As of today, we will not be providing you with the rate lock advisory commentary, which we were receiving from “Mortgage Commentary”.  After we have arranged a proper license from them we will return the content here in the mean time pleave visit them at www.mortgagecommentary.com and you can subscribe to their email list and receive it directly from the source. 

Instead we will be providing RSS News feed from various sources to provide you with the full information.

Thank you all for supporting www.RateLockAdvisory.com

William Braddock

Tags: lock, mean time, mortgage commentary, rate, time, today, William Braddock, www

Daily Mortgage Rate Lock Advisory Tuesday 8/18/09

Tuesday’s bond market has opened down slightly despite the release of weaker than expected economic news. The stock markets have recovered some of yesterday’s losses with the Dow up 54 points and the Nasdaq up 15 points. The bond market is currently down 3/32, which should keep this morning’s mortgage rates at yesterday’s morning levels.

The Labor Department gave us July’s Producer Price Index (PPI) this morning, saying that the overall index fell 0.9% and that the core data reading fell 0.1%. Analysts had predicted a 0.2% decline in the overall reading and a 0.1% rise in the core data. This means that prices at the producer level of the economy were much weaker than expected. That indicates that inflationary pressures at that level are not a concern at the moment, making long-term securities such as mortgage related bonds more attractive to investors. Unfortunately, traders seem to be more concerned with the stock markets than today’s economic news.

The second report of the day was also favorable for bonds, but it is much less important than the PPI reading. The Commerce Department said that starts of new homes fell last month, hinting that the housing sector may not be as ready to recover as some analysts had thought. Many market participants were expecting to see an increase in stats of new homes. A weak housing sector if favorable to bonds because it makes a broader economic recovery less likely in the immediate future.

There is no relevant economic data scheduled for release tomorrow, so look for the stock markets to again influence bond trading and mortgage pricing. If the stock markets can hold this morning’s gains and move higher tomorrow morning, there is a pretty good possibility of seeing mortgage rates inch higher tomorrow. But if we see stock weakness, bonds may benefit, pushing mortgage rates lower.

Thursday’s primary data is July’s Leading Economic Indicators (LEI) from the Conference Board. This index attempts to measure economic activity over the next three to six months and is considered to be moderately important. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening more than thought. However, a weaker than expected reading means that the economy may not grow as much as predicted, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates Thursday if the stock markets remain calm. Current forecasts are calling for an increase of 0.6% in the index, indicating economic growth over the next couple of months.

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.

Tags: bond, bond market, bond trading, closing, core data, inflationary pressures, leading economic indicators, LEI, market participants, producer level, producer price index, producer price index ppi, stock, stock markets

Daily Mortgage Rate Lock Advisory Monday 08/17/09

Monday’s bond market has opened in positive territory following early stock selling. The stock markets are following several international markets that posted losses during overnight trading. The Dow is currently down 188 points while the Nasdaq has fallen 51 points. This has helped push the bond market up 22/32 as investors seek safe-haven from falling stock prices. However, the impact on this morning’s mortgage rates has been fairly minimal. We will likely see little change from Friday’s morning rates due to volatility in trading late Friday.

There is no relevant economic data scheduled for release this morning. The rest of the week brings us the release of four reports that may influence mortgage rates, but only one of them is considered to be highly important. With no relevant auctions or speeches on tap, I suspect we will see much less movement in mortgage rates this week compared to the past couple of weeks.

There are two reports scheduled to be posted tomorrow morning. The first is July’s Producer Price Index (PPI) that gives us an indication of inflation at the producer level of the economy. There are two readings in the report- the overall index and the core data reading. The core data is more important because it excludes more volatile food and energy prices that can change significantly from month to month. Current forecasts call for a decline of 0.2% in the overall and a 0.1% increase in the core data reading. A larger increase in the core data could push mortgage rates higher tomorrow morning. If it reveals weaker than expected readings, we may see mortgage rates improve as a result.

The second report of the day is July’s Housing Starts data. This report gives us an indication of housing sector strength and mortgage credit demand. However, it isn’t considered to be of high importance to the bond market or mortgage pricing and usually doesn’t cause much movement in mortgage rates unless it varies greatly from forecasts. It is the least important of the week’s reports and is expected to show an increase in construction starts of new homes. The lower the number of starts the better the news for bonds as it would indicate a weaker than expected housing sector.

Overall, look for tomorrow to be the busiest day of the week due to the PPI being released. The rest of the week will likely be influenced more by stock prices than anything else, which may be quite volatile. Therefore, keep an eye on the markets and maintain contact with your mortgage professional if you have not locked an interest rate yet.

If I were considering financing or 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 or any other borrowers.

Tags: bond, bond market, closing, core data, mortgage credit, mortgage rates, producer level, producer price index, producer price index ppi, stock, stock markets, stock prices, volatile food, week

Mortgage Rate Lock Advisory

Daily Mortgage Rate Lock Advisory for Friday 08/14/09

Friday’s bond market has opened in positive territory again after this morning’s economic data failed to give us any major surprises. Contributing to today’s early bond strength is a weak opening for stocks that has the Dow down 131 points and the Nasdaq down 32 points. The bond market is currently up 13/32, which with yesterday’s late strength should improve this morning’s mortgage rates by approximately .500 of a discount point compared to yesterday’s morning rates.

The Labor Department gave us today’s most important data with the release of July’s Consumer Price Index (CPI). They reported that the overall index was unchanged form June’s level and that the core data reading rose 0.1%. Both of these readings matched forecasts, indicating that consumer prices remain in-check last month. But the index has fallen 2.1% over the past 12 months, matching the largest year-over-year decline since 1950. That is good news for bonds because it means that inflation is not currently a threat to the economy. Inflation erodes the value of a bond’s future fixed interest payments, leading to higher mortgage rates. When inflation concerns are low, bonds are usually more appealing to investors. As bonds are bought, their prices rise, pushing their yields and mortgage rates lower.

The second report of the day was Industrial Production data for July. It showed a 0.5% increase in output and U.S. factories, mines and utilities. Analysts were expecting to see a 0.4% rise, meaning manufacturing activity was slightly stronger than expected.
This can be considered negative for bonds, but the minimal size of the variance and the fact that this data is not extremely important to the markets has prevented it from affecting this morning’s mortgage pricing. The final report of the week was the University of Michigan’s Index of Consumer Sentiment for August late this morning. It gave us a reading of 63.2 that was well below forecasts of a 69.0 that was expected. That indicates that consumers were less optimistic about their own financial situations than many had thought. This is good news for bonds because falling confidence usually translates into weaker levels of consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely.

Yesterday’s 30-year Bond auction went fairly well, leading to higher bonds prices during afternoon trading Thursday. This caused some lenders to revise their rates slightly lower late yesterday, while others may have waited until this morning to reflect those changes.

Next week is relative light in terms of economic releases, at least if comparing to the last two weeks. There is no relevant data scheduled to be posted Monday, but we will get another important inflation reading later in the week. Look for more details on next week’s events in Sunday’s weekly preview.

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

Tags: bond, bond market, bond strength, closing, consumer price index, core data, economy inflation, index cpi, index of consumer sentiment, inflation concerns, minimal size, mortgage rates, U.S., week, yesterday

Daily Mortgage Rate Lock Advisory Thursday 08/13/09

Thursday’s bond market has opened in positive territory following much weaker than expected consumer spending news. The stock markets are showing minor gains with the Dow up 27 points and the Nasdaq up 10 points. The bond market is currently up 15/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point. Preventing a slightly larger improvement in rates was weakness late yesterday after the FOMC meeting.

The Commerce Department announced this morning that retail level sales fell 0.1% last month. This was well off forecasts of a 0.7% increase, meaning that consumers were spending much less than expected. Even if volatile auto-related sales are excluded, sales fell much more than expected. This is very good news for the bond market and mortgage rates because consumer spending makes up two-thirds of the U.S. economy. If consumer spending is still falling, the broader economic recovery cannot be close. Generally speaking, a weak economy is a better environment for bonds and makes mortgage-related bonds more attractive to investors.

Also posted this morning were weekly unemployment figures from the Labor Department. They reported that 558,000 new claims for benefits were filed last week. This was an increase from the previous week, but more importantly, analysts were expecting to see a decline in new claims. However, since this data basically tracks only a week’s worth of claims, it usually has little impact on mortgage rates and has not influenced trading this morning.

Early this afternoon we will get the results of today’s 30-year Bond auction. This sale is not as important to mortgage rates as yesterday’s 10-year sale was. But if the auction is met with an overly strong demand from investors or a particularly weak interest, we may see bond prices move enough during afternoon trading to cause revisions to mortgage rates. The results will be posted at 1:00 PM ET.

Tomorrow morning brings us the release of three reports. The first is July’s Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and energy prices. Current forecasts call for no change in the overall index and a 0.1% increase in the core data reading. Declines in the readings, especially in the core data, should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing tomorrow.

The remaining two pieces of data are relevant to mortgage rates but not nearly important as the CPI is. The second report of the day is Industrial Production data for July. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of moderately high importance and may cause movement in mortgage rates. Analysts are currently expecting to see a 0.4% increase in production between June and July. A larger increase in output could lead to higher mortgage rates tomorrow, but only if the CPI’s results are a non-factor in rates.

The last report of the day will come from the University of Michigan who will release its Index of Consumer Sentiment for August at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably help boost bond prices. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher Friday morning. However, this is the least important of the day’s three reports and will probably have the least impact on rates.

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.

Tags: bond, bond auction, bond market, bond prices, consumer spending, cpi, fomc meeting, mortgage rates, report, retail level, spending, stock markets, U.S., unemployment figures

Daily Mortgage Rate Lock Advisory Wednesday Update 08/12/09

WEDNESDAY AFTERNOON UPDATE:

This week’s FOMC meeting has adjourned with no change to key short-term interest rates. This was widely expected by market participants. The post-meeting statement really didn’t give us any new insight to the Fed’s next move. It did renew the same thoughts previously mentioned- that the economy is leveling off but to expect weak economic conditions for the immediate future. They also indicated that inflation is not an immediate concern to the economy.

The lack of a change to rates had no impact on trading as it was expected. The portion of the statement that indicated the spiraling economy is stabilizing can be considered somewhat negative for the bond market. However, the lack of concern about inflationary pressures offset any concerns that may have arisen from the reminder than the economic downturn is slowing.

Today’s 10-year Treasury Note auction has caused some stress in bonds during afternoon trading though. The sale was met with an average demand at best. The results were far from the worst we have seen but also nowhere near the recent levels of interest. This led to bond prices falling immediately after the 1:00 PM ET announcement and the FOMC meeting has done nothing to push them higher. Overall, I am expecting to see a small upward revision to mortgage rates this afternoon. If your lender does not revise higher today, it will be built into tomorrow’s pricing. Some lenders may opt to wait for tomorrow morning’s key economic data to be posted before reflecting this change. If that is the case, keep in mind you already have a slight increase waiting from this afternoon’s events.

This morning’s only relevant economic data was June’s Trade Balance report that revealed a $27.0 billion deficit. This was smaller than expected, but this data is not considered to be highly important to the markets so its impact on this morning’s trading and mortgage rates was minimal.

Tomorrow morning’s sole monthly report is July’s Retail Sales data. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, potentially slowing the economic recovery. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.7%.

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

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: balance report, bond prices, closing, economic downturn, fomc meeting, inflationary pressures, lock, market participants, retail sales data, trading, U.S., upward revision, year treasury note

Daily Mortgage Rate Lock Advisory Wednesday 08/12/09

Wednesday’s bond market has opened in negative territory following early stock strength and concerns over today’s FOMC meeting adjournment. The stock markets are showing strong gains with the Dow up 130 points and the Nasdaq up 32 points. The bond market is currently down 12/32, which should push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point compared to yesterday’s morning rates.

This morning’s only relevant economic data was June’s Trade Balance report that revealed a $27.0 billion deficit. This was smaller than expected, but this data is not considered to be highly important to the markets so its impact on this morning’s trading and mortgage rates has been minimal.

It will likely be an active afternoon for the markets and mortgage rates. The results of today’s 10-year Treasury Note auction will be posted at 1:00 PM ET and this week’s
FOMC meeting will adjourn at 2:15 PM ET. Either of these events can lead to afternoon swings in the financial markets and mortgage rates, so expect to see some afternoon revisions today.

This report will be updated shortly after the markets have an opportunity to react to the FOMC statement, but I am holding my cautious approach towards rates into this afternoon’s events. I would not be surprised to see upward revisions to rates later today.

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

Tags: balance report, bond, bond market, cautious approach, closing, FOMC, fomc meeting, fomc statement, lock, mortgage rates, negative territory, refinancing a home, today, upward revisions