Daily Mortgage Rate Lock Advisory

Daily Mortgage Rate Lock Advisory – Monday Feb. 2nd

Rate Lock Advisory – Monday Feb. 2nd

Monday’s bond market has opened up slightly following the release of mixed economic data. The stock markets are mixed with the Dow down 59 points and the Nasdaq up 9 points during early trading. The bond market is currently up 4/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

There were two pieces of relevant economic data posted this morning. The first was December’s Personal Income and Outlays report that revealed a 0.2% decline in income and a 1.0% drop in spending.

Forecasts were calling for a 0.4% decline in income and a 0.9% drop in spending. In other words, income didn’t drop as much as expected, but spending was slower than forecasted. These readings, along with downward revisions to November’s results have prevented this report form influencing this morning’s mortgage pricing.

The Institute of Supply Management’s (ISM) manufacturing index was today’s other releas e. It showed a reading of 35.6, up from December’s revised 32.9 reading. This indicates that surveyed manufacturers were more optimistic about business conditions the last two months than many had thought. This is considered negative news for bonds because rising levels of sentiment could mean that the manufacturing sector may have reached bottom. However, this was the 12th consecutive month of a reading below 50 that means more surveyed business executives felt business worsened than those who felt it had improved, which is a recession sign.

There is no relevant news scheduled for release tomorrow. There is a report Wednesday that has the potential to influence the markets and mortgage rates but quite often is a non-factor. The ISM will release their services sector index late Wednesday morning. It is similar to today’s manufacturing index but tracks the service sector. If it shows a significant surprise, it may affect bond trading enough to slightly chan ge mortgage rates. However, more times than not its results do not affect rates.

Overall, look for a fairly active week in the markets and mortgage rates. Friday will likely be the most important day of the week due to the influence the Employment report has on the markets. But, as we have seen lately we don’t necessarily need economic news for mortgage rates to move significantly. Therefore, it would be a good idea to maintain contact with your mortgage professional the next few days.