Daily Mortgage Rate Lock Advisory

Daily Mortgage Rate Lock Advisory – Wednesday Mar. 4th

Rate Lock Advisory – Wednesday Mar. 4th

Wednesday’s bond market has opened well into negative territory following a strong opening in stocks. The stock markets are rallying with the Dow up 150 points and the Nasdaq up 32 points. The bond market is currently down 28/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

There were no important economic reports scheduled for release this morning. The Fed will release its Beige Book at 2:00 PM ET today. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading tomorrow. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

There are two important reports scheduled for release tomorrow m orning. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed a 3.2% increase in worker output. Analysts are expecting to see a sizable downward revision to the initial reading. It is expected to be cut to a 1.6% increase in output, meaning workers were not as productive as previously thought during the quarter. The Unit Labor Costs reading is expected to be revised higher to 3.4%. Employee productivity and costs are watched fairy closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns, while increases in employee costs do raise inflation fears.

January’s Factory Orders will be posted late tomorrow morning, which will give us a measurement of manufacturing sector strength. This data is similar to last week’s Durable Goods, except this report covers orders for both durable and non-durable goods. Current forecasts are calling for a drop in new orders of approximately 2.1%. A larger than expected drop would be good news for the bond market and could lead to an improvement in mortgage rates.

We also will get weekly unemployment numbers from the Labor Department, but I am not expecting them to heavily influence bond trading or 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 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: beige book, bond, closing, downward revision, employee productivity, Float, fomc meetings, inflation concerns, inflation fears, initial reading, negative territory, productivity index, release tomorrow, tomorrow

Daily Mortgage Rate Lock Advisory – Wednesday Jan. 14th

Rate Lock Advisory – Wednesday Jan. 14th

Wednesday’s bond market has opened strong following the release of weaker than expected economic news. The stock markets have reacted negatively to the news with the Dow down 266 points and the Nasdaq down 52 points. The bond market is currently up 21/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

December’s Retail Sales results were the big news of the day. The Commerce Department reported that sales at retail level establishments fell 2.7% last month. This was more than twice the drop of 1.2% that was expected and the sixth consecutive monthly decline. This is the first time we have seen that long of a slump in approximately 40 years.

The release also revised November’s sales lower than previously thought and gave us much weaker than expected results with volatile auto sales excluded. This indicates that consumer spending is weaker than many had assumed, which is good news for bonds and mor tgage rates because consumer spending makes up two-thirds of the U.S. economy. When consumer spending is soft and the overall economy is weakening, bonds become more attractive to investors. This usually leads to higher bond prices and lower mortgage rates.

Later today the Fed will release its Beige Book, detailing economic activity regionally throughout the U.S. The Fed uses this data during their Federal Open Market Committee (FOMC) meetings when deciding whether or not to change key short-term interest rates. Accordingly, its results can cause a fair amount of movement in the bond market and mortgage rates if it reveals any surprises. I am not expecting to see any surprises and no reaction in the markets from its contents.

The Labor Department will post the Producer Price Index (PPI) for December early tomorrow morning. This report is an important measure of inflation at the producer level of the economy. Rapidly rising prices raises inflation con cerns and leads to mortgage rate increases. If it reveals weaker than expected readings, especially in the core data that excludes more volatile food and energy prices, the bond market should fair well. Current expectations are calling for a 1.9% drop in the overall reading and a 0.1% increase in the core data.

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.

Tags: beige book, bond, bond prices, closing, federal open market committee, Float, lower mortgage, open market committee, producer level, producer price index, producer price index ppi, rate, retail level, U.S., U.S. The

Daily Rate Lock Recommendation – 07/24/2008 11:15:00 AM EST

Thursday’s bond market has opened in positive territory following sizable stock losses and weaker than expected economic news. The Dow is down 110 points and the Nasdaq has lost 16 points. The bond market is currently up 12/32, which should improve this morning’s mortgage rates by approximately .250 – .375 of a discount point. Neither of today’s economic releases ere considered to be high importance to the markets unfortunately, or we may have seen more of an improvement to mortgage rates. The National Association of Realtors said that home resales in the U.S. fell 2.6% last month. This was a larger drop than was forecasted. In addition, the Labor Department reported that 406,000 new claims for unemployment benefits were filed last week. This was a much larger increase than was expected and again crosses the important 400,000 benchmark. Yesterday afternoon’s Beige Book release showed that economic activity slowed in most regions and that infla tion continued to rise. The slowing economic activity is good news for bonds, but the inflationary pressures are a threat to bonds and could drive prices lower and mortgage rates higher if they continue to rise. Overall, it didn’t reveal any significant surprises. The results of today’s 5-year Treasury Note auction will be posted at 1:00 PM ET. If the auction was met with a strong demand from investors, bond prices may rise during afternoon trading and could lead to lower mortgage rates. However, if the sale was met with a poor demand, we could see bond prices fall and mortgage rates rise revise higher. Tomorrow morning brings us the release of two of the week’s most important reports. The first will come from the Commerce Department when they will post June’s Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a decline of 0.3% after showing little change in new orders during May. This data gives us an indication of manu facturing sector strength by tracking orders at U.S. factories for big-ticket items. These are products that are expected to last at least three years. A stronger than expected number may lead to higher mortgage rates tomorrow morning. If it reveals a larger than expected drop, mortgage rates should improve tomorrow. Also being released tomorrow is the final revision to July’s University of Michigan Index of Consumer Sentiment. Unless we see a drastic revision to the preliminary estimate of 56.6, I think the markets will probably shrug this news off. 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 b e guaranteed to be in the best interest of all/any other borrowers.

Tags: association of realtors, beige book, bond, bond prices, closing, durable goods orders, facturing, Float, home resales, lower mortgage, national association of realtors, stock losses, tomorrow, U.S., unemployment benefits

Daily Rate Lock Recommendation – 06/10/2008 11:00:00 AM EST

Tuesday’s bond market has opened in negative territory again as inflation concerns continue to hurt bonds and long-term securities that are sensitive to such issues. The stock markets are mixed with the Dow up 26 points and the Nasdaq down 12 points. The bond market is currently down 18/32, which will likely push this morning’s mortgage rates higher by approximately .375 – .500 of a discount point.

This morning’s only economic data isn’t the cause of today’s negative tone in bonds. April’s Goods and Services Trade Balance report gave us the U.S. trade deficit during that month. It showed a deficit of $60.9 billion that was higher than forecasts had called for. However, this data is not considered to be of high importance to the bond market and mortgage rates and therefore, has not influenced mortgage pricing this morning.

What caused this morning’s weakness was comments by Fed members, including Fed Chairman Bernanke that strongly hinted of a possible rate hike coming before another rate cut. The Fed is obviously concerned about inflation if they are talking rate increases, so mortgage related bonds are reacting negatively because they are extremely sensitive to inflation.

Later today, the Federal Reserve will release its Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it shows slowing economic activity, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing, we could see mortgage rates revise higher this afternoon.

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, beige book, bond, bond market, Chairman Bernanke, closing, Fed, fed chairman bernanke, fomc meetings, inflation concerns, lock, mortgage rates, negative territory, negative tone, rate, refinancing a home, U.S.

Daily Rate Lock Recommendation – 06/09/2008 11:43:00 AM EST

Monday’s bond market has opened down sharply as investors turn away from inflation sensitive investments. The stock markets are mixed by a wide margin with the Dow up 110 points and the Nasdaq down 14 points. The bond market is currently down 30/32, which will likely push this morning’s mortgage rates higher by approximately .250 – .375 of a discount point. I also would not be surprised to see further upward revisions sometime today as the bond market appears likely to continue its selling.

There was no relevant economic news released today. The week’s first but least important data is April’s Goods and Services Trade Balance report tomorrow morning. This report gives us the size of the U.S. trade deficit and will be released at 8:30 AM. It isn’t likely to cause much movement in the markets or mortgage rates, but nevertheless forecasts are expecting to see a $59.5 billion deficit.

Late Wednesday, the Federal Reserve will release its Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it shows slowing economic activity, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing, we could see mortgage rates revise higher Wednesday afternoon.

Overall, it is going to be a fairly busy week for the financial markets. I feel that Friday will be the single most important day of the week with the release of the CPI, but Thursday also is likely to bring significant movement in rates due to the Retail Sales report being released. Accordingly, this would be a very good week to maintain fairly constant contact with your mortgage professional.

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, beige book, bond, bond market, closing, fomc meetings, lock, mortgage rates, refinancing a home, report tomorrow, today, U.S., upward revisions, week, wide margin