Daily Mortgage Rate Lock Advisory

Daily Mortgage Rate Lock Advisory – Monday Dec. 1st

Rate Lock Advisory – Monday Dec. 1st

Monday’s bond market has opened strong following weaker then expected economic news and a major sell-off in stocks. The stock markets are kicking the month off in the tank with the Dow down almost 400 points and the Nasdaq down 81 points. The bond market is currently up 30/32, which will likely improve this morning’s mortgage rates by approximately .500 of a discount point.

The week’s first piece of economic news was November’s manufacturing index from the Institute for Supply Management (ISM) late this morning. It showed a reading of 36.2 that was below forecasts and is the lowest reading since May 1982. That indicates that manufacturer sentiment was weaker than many had thought last month. Since that hints at slower manufacturing activity it is good news for bonds and mortgage rates.

The recent rally in bonds has put us in uncharted waters in terms of their yields. The benchmark 10-Year Treasury Note is currently yielding 2.82%, which is it lo west on record. It broke below 3.00% last week for the first time since the Notes were issued in 1962. While mortgage rates have not recently plummeted as quickly as the yield has, they have fallen quite a ways and show signs of continuing to slide. The downside to that is the possibility of rates spiking higher at any moment. Bond yields and mortgage rates can worsen much quicker than they usually improve. Therefore, we need to remain extremely cautious during this rally as we could see an entire week’s worth of gains erased in a single morning if any of the major influences on bonds turns negative.

The next piece of data that we need to be concerned with comes Wednesday morning with the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It is the conditions around economic growth, such as inflation that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 0.9%, down from the previous estimate of 1.1%.

The Fed Beige Book will be posted Wednesday afternoon. This report, which is named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so it results can influence bond trading and mortgage rates if it shows any significant surprises.

Overall, the most important day of the week is Friday with the employment figures being released, but today will also likely be one of the more important. Tomorrow will probably be the lightest day of the week, assuming we don’t see another major sell-off or rally in stocks.

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… 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 yields, closing, downward revision, inflationary pressures, institute for supply management, lock, mortgage rates, productivity report, quarter productivity, uncharted waters, week, worker productivity, year treasury note

Rate Lock Advisory – Tuesday Oct. 21st

Rate Lock Advisory – Tuesday Oct. 21st

Tuesday’s bond market has opened up sharply following early stock losses. The stock markets showing sizable losses, erasing a good portion of yesterday’s late rally. The Dow is currently down 2 02 points while the Nasdaq has lost 47 points. The bond market is currently up 22/32, which will likely improve this morning’s mortgage rates by approximately .500 of a discount point or .125 in rate.

There is no relevant economic data scheduled for today or tomorrow. As expected, we are seeing the bond market fluctuate with stocks. Since stocks are in selling mode, the recent jump in bond yields has made bonds more attractive to investors. This is especially true with stocks unable to keep solid footing. The result is a significant improvement to this morning’s mortgage rates.

With no data scheduled for release tomorrow and only weekly unemployment claims due Thursday, look for similar action in bonds the next two days. I feel there is still more roo m for bonds to improve and mortgage rates to move lower, so I am holding the float recommendation for the time being. However, that may change at any time.

The only other data scheduled for release this week is September’s Existing Home Sales Friday morning. This report gives us an indication of housing sector strength and mortgage credit demand. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.

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: bond, bond market, bond yields, closing, existing home sales, Float, mortgage credit, mortgage rates, rate, refinancing a home, release tomorrow, stock losses, stock markets, Tuesday, unemployment claims

Rate Lock Advisory – Friday Sep. 19th

Rate Lock Advisory – Friday Sep. 19th

Friday’s bond market has opened sharply lower following a huge rally in stocks. The stock markets are reacting favorably to the news of further Fed intervention in the banking crisis. This has pushed the Dow higher by 375 points and the Nasdaq up 71 points. The effect on bonds has not been pretty. The bond market is currently down 53/32, which will likely push this morning’s mortgage rates higher by approximately .625 of a discount point or slightly more than 1/8 of a percent in rate.

The stock market reaction to the Fed news isn’t exactly surprising. Neither is the bond market’s reaction to the stock rally. The same funds that were shifted into bonds while stocks were tanking are now being moved out and back into stocks. This has driven bond yields and mortgage rates much higher. I suspect that the markets will stabilize sometime early next week, as long as we don’t get more news.

I would not be surprised to see upward revisions to mortgage rates this afternoon. Accordingly, I am holding the lock recommendations until the markets seem to calm down. Once this happens, I most likely will be shifting back to a float position for longer term periods and possibly short-term periods. The decision will be made once the markets settle down and we can see where the major indexes and bond market stand.

Next week is pretty light in terms of economic releases. There are a handful of reports scheduled, but they don’t begin until mid-week and only one of them is considered to be of high importance. 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… Lock 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: banking crisis, bond, bond market, bond yields, closing, economic releases, lock, mortgage rates, rate, refinancing a home, stock, stock market, stock markets, stock rally, upward revisions, week

Daily Rate Lock Recommendation – 05/09/2008 12:39:00 PM EST

Friday’s bond market has opened in positive territory following early stock weakness. The stock markets are showing losses with the Dow down 106 points and the Nasdaq down 8 points. The bond market is currently up 9/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

March’s Goods and Services Trade Balance report was today’s only economic data on the calendar. It revealed a $58.2 billion trade deficit that was well below forecasts. However, this data is not considered to be of high importance to the bond market or mortgage rates and therefore has had little impact on the markets today.

This was a light week for economic releases, so I did not expect to see much fluctuation in the markets and mortgage rates. I still feel bond yields are at the upper end of a cycle and that stock prices have more room to fall. I am expecting stocks to move lower, making bonds more attractive to investors. This shou ld lead to funds shifting out of stocks and into bonds in the near future. Accordingly, I am holding the float recommendations for the time being.

Next week is busier in terms of economic reports than this week was. Generally speaking, it will be an average week with five relevant reports on tap. However, two of those are considered to be very important to the markets and mortgage rates. There is no relevant news scheduled for release Monday, but look for details on next week’s event in Sunday’s weekly preview.

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 inter est of all/any other borrowers.

Tags: balance report, bond, bond market, bond yields, closing, economic releases, economic reports, Float, mortgage rates, refinancing a home, relevant news, relevant reports, stock, stock markets, today, Trade, week