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Daily Mortgage Rate Lock Advisory Monday 06/22/09
Monday’s bond market has opened in positive territory following heavy selling in stocks. The stock markets are starting the week with the Dow down 135 points and the Nasdaq down 43 points. The bond market is currently up 16/32, which should improve this morning’s mortgage rates approximately .375 – .500 of a discount point over Friday’s morning rates.
There is no relevant economic news scheduled for release today. Tomorrow brings us the first data with the release of May’s Existing Home Sales report. The National Association of Realtors will give us figures on last month’s home resales. This data helps us measure housing sector strength and mortgage credit demand, but it is one of the lesser important reports of the week. It is expected to show an increase in sales from April to May.
The FOMC meeting that begins tomorrow will adjourn Wednesday afternoon. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting. But, as we have seen so many times in the past, it is the post meeting statement that often creates the most volatility in the markets. They could give an opinion of the overall economy or inflation, hinting at a possible future move or lack of one. Statements like these could cause a knee-jerk reaction in the markets and possibly mortgage pricing Wednesday afternoon.
Overall, there are six reports scheduled for release this week in addition to the FOMC meeting. The most active day should be Wednesday due to the importance of the data and FOMC meeting. Friday’s news may also affect mortgage rates, but likely not as much as earlier days. This would definitely be a good week to maintain constant contact with your mortgage professional.
Also worth noting is the fact that the Fed will be selling $104 billion in new debt this week. These sales may influence trading enough to affect mortgage rates. There are sales every day except Friday but the two most likely to affect rates are Wednesday and Thursday’s sales. If they are met with a strong demand, we could see bond prices rise some during afternoon trading. This could lead to afternoon improvements to mortgage rates. But, if the sales draw a lackluster interest from investors, mortgage rates may move higher during afternoon trading.
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.
Daily Mortgage Rate Lock Advisory – Thursday June 19, 2009
Friday’s bond market has opened in positive territory as investors digest the week’s events. The stock markets are showing gains with the Dow up 50 points and the Nasdaq up 22 points. The bond market is currently up 4/32, but we will still see an increase in this morning’s mortgage rates due to weakness late yesterday.
There is no relevant economic data scheduled for release today. This makes it likely that bonds will be influenced mostly by changes in the stock markets today. As long as the major stock indexes remain calm, I would expect bonds and mortgage rates to follow suit. If the stock markets give back this morning’s gains, bonds may react favorably as the day goes on. However, afternoon weakness seems to be routine lately so we should go into the weekend with a cautious approach.
Next week is fairly active in terms of economic releases. There are several scheduled for release
that may influence mortgage pricing, but we also have an FOMC meeting on the calendar next week. In addition to those items, there is another round of Treasury auctions on the agenda that may also affect bond trading and mortgage rates.
None of the economic data or relevant events take place on Monday, so look for it to be a day of preparation for the week’s events. Unless something positive happens or is announced over the
weekend, there is little to lead us to believe Monday will be a strong day for bonds. But look for more details on next week’s data and relevant events 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 interest of all/any other borrowers.
Daily Mortgage Rate Lock Advisory – Thursday June 18, 2009
Thursday’s bond market has opened in negative territory as yesterday’s afternoon weakness continues into this morning’s trading. The stock markets are showing gains with the Dow up 82 points and the Nasdaq up 2 points. The bond market is currently down 17/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point over yesterday’s morning rates.
The Labor Department reported early this morning that 608,000 new claims for unemployment benefits were filed last week. This was slightly higher than what analysts had expected, but not enough of a difference to have much influence on mortgage pricing.
The Conference Board gave us today’s second piece of news with the release of its Leading Economic Indicators (LEI) for May. It revealed a 1.2% increase that exceeded forecasts and points towards a sharp increase in economic activity over the next three to six months. This is bad news for bonds because strengthening economic activity makes bonds less appealing to investors and leads to higher mortgage rates.
Yesterday’s morning rally in bonds was short-lived as trading turned sour as the day went on. What looked like a potentially wonderful day for mortgage shoppers ended up being a bad day. A combination of a couple of factors led to the selling, including a weakening dollar that makes U.S. securities less valuable to international investors. The negative tone has carried into this morning’s trading and with no important economic data this afternoon or tomorrow to stop the selling, we may see mortgage rates revise higher this afternoon and possibly tomorrow.
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…
Daily Mortgage Rate Lock Advisory – Wednesday Apr. 22nd
Rate Lock Advisory – Wednesday Apr. 22nd
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Wednesday’s bond market has opened in negative territory with no relevant economic news and early stock gains making bonds less attractive. The Dow is currently up 60 points while the Nasdaq has gained 28 points. The bond market is currently down 13/32, which should equate to an increase in this morning’s mortgage rates of approximately .250 of a discount point.
There is no relevant data scheduled for release again today, so look for any movement in bond prices and mortgage rates to come as a result of a swing in stock prices. Yesterday’s afternoon weakness in bonds was not a complete surprise and we may have more of it today. Accordingly, this may be a good time to lock a rate if closing in the immediate future.
We do have some relevant data scheduled for release tomorrow. The National Association of Realtors will post March’s Existing Homes Sales early tomorrow morning. They are expected to show a drop from February’s sales, but this data is not considered highly important. It can however, influence trading and lead to slight changes in mortgage rates if it varies greatly from forecasts.
Also tomorrow is the weekly release of unemployment figures from the Labor Department. They are expected to show that 639,000 new claims for benefits were filed last week. This would be an increase from the previous week’s total. The higher the number of claims, the better the news for bonds and mortgage 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.
©Mortgage Commentary 2009
Daily Mortgage Rate Lock Advisory – Tuesday Mar. 24th
Rate Lock Advisory – Tuesday Mar. 24th
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Tuesday’s bond market has opened in negative territory with no relevant data scheduled for release today. The stock markets are showing minor losses compared to yesterday’s significant rally with the Dow down 42 points and the Nasdaq down 14 points. The bond market is currently down 9/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.
Today’s selling does not completely surprise me. After the size of last week’s rally, there is still room for profit taking so that traders can capture the gains from that rally. They also need to prepare for upcoming economic reports, beginning with next week’s highly important data. With this being a fairly uneventful week in terms of expected announcements and the level of importance of the economic news on tap, traders are taking the opportunity to reposition their portfolios and prepare for the next few weeks.
There are two reports scheduled for release tomorrow. The first is the week’s most important and comes from the Commerce Department. They will release February’s Durable Goods Orders early tomorrow morning. This report gives us a measurement of manufacturing sector strength by tracking new orders for big-ticket items, or products that are expected to last three or more years. This data is known to be volatile from month to month but is still considered to be of high importance. Analysts are expecting it to show a decline in new orders of approximately 2.4%. A smaller decline would be considered a negative for bonds and could lead to higher mortgage rates tomorrow morning.
The second of the day will be released at 10:00 AM ET. February’s New Home Sales report is expected to show a small decline in sales of newly constructed homes. But with tomorrow’s report covering only approximately 15% of all home sales, its result will likely have less of an impact on mortgage rates than yesterday’s Existing Home Sa les report did.
Thursday and Friday bring us the release of a couple of moderately important reports. Thursday’s final reading to the 4th Quarter GDP will likely not influence trading or mortgage rates much. Friday’s Personal Income and Outlays data, along with the revised reading to this month’s University of Michigan Index of Consumer Sentiment are a little more important to rates than Thursday’s report is, but both are generally considered to be only moderately important. In other words, it will likely take a large variance from forecasts for them cause a noticeable change in 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 fin ancing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2009
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Daily Mortgage Rate Lock Advisory – Friday Mar. 20th
Rate Lock Advisory – Friday Mar. 20th
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Friday’s bond market has opened in negative territory this morning with no relevant economic news to drive the markets. The stock markets are relatively flat with the Dow up a few points and the Nasdaq down the same. 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 over yesterday’s morning rates.
As expected, we saw some pressure in bonds late yesterday and this morning. This by no means is a point of concern for me. The selling or balancing of portfolios is common after such a drastic move in such a short period of time. I am still quite optimistic that mortgage rates still have more room to improve in the near future.
There are no relevant economic reports being released today. Fed Chairman Bernanke is giving a speech at noon today to a bankers’ conference in Phoenix, Arizona. It is not considered to be an important speech that will likely affect the markets or mortgage rates. Whenever he speaks publicly there is always a possibility of the markets reacting, but the likelihood of seeing any reaction that will change mortgage rates is minimal in my opinion.
Next week is fairly busy with economic releases, but none are considered to be of extreme importance. There are reports scheduled for several days of the week, including Monday’s posting of February’s Existing Home Sales data. Look for more details on next week’s events in Sunday evening’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 b est interest of all/any other borrowers.
©Mortgage Commentary 2009
Daily Mortgage Rate Lock Advisory – Thursday Mar. 19th
Rate Lock Advisory – Thursday Mar. 19th
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Thursday’s bond market has opened in positive territory this morning as yesterday’s afternoon news has continued into this morning’s trading. The stock markets are not boding so well with the Dow down 37 points and the Nasdaq down 3 points. The bond market is currently up 7/32, which will likely keep mortgage rates near yesterday’s afternoon pricing. Overall, this morning’s rates should be approximately .625 of a discount point lower than yesterday’s morning rates. This equates to an improvement of a little more than .125 of a percent in rate.
Today’s economic data did not heavily influence trading or mortgage rates. The Labor Department gave us weekly unemployment claim figures, saying that 646,000 new claims for benefits were filed last week. This was a little lower than expected, but offsetting that number was news that the number of continuing claims reached a record number. Generally speaking, this data is not considered to be of high importance to the markets, so its impact on rates is usually limited.
The second piece of news was February’s Leading Economic Indicators (LEI). The Conference Board reported that the index fell 0.4% last month, which was stronger than the 0.6% decline that was expected. However, they also revised January’s reading weaker by 0.3%, effectively making this morning’s results a non-factor in the markets. But it does indicate that economic conditions are expected to weaken moderately over the next several months and that is favorable for bonds.
There is no relevant economic news scheduled for release tomorrow. I would not be surprised to see the bond market give back a little of this week’s gains as the markets stabilize. This could lead to a small increase in mortgage rates if true. Therefore, we may want to consider locking an interest rate if closing in the immediate future. The longer-term out look is still quite favorable for mortgage shoppers in my opinion t hough.
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.
©Mortgage Commentary 2009
Daily Mortgage Rate Lock Advisory – Wednesday Mar. 18th
Rate Lock Advisory – Wednesday Mar. 18th
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Wednesday’s bond market has opened in positive territory following early stock losses and despite stronger than expected inflation news. The stock markets are posting sizable losses with the Dow down 128 points and the Nasdaq down 11 points. The bond market is currently up 16/32, but we will likely see little change in this morning’s mortgage rates as the markets await the Fed’s words later this afternoon.
The Labor Department gave us today’s important data with the release of February’s Consumer Price Index (CPI). It showed a 0.4% rise in the overall reading and a 0.2% increase in the core data reading. Both readings were slightly stronger than expected, indicating prices at the consumer level of the economy were higher than thought. While that is bad news for bonds and mortgage rates because inflation erodes the value of a bond’s future fixed interest payments, the market seems to have downplayed the data in this morning’s trading.
This week’ s FOMC meeting will adjourn at 2:00 PM ET today. There is not likely to be any change in short-term interest rates, but the markets will be looking for any indication if the Fed will be buying bonds as part of its effort to keep the markets liquid. If the Fed does start buying the debt, it should ease investor concerns about the amount of the debt that has been sold to fund the economic recovery and bailout programs. This would also likely prevent China, who made concerning comments last week, from selling some of their massive holdings in U.S. securities. The Fed move would also likely help keep mortgage rates low, possibly even driving them lower than current levels.
If the post-meeting statement indicates that the Fed is ready to start buying bonds, we could see an afternoon rally that may revise mortgage pricing lower this afternoon. However, any hint that the move may be delayed or is not going to happen would likely lead to selling in bonds and higher m ortgage rates later today.
Look for an update to this report shortly after the markets have an opportunity to react to the statement.
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.
©Mortgage Commentary 2009
Daily Mortgage Rate Lock Advisory – Tuesday Mar. 17th
Rate Lock Advisory – Tuesday Mar. 17th
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Tuesday’s bond market has opened up slightly despite stronger than expected economic news. The stock markets have fluctuated between positive and negative territory during early morning as they look for direction. They are currently showing small gains with the Dow up 20 points and the Nasdaq up 17 points. The bond market is currently up 5/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.
Today’s big news came from the Labor Department who reported that February’s Producer Price Index (PPI) rose only 0.1% compared to a forecast of 0.4%. That was the good news because it means that inflationary pressures at the producer level of the economy were lower than thought. The bad news came from the core reading that excludes more volatile food and energy prices. It was expected to rise only 0.1% last month but actually rose 0.2%. This means that core prices were higher than analysts thought, but fortunately n ot enough to create a sell atmosphere in the bond market.
February’s Housing Starts were also released this morning, revealing an unexpected spike in construction starts of new homes. Today’s report showed a 22% jump in starts of new homes when analysts were expecting to see a decline for the ninth consecutive month. This surprise is good news for the housing market, which can be translated as bad news for bonds, but since it is considered one of the less important reports we see each month, its impact on today’s trading and mortgage rates has been minimal.
Tomorrow morning brings us the release of February’s Consumer Price Index (CPI), which measures inflationary pressures at the very important consumer level of the economy. Its results can definitely 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 impor tant core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall tomorrow.
The FOMC meeting that began today and will adjourn at 2:00 PM ET tomorrow. With key short-term interest rates practically at 0% already, there is not much the Fed can do with monetary policy at this meeting. They have previously stated that they expect rates to remain near zero for some time. Therefore, the anxiety of the post-meeting statement should be minimal and the likelihood of a major market reaction to the statement is reduced significantly. If the statement references a time frame of an economic recovery, we may see the markets react if it reveals any surprises. Other than that, I am not expecting too much movement in mortgage rates tomorrow afternoon.
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 2 0 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.
©Mortgage Commentary 2009
Daily Mortgage Rate Lock Advisory – Monday Mar. 16th
Rate Lock Advisory – Monday Mar. 16th
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Monday’s bond market has opened flat with the stock markets mixed during early trading. The Dow is currently up 48 points while the Nasdaq has lost 9 points. The bond market is currently nearly unchanged from Friday’s close, but we will still likely see an increase in this morning’s mortgage rates of approximately .250 of a discount point due to weakness Friday.
Today’s only relevant economic news was February’s Industrial Production report. It showed a drop in output at U.S. factories, mines and utilities of 1.4% last month. This was a little weaker than expected but indicates that manufacturing activity was slightly softer than thought. That is good news for bonds and mortgage rates, but not enough to spur a bond rally.
The Labor Department will post February’s Producer Price Index (PPI) early tomorrow morning. This index measures inflationary pressures at the producer level of the economy. There are two portions of the index- the overall rea ding and the core data. The core data is more important and watched more closely because it excludes more volatile food and energy prices. If the index shows a large increase, inflation concerns may rise, making long-term investments such as mortgage-related bonds less attractive to investors. This would lead to higher mortgage rates tomorrow morning. Current forecasts are calling for a 0.4% rise in the overall reading and a 0.1% increase in the core data.
Also tomorrow is the release of February’s Housing Starts, but it will likely not have much of an impact on mortgage rates. It gives us a measurement of housing sector strength and future mortgage credit demand, but is usually considered to be of low importance to the financial markets. It is expected to show a decline in new starts from January to February.
Overall, look for Wednesday to be the most important day of the week due to the CPI release. Tomorrow may also be an active day for rates with t he PPI on tap. But the wildcard is whether stocks continue last week’s gains or if they move lower again. Stock strength would likely draw funds from bonds and lead to higher mortgage rates. However, if the major indexes fall again, funds may shift into bonds, leading to lower 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.
©Mortgage Commentary 2009
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