Daily Mortgage Rate Lock Advisory

Consumer Price Index Latest Numbers

CPI-U, US City Average, All Items:

NSA
-0.2% in Jul 2009
Historical Data

SA
unchanged in Jul 2009
Historical Data

NSA
-2.1% since Jul 2008
Historical Data

CPI-U, US City Average, All Items Less Food and Energy:

NSA
unchanged in Jul 2009
Historical Data

SA
+0.1% in Jul 2009
Historical Data

NSA
+1.5% since Jul 2008
Historical Data

CPI-U, US City Average, Medical Care:

NSA
+0.2% in Jul 2009
Historical Data

SA
+0.2% in Jul 2009
Historical Data

NSA
+3.2% since Jul 2008
Historical Data

CPI-W, US City Average, All Items:

NSA
-0.2% in Jul 2009
Historical Data

SA
unchanged in Jul 2009
Historical Data

NSA
-2.7% since Jul 2008
Historical Data

• SA- Seasonally Adjusted
• NSA- Not Seasonally Adjusted

p- preliminary

Tags: Adjusted, city average, cpi, CPI-U, Energy, medical care, NSA, US City

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 – Thursday Jan. 15th

Rate Lock Advisory – Thursday Jan. 15th

Thursday’s bond market has opened fairly flat despite another round of sizable stock losses. The stock markets are continuing yesterday’s selling with the Dow down 171 points and the Nasdaq down 25 points. The bond market is currently down 2/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

The Labor Department gave us two pieces of economic news this morning. The first was the Producer Price Index (PPI) for December that revealed a decline of 1.9% in the overall reading. This matched forecasts, but the more important core reading that excludes more volatile food and energy prices rose 0.2% when it was expected to rise 0.1%. This indicates that prices at the producer level of the economy that do not include food or energy rose more than expected. That basically is bad news for the bond market because rising prices raises inflation concerns and makes long-term securities such as mortgage-rela ted bonds less attractive to investors. However, tomorrow’s CPI reading that measures inflation at the consumer level of the economy is considered to be of more importance to the markets.

The second Labor Department release today was last week’s initial unemployment claims filings. They reported that 524,000 new claims for benefits were filed last week, exceeding forecasts of 503,000. But since this data is a weekly reading, its results usually do not have much of an impact on the markets or mortgage pricing.

There are three relevant reports on the agenda for tomorrow. The first is December’s Consumer Price Index (CPI). This is also one of the most important monthly reports that we see since it measures inflationary pressures at the consumer level of the economy. The overall index is expected to fall 1.0% while the core data is expected to increase 0.1%. Weaker than expected readings should lead to bond improvements and lower mortgage rates tomorrow since this is the most important of the three.

December’s Industrial Production report is the second report to be posted tomorrow. It will be released at 9:15 AM ET and measures output at U.S. factories, mines and utilities. This gives us a good indication of manufacturing sector strength or weakness. Current forecasts are calling for a decline of 0.8% from November’s production. A larger than expected drop would be good news and should lead to lower mortgage rates Friday as long as the CPI doesn’t reveal any surprises.

The final report of the week is January’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates. Good news would be if it shows a reading weaker than the 60.0 that is expected. However, it is the week’s least important of the five releases and probably will have little im pact on tomorrow’s mortgage rates due to the importance of the CPI and production reports.

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, closing, consumer price index, cpi, index cpi, inflation concerns, initial unemployment claims, lower mortgage, producer level, producer price index, producer price index ppi, stock losses, tomorrow, U.S., volatile food, week

Weekly Mortgage Rate Lock Advisory – Sunday Jan. 11th

Rate Lock Advisory – Sunday Jan. 11th

This week brings us the release of five pieces of economic data to digest. There is no relevant data scheduled for release tomorrow or Tuesday, but there is very important data scheduled for release each of the three remaining days.

December’s Retail Sales data is the first important data and it comes early Wednesday morning. This Commerce Department report measures consumer spending by tracking sales at retail establishments in the U.S. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely. Current forecasts are calling for a decline in sales of approximately 1.1%. A larger drop would be good news for bonds and mortgage rates.

The second report of the week will be released by the Labor Department early Thursday morning. They will post the Producer Price Index (PPI) then, which helps us measure inflationary pressures at the producer level of the economy. Rapidly rising prices raises inflation concerns 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.

There are three relevant reports on the agenda for Friday. The first is December’s Consumer Price Index (CPI). This is also one of the most important monthly reports that we see since it measures inflationary pressures at the consumer level of the economy. It is very similar to Thursday’s Producer Price Index (PPI), but is considered to be of higher importance since it tracks consumer prices. The overall index is expected to fall 1.0% while the core data is expected to increase 0.1%. Weaker than expected readings should lead to bond improvements and lower mortgage rates Friday.

December’s Industrial Production report is the second report to be posted Friday. It will be released at 9:15 AM ET and measures output at U.S. factories, mines and utilities. This gives us a good indication of manufacturing sector strength or weakness. Current forecasts are calling for a decline of 0.8% from November’s production. A larger than expected drop would be good news and should lead to lower mortgage rates Friday as long as the CPI doesn’t reveal any surprises.

The final report of the week is January’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates. Good news would be if it shows a reading weaker than the 60.0 that is expected. However, it is the week’s least important of the five releases and probably will have little impact on Friday’s mortgage rates due to the importance of the CPI and production reports.

Overall, Wedn esday, Thursday or Friday may end up being the most important day of the week. The single most important report is the CPI, but the PPI and Retail Sales reports are also considered to be of high importance and can heavily influence the markets. Therefore, I strongly recommend maintaining contact with your mortgage professional, especially the latter part of the week.

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: closing, commerce department report, consumer price index, cpi, index cpi, inflation concerns, lower mortgage, producer price index, producer price index ppi, report, report measures, retail establishments, retail sales data, U.S., U.S. Since, week

Rate Lock Advisory – Sunday Sep. 14th

Rate Lock Advisory – Sunday Sep. 14th

There are only four pieces of economic news scheduled for release this week and one of them is a highly important inflation reading. We also have another Federal Open Market Committee (FOMC) meeting, which likely will not bring a change to key short-term interest rates. There is a pretty good possibility of seeing a fair amount of volatility in the markets and likely mortgage rates the next several days.

The first report of the week is August’s Industrial Production data tomorrow morning. 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 moderately important but could cause movement in mortgage rates. Analysts are currently expecting to see a 0.3% decline in production. A higher level of output could lead to higher mortgage rates, while a weaker than expected figure should help push rates slightly lower.

August’s Consumer Price Ind ex (CPI) will be released Tuesday morning at 8:30 am ET. The CPI is one of the most important reports we see each and every month. It is considered to be a key indicator of inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. Current forecasts are calling for no change in the overall reading and a 0.2% rise in the core data reading. A larger increase in the core data would likely lead to higher mortgage rates Tuesday, while a smaller increase would be good news.

The FOMC meeting will adjourn at 2:15 PM Tuesday. There is little debate about a possible change to key short-term interest rates at this meeting. The overwhelming consensus is that there will be no change to rates at this meeting. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find the Fed’s expected next move. The wild card is how the ma rkets react to the statement. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates Tuesday afternoon and Wednesday morning.

August’s Housing Starts report will be released early Wednesday morning. This report will probably not have much of an impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand, but is usually considered to be of low importance to the financial markets.

Late Thursday morning, the Conference Board will release its Leading Economic Indicators (LEI). This index attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market will probably fall and mortgage rates will rise slightly. If it shows weaker than expected readings, the bond market may rally and mortgage rates should fall. Current forecasts are calling for a 0.2% decline from July’s reading.

Overall, I expect to see some pressure in bonds tomorrow as investors prepare for Tuesday’s events. Tuesday will most likely be the most important day of the week with the CPI release and the FOMC meeting. If the CPI eases inflation concerns and the Fed statement doesn’t reveal any negative surprises, we will most likely see mortgage rates move lower for the week.

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, core data, cpi, federal open market committee, fomc meeting, key indicator of inflation, LEI, manufacturing sector, mortgage rates, open market committee, overwhelming consensus, term interest, Tuesday, tuesday morning, U.S., week

Daily Rate Lock Recommendation – 08/13/2008 12:21:00 PM EST

Wednesday’s bond market has opened up slightly after this morning’s economic data showed no surprises. The stock markets are showing early losses with the Dow currently down 98 points and the Nasdaq down 8 points. The bond market is currently up 15/32, but we will likely see little change in this morning’s mortgage rates due to weakness in bonds late yesterday.

The Commerce Department gave us July’s Retail Sales numbers early this morning, saying that sales fell 0.1% last month. This matched forecasts and hasn’t had much of an impact on this morning’s bond trading or mortgage rates. The portion of the report that excludes more volatile auto sales showed that sales rose 0.4%, which was slightly below forecasts. That could be considered a bit of good news for bonds, but has not influenced trading as of yet.

Tomorrow morning brings us the release of July’s Consumer Price Index (CPI). The CPI is one of the most important reports we see each month since 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 an increase of 0.4% in the overall and 0.2% in the core data reading. Smaller than expected increases should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing.

Also tomorrow is the weekly release of new unemployment claims by the Labor Department. This release normally has little impact on the bond market or mortgage rates but due to the previous week’s spike to 455,000 claims, analysts will likely be watching this data a little closer than usual. Another increase could send bond prices higher and mortgage rates lower, assuming the CPI doesn’t reveal stronger than expected inflation readings.

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: bond, bond market, bond prices, bond trading, closing, consumer price index, core data, cpi, index cpi, lower mortgage, Release, sales numbers, unemployment claims, volatile food