Daily Mortgage Rate Lock Advisory

Daily Mortgage Rate Lock Advisory – Thursday Mar. 19th

Rate Lock Advisory – Thursday Mar. 19th

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

Tags: bond, bond market, closing, economic data, Float, immediate future, labor department, leading economic indicators, LEI, mortgage shoppers, rate, release tomorrow, stock markets, unemployment claim, yesterday

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.

Tags: bond, bond market, bond trading, economic data, institute of supply management, ism manufacturing index, mortgage rates, negative news, release tomorrow, relevant news, report, sector index, spending

Daily Mortgage Rate Lock Advisory – Thursday Jan. 22nd

Rate Lock Advisory – Thursday Jan. 22nd

Thursday’s bond market has opened in negative territory yet again despite significant stock weakness. The Dow is currently down 220 points while the Nasdaq has lost 45 points and it appears that those losses may widen as the day progresses. The bond market is currently down 19/32 as supply concerns continue to weigh on trading. This will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

There were two pieces of economic data released this morning and both gave us much weaker than expected results. Unfortunately, it appears bond traders are ignoring the data since they are not usually considered to be of high importance. This is despite wide variances between forecasts and actual readings.

The first was December’s Housing Starts that showed a decline in new home starts that was quadruple the drop that was expected. This gives further credence to the theory that the housing sector has not bottomed out ye t.

The second piece of data was weekly unemployment figures from the Labor Department. They reported that 589,000 new claims for benefits were field last week, greatly exceeding the 543,000 claims that were forecasted. This points to a still softening labor market and does not give hope of a economic recovery anytime soon without stimulus assistance.

There is no relevant economic data scheduled for release tomorrow, so I would not be surprised to see more weakness in bonds and pressure in mortgage rates. It is becoming clear that the market is quite concerned about the amount of debt that the government will need to sell to meet goals that the new administration is expecting.

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 tak ing 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 traders, closing, economic data, housing starts, lock, negative territory, refinancing a home, release tomorrow, supply concerns, Thursday, unemployment figures, weakness

Rate Lock Advisory – Wednesday Oct. 22nd

Rate Lock Advisory – Wednesday Oct. 22nd

Wednesday’s bond market has opened in positive territory as investors continue to dump stocks this morning. The stock markets showing significant losses with the Dow currently down 324 points and the Nasdaq down 36 points. The bond market is currently up 10/32, which should improve this morning’s mortgage rates by another .125 to .250 of a discount point.

There is no relevant economic data scheduled for release today, therefore the bond market is relying on stocks for direction. With stocks still falling, investors are eyeing bonds as a parking space for funds, at least temporarily. This has benefited mortgage rates this week, however, I don’t see that as a situation that will likely last long. Accordingly, I am shifting to a lock recommendation for immediate and short-term closings.

The only data scheduled for release tomorrow is weekly unemployment claims from the Labor Department. Analysts are expecting to see that 465,000 new claims were filed last week. This would be a slight increase from the previous week and would basically be good news for the bond market and mortgage rates. But, since this data tracks only a week’s worth of claims, its influence on the markets is usually limited unless it varies greatly from forecasts.

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…. 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 pla ce 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, closing, economic data, existing home sales, labor department, lock, mortgage credit, mortgage rates, refinancing a home, Release, release tomorrow, stock markets, unemployment claims, week

Daily Rate Lock Recommendation – 08/04/2008 12:18:00 PM EST

Monday’s bond market has opened down slight following the release of stronger than expected economic data. The stock markets are also showing losses with the Dow down 18 points and the Nasdaq down 15 points. The bond market is currently down 4/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point. Today brought us the release of two pieces of economic news. The first was June’s Personal Income and Outlays that revealed a 0.1% and a 0.6% rise in spending. Both readings were stronger than expected, indicating that consumers have more money available to spend and are using it. This is bad news for the bond market and mortgage rates because consumer spending makes up two-thirds of the U.S. economy. The second report of the day was June’s Factory Orders. It showed a much larger increase in new orders than was expected. The 1.7% jump in orders was a full percentage point higher than analysts had expected. That means that the manufacturing sector may be strengthening faster than many had thought, which is also bad news for bonds and mortgage pricing. The rest of week brings us little economic data that is likely to affect mortgage rates. However, we do have the Federal Open Market Committee (FOMC) meeting tomorrow. The meeting will adjourn at 2:15 PM and is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Bond traders will be watching the post meeting statement very carefully. Generally speaking, a hint of rate hikes in the future will be construed as an indication that inflation is still a concern and would likely lead to bond selling and increases to mortgage rates. If the statement gives an indication that the Fed is not as concerned with inflation as previously noted, the bond mar ket should rally, leading to lower mortgage rates. Overall, I am expecting to see a choppy week in trading and mortgage rates. We will likely see the most movement in rates tomorrow with the FOMC meeting. Wednesday’s Treasury auction may also affect rates during afternoon trading that day, but I suspect that the rest of the week will be driven by stock market gains or losses. 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 traders, closing, economic data, federal open market committee, Float, mortgage rates, open market committee, outlays, rate adjustments, rate hikes, Release, stock markets, U.S., week