Daily Mortgage Rate Lock Advisory

Daily Mortgage Rate Lock Advisory – Thursday Feb. 5th

Rate Lock Advisory – Thursday Feb. 5th

Thursday’s bond market has opened in positive territory following the release of favorable economic reports. The stock markets are showing gains with the Dow up 44 points and the Nasdaq up 17 points. The bond market is currently up 15/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

Both of this morning’s important releases gave us favorable results. Even weekly unemployment numbers that are not considered highly important came in weaker than expected. The Labor Department said that 626,000 new claims for benefits were filed last week. This was the largest weekly filing since October 1982 and helps support the theory that tomorrow’s monthly employment report will show bleak numbers.

The two more important reports were December’s Factory Orders and 4th Quarter Productivity numbers. The factory orders data showed a larger than expected drop of 3.9% in new orders. This was the fifth consecutive mo nthly decline in orders, which is a first for the report. Analysts were expecting to see a decline of 3.0%, meaning manufacturing activity is slower than thought. In addition, today’s report also revised November’s decline in orders from 4.6% to 6.5% that is now the largest monthly decline since July 2000.

The 4th Quarter Productivity and Costs data was the third piece of news posted this morning. It showed a surprising jump of 3.2% in worker output. This was more than double what analysts had expected, meaning workers were more productive in each hour worked last quarter. This is good news for the bond market and mortgage rates.

Tomorrow morning brings us the release of the almighty Employment report. It will give us the unemployment rate, number of jobs lost or added to the economy last month and average hourly earnings. Analysts are expecting it to show that the unemployment rate jumped 0.3% to 7.5% last month while 500,000 jobs were lost. The average earnings reading is expected to show that earnings rose 0.3%. A higher unemployment rate and larger job loss would be considered favorable news for the bond market and mortgage pricing. If we do get favorable results, I would expect to see bonds rally and mortgage rates fall tomorrow.

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: average earnings, average hourly earnings, bond, bond market, closing, decline, economic reports, employment report, favorable results, Float, mortgage rates, quarter productivity, rate, report, Unemployment, unemployment numbers, unemployment rate

Daily Mortgage Rate Lock Advisory – Thursday Jan. 29th

Rate Lock Advisory – Thursday Jan. 29th

Thursday’s bond market has opened in negative territory, continuing yesterday afternoon’s selling. The stock markets are also showing losses as they give back a good portion of yesterday’s gains. The Dow is currently down 154 points while the Nasdaq has lost 36 points. The bond market is currently down 8/32, which will push this morning’s mortgage rates approximately .125 – .250 higher than yesterday’s revised rates. This should equate to approximately .500 of a discount point higher than yesterday’s morning rates.

This morning’s economic data actually gave us favorable results. The Commerce Department said that new orders for big-ticket items, or Durable Goods, fell 2.6% last month. This was a larger than expected decline, but making the news even better was a significant reduction to November’s orders that was revised from down 1.0 to down 3.7%. This means that orders for products that are expected to last or more years were lower than expected. This is considered good news for bonds because it indicates a still weakening manufacturing sector.

December’s New Home Sales report was also posted this morning, revealing a sharp decline in sales of newly constructed homes. The 14.7% drop in December’s sales were the weakest level of sales since records started being kept on them in 1963. This indicates a still softening housing sector that is generally good news for bonds.

There are three reports scheduled for release tomorrow. The first is one of the most important reports that we see regularly. The initial reading of the 4th Quarter Gross Domestic Product (GDP) will be posted early tomorrow morning. This data is so important because it is considered to be the best measure of economic growth. The GDP itself is the total sum of all goods and services produced in the United States. Its’ results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. There are three readings to each quarter’s activity, each released approximately one month apart. The first, which usually carries the most volatility, is expected to be a decrease of 5.4%. A weaker reading would be great news for the bond market, but the 5.4% decline would be the biggest quarterly drop in 26 years.

The 4th Quarter Employment Cost Index (ECI) is also scheduled for release early tomorrow morning. It measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. It usually has more of an effect on the bond market than the stock markets. Current forecasts are showing an increase of 0.7%. A lower than expected reading would be favorable to bonds and mortgage rates, but the GDP reading will be the biggest influence on trading and rates tomorrow morning.

The last report of the week is the revised reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer co nfidence, which is thought to indicate consumer willingness to spend. I don’t see this data having much of an impact on the markets or mortgage rates due to the importance of the employment index and GDP figures. It is expected to show no change from the preliminary reading of 61.9.

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: big ticket items, bond, bond market, favorable results, GDP, initial reading, manufacturing sector, mortgage rates, negative territory, release tomorrow, stock markets, tomorrow, United States, yesterday

Daily Mortgage Rate Lock Advisory – Wednesday Dec. 24th

Rate Lock Advisory – Wednesday Dec. 24th

Wednesday’s bond market has opened in positive territory despite mixed results from this morning’s economic data. The stock markets are showing gains with the Dow up 46 points and the Nasdaq up 3 points. The bond market is currently 7/32, which will likely improve this morning’s mortgage rates by approximately .250 – .375 of a discount point.

There were two monthly reports released this morning along with weekly unemployment numbers. The first was November’s Durable Goods Orders that showed orders for big-ticket products fell 1.0% last month. This was much stronger than the 3.1% decline that was forecasted, however, October’s 6.2% drop was revised to a decline of 8.4%. That revision help offset some of the surprise from November’s orders, this was still negative news for bonds and mortgage rates.

The second report of the day was November’s Personal Income and Outlays data. The income portion of the report gave us favorable results with 0.2% decline in personal income and a downward revision of 0.2% to October’s income reading. This means that consumers had less income to spend than was expected during those two months. The bad news came in the spending portion of the report that showed a 0.6% decline in consumer spending. It was expected to show a 0.8% drop, meaning consumers spent more than thought.

The third piece of news posted this morning was last week’s unemployment numbers that showed 586,000 new claims for benefits were filed last week. This was nearly 30,000 above what analysts had forecasted. Unfortunately, this data is not given much weight because it tracks a single week’s worth of claims.

The bond market will close early today and remain closed tomorrow in observance of the Christmas Day holiday. The stock and bond markets will be open Friday, but with no relevant economic news scheduled for release and another early close for bonds, I am not expecting to see much m ovement in 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… 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 market, bond markets, closing, decline, downward revision, durable goods orders, favorable results, lock, negative news, outlays, stock markets, unemployment numbers

Rate Lock Advisory – Friday Oct. 3rd

Rate Lock Advisory – Friday Oct. 3rd

Friday’s bond market has opened in negative territory despite favorable results from the Employment report that was posted this morning. The stock markets are rallying as optimism about the House approving the bailout plan grows. The result is a 201 point gain in the Dow and the Nasdaq rising 57 points. The bond market is currently down 24/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

The Labor Department reported this morning that the U.S. Unemployment Rate remained at 6.1% last month, as it was in August. The good news came in the form of the number of payrolls lost and the average earnings reading. Today’s report showed that 159,000 jobs were lost during the month, exceeding the 105,000 loss that was expected. It was also the ninth consecutive monthly loss and the biggest monthly decline since March 2003. The average hourly earnings was forecasted to rise 0.3%, but rose only 0.2%. Both of those readings are favorable to bonds and mortgage rates because they indicate that the employment sector is still weakening and that wages are not rising as quickly as thought.

I would not be surprised to see afternoon revisions to mortgage rates if stock prices continue to rise or give back their current gains. The bond market has been at the mercy of stocks the past two weeks and we may see more volatility this afternoon as the debate about the bailout measure continues. The House could bring the bill to a vote this afternoon, which may heavily influence the markets and mortgage rates. It the vote appears likely to pass, the stock markets will likely rise and bond prices will fall, leading to higher mortgage rates. However, if concern rises that the vote will fail, we could see stock prices fall and bond prices rise enough to improve mortgage pricing this afternoon.

Next week is very light in terms of economic releases scheduled. There is littl e relevant data on the calendar for next week, but we will get the minutes from the last FOMC meeting. Look for more details on next week’s event s 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: average earnings, average hourly earnings, bailout plan, bond, bond prices, closing, economic releases, employment sector, favorable results, lock, negative territory, point gain, stock, stock prices fall, U.S. Unemployment, vote