Daily Mortgage Rate Lock Advisory

Rate Lock Advisory – Wednesday Feb. 25th

WEDNESDAY AFTERNOON UPDATE:

The bond market has turned sour as investors again worry about the amount of new debt being sold to fund the stimulus and Fed bailout packages. The stock markets rallied off this morning’s lows during early afternoon trading but have since given back those gains to currently stand at this morning’s levels. The Dow is now down 80 points while the Nasdaq is down 16 points. The bond market has fallen from this morning’s levels to currently stand down 39/32, which will likely cause an upward revision to this afternoon’s mortgage rates of approximately .375 of a discount point from this morning’s rates.

Today’s only economic data was January’s Existing Home Sales that showed a decline in home resales of 5.3%. This was much weaker than expected and the lowest level of sales in almost 12 years. That is good news for bonds and mortgage rates, but this data is not considered to be of high importance and unfortunately has not influenced today’s rates.

The only important data scheduled for release tomorrow is January’s Durable Goods Orders data. This data gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. A larger drop than the 2.5% that is expected would be good news for the bond market and mortgage rates. This data is quite volatile from month-to-month, so large swings are fairly normal.

We will also get weekly unemployment claims from the Labor Department, who are expected to show that 625,000 new claims were filed last week. Since this data tracks a week’s worth of claims, it usually does not affect mortgage rates too much, but can if it varies greatly from forecasts.

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 clos ing 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.

Rate Lock Advisory – Wednesday Feb. 11th

Wednesday’s bond market has opened in positive territory again as traders continue to digest yesterday’s activities on the economic stimulus and Fed bailout packages. The stock markets are rebounding from yesterday’s sell off but have only been able to recover part this losses so far. The Dow is currently 55 points and the Nasdaq is up 8 points. The bond market is currently up 8/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

Today’s only economic news was December’s Goods and Services Trade Balance that showed a trade deficit of $39.9 billion in December. This was a larger than expected deficit with latest forecasts calling for it to stand at $35.7 billion. But it was still the lowest trade deficit since February 2003. Unfortunately, this data is not considered to be of high importance to the bond market and mortgage rates.

The second stage of this week’s quarterly refunding or sales of govern ment debt is today with 10-year Treasury Notes being sold. The results of the sale will be posted at 1:00 PM ET. If it was met with strong demand, easing recent fears about the amount of debt being sold to fund the economic stimulus and Fed bailout programs, we should see bond prices move higher during afternoon trading. This may lead to a downward revision in mortgage rates. However, if the sale was met with a poor demand, we could see selling in bonds this afternoon that will lead to upward revisions to mortgage rates.

Tomorrow morning brings us the release of January’s Retail Sales data. This report is very important to the financial markets because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched quite closely. If tomorrow’s report reveals weaker than expected sales, the bond market should thrive and mortgage rates will fall. However, a stronger reading than current forecast of a d ecline in sales of 0.3% may drive mortgage rates higher tomrorow.

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.

Rate Lock Advisory – Tuesday Nov. 18th

Tuesday’s bond market has opened in positive territory again, despite early stock gains. The stock markets are rebounding from yesterday’s 223 point loss in the Dow with fairly strong gains during morning trading. The Dow is currently up 181 points while the Nasdaq has gained 11 points. The bond market is currently up 9/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

The Labor Department gave us the first of the week’s two key inflation readings. They reported that the PPI fell a whopping 2.8% that was a much larger drop than analysts had forecasted. However, the more important core data reading that excludes more volatile food and energy prices rose 0.4% when analysts were expecting to see a 0.1% rise. This means that prices for non food and energy costs rose more than expected, which is considered bad news for bonds and mortgage rates.

Today’s markets are being boosted by favorable comme nts by Treasury Secretary Paulson that the Fed bailout program was making progress. Many lawmakers had questioned the usage of the money for the program but market participants liked what they heard, helping to fuel this morning’s buying in stocks and bonds.

Tomorrow’s only data is October’s Housing Starts. This data gives us an indication of housing sector strength, but usually does not have a noticeably impact on mortgage rates. I don’t expect this month’s version to be any different unless it varies greatly from analysts forecast. It is expected to show a decline in starts of new homes.

Tomorrow afternoon brings us the release of the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates highe r tomorrow afternoon. However, if they indicate a likelihood of another rate cut in the coming months, we should see the bond market rise and mortgage rates drop 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.

Rate Lock Advisory – Thursday Oct. 2nd

Thursday’s bond market has opened in positive territory following weaker than expected economic news and another round of stock losses. The stock markets seem to be worried about the potential approval of the Fed bailout program that the Senate approved last night. The result is the Dow down 220 points and the Nasdaq losing 53 points. The bond market is currently up 24/32, which will likely improve this morning’s mortgage rates by .125 – .250 of a discount point.

The Commerce Department gave us August’s Factory Orders data late this morning, saying that new orders for durable and non-durable goods fell 4.0%. This was a much larger decline than was expected and indicates that the manufacturing sector is still slowing. That is good news for the bond market and mortgage rates.

Also released this morning were last week’s unemployment claim figures. The Labor Department said that new claims rose to 497,000 last week, reaching a seven year high. Thi s is also good news because it raises concerns about what tomorrow’s monthly Employment report will show.

The Labor Department will post September’s Employment report early tomorrow morning. This report will reveal the U.S. Unemployment rate, number of new payrolls added and average hourly earnings. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, falling payrolls and a drop in earnings.

Weaker than expected readings should help boost bond prices and lower mortgage rates tomorrow. However, stronger then forecasted readings would not be good news for mortgage pricing. Analysts are expecting to see the unemployment rate 6.1%, a decline in new payrolls of approximately 105,000 and a 0.3% increase in earnings.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking pl ace 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.

Rate Lock Advisory – Wednesday Oct. 1st

Wednesday’s bond market has opened in positive territory as investors show concern about today’s Senate vote on the Fed bailout plan. The stock markets are showing losses with the Dow down 113 and the Nasdaq down 22 points following yesterday’s record gain in the Dow. The bond market is currently up 33/32, but we will still see an increase in this morning’s mortgage rates of approximately .375 of a discount point due to yesterday’s sell-off in bonds as stocks rallied.

Also helping boost bonds today was a large drop in the Institute for Supply Management’s (ISM) manufacturing index for September. Today’s release revealed a reading of 43.5, which was its lowest reading since October 2001. Analysts were expecting to see a reading of 49.5, meaning manufacturer sentiment about business conditions was much lower than thought. This is good news for bonds because a weakening manufacturing sector indicates slowing economic activity and eases inflation concerns.

We need to again keep an eye on the stock markets and Fed bailout vote. The Senate is expected to vote on their plan this evening, after the markets close. Current polls are expecting the measure to pass the Senate vote, but the real question is what the House will do with it once they get it. Since current expectations are showing passage by the Senate, I don’t think we will see a massive sell off in stocks again today. It seems that the markets are more concerned about the House approving the bill if the Senate does approve it. As we get closer to the House vote, we will likely see the volatility in stocks rise.

The Commerce Department will post August’s Factory Orders data late tomorrow morning. This manufacturing sector report is similar to last week’s Durable Goods Orders release, but includes orders for non-durable goods. It can usually impact the financial markets enough to change mortgage rates if it varies from forecasts by a wide margin. Cu rrent forecasts are calling for a decline in new orders of approximately 2.9%. An unexpected rise could drive mortgage rates higher, while a weaker than expected reading should push them lower tomorrow. However, look for the results form tonight’s Senate vote to heavily influence trading in the markets tomorrow morning.

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.

Rate Lock Advisory – Tuesday Sep. 30th

Tuesday’s bond market has well in negative territory following a stock rebound that has shifted funds back away from bonds. The stock markets are rebounding after yesterday’s walloping with the Dow up 260 points and the Nasdaq up 30 points. This means that the major stock indexes have recovered approximately one-third of yesterday’s losses. The bond market benefited form yesterday’s stock sell-off but is suffering today as investors move funds back into stocks. The result is the bond market down 13/32 that will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

Today’s only economic news was September’s Consumer Confidence Index (CCI). It showed a reading of 59.8 that was much higher than forecasts had called for. Analysts were expecting to see a reading of 55.0, meaning that consumers had more confidence in their own financial situation than was expected. This is considered bad news for bonds and mortgage rates because it indicates that consumers are more willing to make large purchases in the near future.

Tomorrow only relevant data is the Institute for Supply Management’s (ISM) manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting to see a 0.4 decline from last month’s 49.9 reading. The 50.0 benchmark is extremely important because a reading below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall tomorrow morning.

We need to keep an eye on the stock markets and Fed bailout attempt. I don’t think we will see much come today as the markets take a breather, but we probably will see more volatility in stocks before the end of the week. This could affect bond prices and mortgage rates. Generally speaking, look for stock weakness to lead to bond gains and lower mortgage rates as investors move funds into the safety of bonds. If the stock markets continue to move higher, we should see bonds suffer and mortgage rates move higher.

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.

Rate Lock Advisory – Friday Sep. 26th

Friday’s bond market has opened in positive territory following a negative open in stocks and weaker than expected economic news. The markets are reacting more to news of the possible failure of the Fed bailout than today’s economic data. The stock markets are showing losses with the Dow down 32 points and the Nasdaq down 16 points. The bond market is currently up 11/32, but I don’t believe we will see much of a change in this morning’s mortgager rates.

Neither of today’s economic releases are considered to be of high importance, but both gave us results that were favorable to bonds. The first was the final revision to the 2nd Quarter Gross Domestic Product (GDP) that showed a revised rate of growth of 2.8%. This was a sizable downward revision to the previous estimate of a 3.3% annual rate and lower than analysts had expected for this revision. This means that the economy grew at a slower rate than many had thought during the 2nd quarter of the year.

The second report of the day and the final report of the week was the revised reading of the University of Michigan’s Index of Consumer Sentiment. The preliminary reading that was released earlier this month revealed a 73.1 reading, but today’s update showed a 70.3 reading. This was also lower than forecasts and hints that consumers are less optimistic about their own financial situations than thought, which usually means they are less likely to make large purchases in the near future.

Next week is packed with economic news for the markets to digest. There is relevant data scheduled for release every day of the week, beginning with August’s Personal Income and Spending data Monday morning. Look for 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.

Rate Lock Advisory – Wednesday Sep. 24th

Wednesday’s bond market has opened in positive territory in what hopefully is a sign of stabilization. The stock markets are mixed with the Dow down 40 points and the Nasdaq up 8 points. The bond market is currently up 6/32, but we will likely see this morning’s mortgage rates move higher by approximately .125 – .250 of a discount point due to weakness late yesterday.

Today’s only economic news was the release of August’s Existing Home Sales report. The National Association of Realtors reported that home resales in the U.S. fell more than expected last month. This indicates that the housing sector has still not bottomed out. That is good news for bonds because a soft housing sector will likely slow economic activity and ease inflation concerns.

Fed Chairman Bernanke is speaking to a Joint Economic Committee of Congress today, where he has basically warned that the Fed bailout program needs to be enacted quickly to stabilize the financial system. His words have led to some fluctuation in the markets this morning, but don’t seem to be of significant surprise to traders. Accordingly, I don’t believe we will see any further changes to mortgage rates as a result.

August’s Durable Goods Orders will be posted early tomorrow morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for a drop in orders in the neighborhood of 1.3%. A larger decline could help bond prices and cause mortgage rates to drop tomorrow. However, a smaller than expected decrease would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

Also tomorrow morning will be the release of August’s New Home Sales. It is expected to show that sales of new homes rose slightly in August. As with today’s Existing Home Sales data, this report will likely not have a significant impact on m ortgage 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.