Daily Mortgage Rate Lock Advisory

Rate Lock Advisory – Tuesday Mar. 3rd

Tuesday’s bond market has opened down slightly following early stock gains. However, the major indexes have given back those gains to currently stand in negative territory. The Dow was up as much as 85 points during earlier trading while the Nasdaq had gained 21 points. But the Dow is currently down 24 points while the Nasdaq has now lost 2 points. The bond market is currently down 5/32, but I am expecting to see an improvement in this morning’s mortgage rates of approximately .125 – .250 of a discount point due to strength yesterday.

There is no relevant economic news scheduled for release today. Fed Chairman Bernanke is speaking to the Senate Budget Committee about the Federal budget and current economic conditions. His words seemed to have fizzled the early stock rally and have pushed traders back into selling mode. If stocks continue to fall further, we may see bonds rally this afternoon and possibly lead to a downward revision in mortgage rates.

Tomorrow’s only relevant data is the Fed Beige Book during afternoon trading. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading tomorrow. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

Thursday and Friday brings us the release of a couple of important economic results, including Friday’s Employment Report. Those reports could drive stock prices lower if they show weaker than expected results, and possibly create a bond rally that will improve mortgage rates even more. But, with the recent volatility in the markets, it is a good idea to remain in contact with your mortgage professional if still floating an interest rate.

If I were consi dering 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 – Monday Mar. 2nd

Monday’s bond market has opened up sharply following significant losses in stocks. The stock markets are showing early losses due to more concerns about banks and the Fed’s need to stabilize the financial system. The Dow is currently down 180 points while the Nasdaq has lost 38 points. The bond market is currently up 27/32, which will likely improve this morning’s mortgage rates by approximately .375 of a discount point.

There were two pieces of economic data released this morning and both showed stronger than expected results. The first was January’s Personal Income and Outlays data that showed personal income rose 0.4% while spending rose 0.6%. Both readings were higher than forecasts, but the income reading was well off expectations. Analysts were calling for a decline in income of 0.2%. This means that consumers had much more income to spend than thought and apparently spent more of it than they had expected. This is considered negative news for bo nds and mortgage rates.

The Institute for Supply Management (ISM) reported late this morning that their manufacturing index for February rose slightly to 35.8. Forecasts had called for a decline in the index, meaning that manufacturer sentiment was higher in the month than thought. This is also bad news for bonds because a strengthening manufacturing sector would indicate and increase in economic activity.

Despite this morning’s data, bonds have drawn interest from investors over more concerns about AIG and other financial institutions. Those concerns have pushed the Dow to its lowest level in approximately 12 years. As investors sell stocks they are moving funds into the safety of bonds. The result is a nice rally in bonds that may continue for a couple of days.

Tomorrow’s only relevant data is the Fed Beige Book during afternoon trading. This report details economic activity throughout the country by region. The Fed relies heavily on t his data during their FOMC meetings, so look for a potential reaction during afternoon trading tomorrow. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

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 – Sunday Mar. 1st

This week brings us the release of six economic reports to be concerned with. Two of the reports are considered to be very important, but nearly all of the week’s releases have the potential to affect mortgage rates. With reports being posted each day except Tuesday, we will likely see a fairly active week in mortgage rates.

The week’s first data comes tomorrow morning with the release of two relevant reports. The first is January’s Personal Income ad Outlays data at 8:30 AM ET, which gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for a decline in income of 0.2% while spending is expected to rise 0.42%. A larger than expected increase in spending would be bad news for the bond market and could drive mortgage rates higher. Weaker than forecasted numbers should help push mortgage rates slightly lower tomorrow.

The Institute for Supply Management (ISM) will release their manuf acturing index for February late tomorrow morning. This index measures manufacturer sentiment and can have a pretty large impact on the financial and mortgage markets if it varies from forecasts. It is expected to show a decline from January’s 35.6 to 34.0 last month. This is important because a reading below 50.0 is a recession indicator, meaning that more surveyed manufacturers felt business worsened during the month than those who felt it had improved. If we see a weaker than expected reading, the bond market could rally. However, a higher than forecasted reading could lead to major selling in bonds, causing mortgage rates to rise.

The Fed Beige Book is the next report scheduled for release and it will be posted Wednesday afternoon. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading Wednesday. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

There two reports scheduled for release Thursday morning. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed an annual rate of 3.2% increase in worker output. Analysts are expecting to see a sizable downward revision to the initial reading. It is expected to be cut to a 1.6% increase in output, meaning workers were not as productive as previously thought during the quarter. Employee productivity is watched fairy closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns.

January’s Factory Orders will be posted late Thursday morning, which will give us a measurement of manufacturing sector strength. This data is similar to last week’s Durable Goods, except this report covers orders for both durable and non-durable goods. Current forecasts are calling for a drop in new orders of approximately 2.1%. A larger than expected drop would be good news for the bond market and could lead to an improvement in mortgage rates.

The biggest news of the week comes Friday morning when one of the single most important monthly reports we see will be posted. The Labor Department will release February’s Employment report at 8:30 AM ET Friday. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a large drop in payrolls and little or no increase in earnings. Current forecasts are calling for 0.3% increase in the unemployment rate to 7.9% and approximately 615,000 jobs lost during the month.

Overall, look for a fairly active week for mortgage rates. I suspect there will be some optimism leading up to Friday’s Employment report, which is of concern to me. I believe the market is expecting to see very weak numbers Friday morning and has already built that into current pricing. The problem is that if it meets forecasts, or is even slightly stronger than expected, we could see bonds drop and mortgage rates rise. Because of this, I may be extending the lock recommendation to longer periods before Friday’s data. Friday is undoubtedly the biggest day of the week, but tomorrow may also bring noticeable movement in mortgage rates. Please be careful this week if still floating an interest rate.

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 m y 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 Dec. 3rd

Wednesday’s bond market has opened in negative territory despite the release of favorable economic news. The stock markets are in positive ground with the Dow up 87 points and the Nasdaq up 25 points. The bond market is currently down 17/32, which will likely push this morning’s mortgage pricing higher by approximately .250 of a discount point.

The revised reading to the 3rd Quarter Productivity report was posted this morning, showing an upward revision in productivity. What was previously estimated as a 1.1% rate was expected to be lowered to 0.9%. However, today’s release revealed a 1.3% annual rate, which means that workers were more productive than previously thought. That is considered good news for bonds and mortgage rates.

The Fed Beige Book will be released at 2:00 PM ET this afternoon. This report, which is named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so it results can influence bond trading and mortgage rates if it shows any significant surprises. I am expecting it to show significant signs of economic weakness and easing inflationary pressures. But, I believe the market has this news already built into it so the news may not lead to improvements in rates this afternoon.

Tomorrow’s only monthly report is October’s Factory Orders. This report is similar to last week’s Durable Goods Orders release except that this one includes orders for both durable and non-durable goods. This data usually isn’t a major influence on bond trading, but we may see it cause some movement in mortgage rates if it varies greatly from forecasts. Analysts are expecting to see a drop in orders of approximately 4.5%.

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… Lock 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 Dec. 2nd

Tuesday’s bond market has opened in negative territory following a rebound in stock prices. The stock markets are bouncing off yesterday’s beating with the Dow up 250 points and the Nasdaq up 47 points. The bond market is currently down 8/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

There is no relevant economic news scheduled for release today. It is the only day of the week that we will not get some type of relevant data. The next report that we need to be concerned with comes tomorrow morning with the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It is the cond itions around economic growth, such as inflation that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 0.9%, down from the previous estimate of 1.1%.

The Fed Beige Book will be posted tomorrow afternoon. This report, which is named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so it results can influence bond trading and mortgage rates if it shows any significant surprises.

The recent bond rally has driven bond prices higher and mortgage rates lower, however, I am concerned that we may see an increase in rates before they fall much further. The rally creates a situation where bond traders may sell holdings to capture profits from it. If there is a concern in the market whether bonds can improve much more, that move may happen sooner than later and can lead to a spike in mortgage rates. Therefore, I strong ly recommend that you maintain contact with your mortgage professional if still floating an interest rate because rate usually move higher much quicker than they improve.

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 – Sunday Nov. 30th

There are five pieces of economic news that may affect mortgage rates this week. There are relevant reports scheduled for release every day except for Tuesday, meaning it likely will be a fairly active week for mortgage rates.

November’s manufacturing index from the Institute for Supply Management (ISM) will kick off the week’s data at 10:00 AM ET tomorrow. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a decline in sentiment from October to November. October’s reading was previously announced as 38.9. A weaker reading than the expected 38.0 would be good news for the bond market and mortgage rates. A reading below 50 means that more surveyed trade executives felt business worsened during the month than those who felt it had improved. That is a recessionary sign and could help keep mortgage rates low.

The next piece of data that we need to be conce rned with comes Wednesday morning with the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It is the conditions around economic growth, such as inflation that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 0.9%, down from the previous estimate of 1.1%.

The Fed Beige Book will be posted Wednesday afternoon. This report, which is named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so it results can influence bond trading and mortgage rates if it shows any significant surprises.

Thursday’s only report of the day is October’s Factory Orders. This report is similar to last week’s Durable Goods Orders release except that this one includes orders for both durable and non-durable goods. This data usually isn’t a major influence on bond trading, but we may see it cause some movement in mortgage rates if it varies greatly from forecasts. Analysts are expecting to see a drop in orders of approximately 2.5%.
The Labor Department will post November’s Employment report early Friday morning. This is arguably the most important monthly report we see. It is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for another upward change in the unemployment rate to 6.8%, payrolls down approximately 300,000 and an increase of 0.2% in average earnings. An ideal scenario for mortgage sho ppers would be a higher unemployment rate than 6.8%, a larger decline in jobs and no change in the earnings portion.

Overall, the most important day of the week is Friday with the employment figures being released, but we may also see movement in rates Monday and Wednesday. The remaining days could be fairly quiet, depending on stock market gains or losses. Friday’s data could cause a significant change in rates, but if it reveals stronger than expected results we may see rates spike higher Friday morning. Ahead of the report, we may see pressure in bonds as investors prepare for its release. Accordingly, I am holding the lock recommendations for short and intermediate-term periods.

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 pla ce 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. 15th

Wednesday’s bond market opened well in positive territory but has since given back those gains. The stock markets are showing more losses with the Dow down 328 points and the Nasdaq down 55 points. The bond market is currently nearly unchanged from yesterday’s close, but we will still see an increase of approximately .375 of a discount point in this morning’s mortgage rates due to significant selling in bonds late yesterday.

September’s Retail Sales report was released early this morning. It showed a drop 1.2% drop in sales that was much weaker than expected. Analysts had called for a 0.7% decline, meaning that consumers were spending much less than many had thought. This is good news because consumer spending makes up two thirds of the U.S. economy, which translates into weaker economic activity and lower inflationary pressures. Those two factors make long-term securities such as mortgage related bonds more attractive to investors.

Today’s second report was September’s Producer Price Index (PPI). It gave us mixed results with an over reading of down 0.4% that matched forecasts, but a higher than expected core data reading of 0.4%. This means that prices at the producer level of the economy rose more than was expected if food and energy prices are excluded from the equation. This is bad news for bonds because rising prices means inflation is still a threat to the economy.

Also scheduled for release today is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.

Tomorrow morning also brings us two economic releases. The first is September’s Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading could raise inflation concerns in the bond market and push mortgage rates higher tomorrow. However, a smaller than expected reading should ease inflation concerns and could lead to lower mortgage rates.

September’s Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August’s level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.

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.

Friday’s bond market has opened well in negative territory as investors continue to shy away from inflation-threatened securities. The stock markets are mixed during morning trading with the Dow up 38 points and the Nasdaq down 23 points. The bond market is currently down 21/32, which will likely push this morning’s mortgage rates higher by another .375 of a discount point.

There is no relevant economic data scheduled for release today, but this morning’s bond losses don’t come as a surprise. It appears that the sentiment in the bond market has turned more pessimistic than optimistic, partly due to inflation concerns. That has led to bonds and long-term securities becoming of less interest to investors. The result is bond prices falling as they are sold and mortgage rates rising. Unfortunately, I am not so sure that this is the end of the selling, so please be careful if still floating an interest rate.

There are a couple of reports scheduled for release next week that are relevant to mortgage related bonds and rates. However, none are considered to be of extremely high importance to the markets. The first comes Monday morning with the release of June’s Leading Economic Indicators (LEI). This report is considered to be moderately important to the markets.

The rest of the week brings is insight to housing sales, manufacturing activity for big-ticket items and the Fed Beige Book that breaks down economic activity in the U.S. by region. Look for more details on these and the rest of the upcoming 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 fin ancing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.