Daily Mortgage Rate Lock Advisory

This week will likely prove to be very active in terms of mortgage rate movement due to the economic data and other events that are scheduled. There are six economic reports scheduled for release, but in addition to the data another Federal Open Market Committee (FOMC) meeting will be held and another round of Treasury sales are on the calendar. Together, we have the makings of a potentially volatile week in the financial and mortgage markets.
There is no relevant economic news scheduled for release tomorrow. Tuesday brings us the first data with the release of May’s Existing Home Sales report. The National Association of Realtors will give us figures on home resales. This data helps us measure housing sector strength and mortgage credit demand, but it is one of the week’s less important reports. It is expected to show an increase in sales from April to May.

The only important release scheduled for Wednesday is May’s Durable Goods Orders, which gives us an indication of manufacturing sector strength. It is known to be quite volatile from month to month and is expected to show a decline of 0.5% in new orders from April to May. A larger decline would be the ideal scenario for the bond market and could lead to a decline in mortgage pricing Wednesday.
Also Wednesday is the release of May’s New Home Sales that is similar to Tuesday’s Existing Home Sales report. This report tells us how well sales of newly constructed homes were last month. It is also expected to show a rise in sales, but will likely not have much of an impact on mortgage rates because this data is considered to be of low importance to the markets.

The FOMC meeting that begins Tuesday afternoon will adjourn Wednesday afternoon. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting. But, as we
have seen so many times in the past, it is the post meeting statement that often creates the most volatility in the markets. They could give an opinion of the overall economy or inflation, hinting at a possible future
move or lack of one. Statements like these could cause a knee-jerk reaction in the markets and possibly mortgage pricing Wednesday afternoon.
The only relevant economic data scheduled for release Thursday is the final reading to the1st Quarter GDP and weekly unemployment claims. The GDP data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Last month’s first revision showed a 5.7% decline in the GDP. This month’s second and final revision is expected to the same decline.

May’s Personal Income and Outlays data will be posted Friday morning. This report gives us an indication of consumer ability to spend and current spending activity. Analysts are expecting to see an increase of 0.2% in income and a 0.4% rise in the spending portion of the report. Smaller than expected increases should be good news for the bond market and mortgage rates.
The second report of the day and the last important data of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. An upward revision would be considered a negative for bonds.

Also worth noting is the fact that the Fed will be selling $104 billion in new debt this week. These
sales may influence trading enough to affect mortgage rates. There are sales every day except Friday but the two most likely to affect rates are Wednesday and Thursday’s sales. If they are met with a strong demand, we could see bond prices rise some during afternoon trading. This could lead to afternoon improvements to mortgage rates. But, the sales draw a lackluster interest from investors, mortgage rates may move higher during afternoon trading.
Overall, tomorrow will likely be the quietest day of the week. The most active should be Wednesday due to the importance of the data and FOMC meeting. Friday’s news may also affect mortgage rates, but likely not as much as earlier days. This would definitely be a good week to maintain constant contact with your mortgage professional.
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 – Sunday Jan. 25th

This week is extremely busy in terms of economic data scheduled for release and will likely be another active week for mortgage rates. The number of releases is actually irrelevant due to the importance of the some of the reports. There are eight economic releases scheduled for the week in addition to the first Federal Open Market Committee (FOMC) meeting of the year. All but two of the releases scheduled are considered to be of moderate or high importance, meaning we should see quite a bit of movement in mortgage rates again this week.

The first report of the week is tomorrow’s release of December’s Existing Home Sales. It gives us a measurement of housing sector strength by tracking sales of newly constructed homes. It is one of the week’s least important reports, therefore, it will likely not have a significant impact on bond trading or mortgage rates. Current forecasts are calling for a small decline in sales.

December’s Leading Economic Indicators (LEI) will also be posted late tomorrow morning. This index attempts to measure economic activity over the next three to six months. It is considered to be of moderate importance to the bond and mortgage markets. Analysts are currently expecting to see a 0.3% decline, meaning that economic growth over the next few months will likely slow. A larger than expected drop would be good news for the bond market and mortgage rates, but an unexpected rise could lead to bond selling and an increase to mortgage rates tomorrow morning.

January’s Consumer Confidence Index (CCI) will be released Tuesday morning. This report is considered to be of high-importance to the bond market and therefore can move mortgage rates. It is an indicator of consumer sentiment, which is important because a decline would be construed as a sign that consumers may be less willing to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, market participants are very attentive to related data. A reading smaller than the expected 38.0 would be ideal for the bond market and mortgage rates.

There is no factual economic data scheduled for release Wednesday, but we will get the results of this year’s first FOMC meeting. It will begin Tuesday and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to short-term interest rate, but as is often the case, traders will be looking for any indication of the Fed’s next move. However, I am not expecting this meeting to have a major impact on the markets or mortgage rates because the Fed can’t lower key rates much more. There is little chance of indicating a possible rate hike in the near future, so I don’t believe that this meeting will have the influence they usually do.

Thursday morning brings us the release of December’s Durable Goods Orders. This data helps us measure manufactu ring strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show a decline in orders of 1.8%. A larger than expected drop would be good news for bonds and mortgage rates.

December’s New Home Sales report, the sister release to Monday’s Existing Home Sales, will be posted late Thursday morning. It is expected to show another decline in sales of new homes, but is not important enough to heavily influence mortgage pricing.

Next up is Friday, which has three reports scheduled for release. The first of them 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 Friday 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 5.2%. A weaker reading would be great news for the bond market, but the 5.2% decline would be the biggest quarterly drop in 26 years.

The 4th Quarter Employment Cost Index (ECI) is also scheduled for release early Friday 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 F riday 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 confidence, 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.

Overall, look for Tuesday or Friday to be the biggest days for mortgage rates. Friday’s GDP is the single most important piece of data this week, but we may see quite a bit of movement in rates Tuesday also. If we see weaker than expected results from the most important reports, we should see rates close the week much lower than last Friday’s closing levels. If the data shows stronger than expected results, we may see mortgage rates move higher again this week. This is of course, assuming that the Fed meeting doesn’t reveal any surprises. I strongly recommend that fai rly constant contact is maintained with your mortgage professional this week if still floating an interest rate.

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 – Wednesday Jan. 14th

Wednesday’s bond market has opened strong following the release of weaker than expected economic news. The stock markets have reacted negatively to the news with the Dow down 266 points and the Nasdaq down 52 points. The bond market is currently up 21/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

December’s Retail Sales results were the big news of the day. The Commerce Department reported that sales at retail level establishments fell 2.7% last month. This was more than twice the drop of 1.2% that was expected and the sixth consecutive monthly decline. This is the first time we have seen that long of a slump in approximately 40 years.

The release also revised November’s sales lower than previously thought and gave us much weaker than expected results with volatile auto sales excluded. This indicates that consumer spending is weaker than many had assumed, which is good news for bonds and mor tgage rates because consumer spending makes up two-thirds of the U.S. economy. When consumer spending is soft and the overall economy is weakening, bonds become more attractive to investors. This usually leads to higher bond prices and lower mortgage rates.

Later today the Fed will release its Beige Book, detailing economic activity regionally throughout the U.S. The Fed uses this data during their Federal Open Market Committee (FOMC) meetings when deciding whether or not to change key short-term interest rates. Accordingly, its results can cause a fair amount of movement in the bond market and mortgage rates if it reveals any surprises. I am not expecting to see any surprises and no reaction in the markets from its contents.

The Labor Department will post the Producer Price Index (PPI) for December early tomorrow morning. This report is an important measure of inflation at the producer level of the economy. Rapidly rising prices raises inflation con cerns 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.

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 – Monday Dec. 15th

Monday’s bond market has opened in positive territory following early stock losses and slightly weaker than expected economic data. The Dow and Nasdaq are kicking the week off in negative ground with losses of 70 points and 30 points respectively. The bond market is currently up 8/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

This week is moderately busy in terms of the number of economic releases scheduled for release with four on the agenda, but the biggest news will likely be the last Federal Open Market Committee (FOMC) meeting of the year tomorrow. Only one of the four economic reports is considered to be of high importance, so the data may not be the biggest influence eon the markets and mortgage rates this week.

November’s Industrial Production data was posted mid-morning today, revealing a 0.6% decline in output at U.S. factories, mines and utilities. This was a slightly larger decline than the 0.5% that was expected, indicating that manufacturing activity was a little softer than thought. That is good news for bonds and mortgage rates.

Tomorrow morning brings us the release of November’s Consumer Price Index (CPI). It is similar to last week’s Producer Price Index, except it tracks inflationary pressures at the consumer level of the economy. It is also one of the most important monthly reports we see. Current forecasts call for a decline of 1.3% in the overall index and a 0.1% rise in the core data reading. The core data is watched more closely because it excludes more volatile food and energy prices, giving a more stabile reading for analysts to consider.

November’s Housing Starts report will also be released tomorrow morning, but I don’t see it causing much movement in mortgage rates. This report, which is expected to show a decline in starts of new homes, gives us an indication of housing sector strength and future mortgage cred it demand. But, it can be considered the least important of this week’s news.

The last FOMC meeting of the year is tomorrow and will adjourn at 2:15 PM ET. There is much debate about what the Fed will do at this meeting, but the general consensus is that another rate cut is coming. Some think that the Fed will reduce key short-term interest rates by another .750 of a discount point, but most think the Fed will make a half-point move and wait until early next year before making another change. The post meeting statement also may a significant influence on the markets and mortgage rates as investors look for any indication of what and when the Fed may do next.

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.

Rate Lock Advisory – Sunday Dec. 14th

This week is moderately busy in terms of the number of economic releases scheduled for release with four on the agenda, but the biggest news will likely be the last Federal Open Market Committee (FOMC) meeting of the year Tuesday. Only one of the four economic reports is considered to be of high importance, so the data may not be the biggest influence eon the markets and mortgage rates this week.

November’s Industrial Production data is scheduled to be posted mid-morning tomorrow. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Analysts are expecting this report to show a 0.5% decline in output. A larger than expected drop would be good news for bonds, while a stronger than expected reading may result in slightly higher mortgage pricing.

The week’s most important economic data comes Tuesday morning when November’s Consumer Price Index (CPI) is posted. It is similar to last week’ s Producer Price Index, except it tracks inflationary pressures at the consumer level of the economy. Current forecasts call for an decline of 1.3% in the overall index and a 0.1% rise in the core data reading. The core data is watched more closely because it excludes more volatile food and energy prices, giving a more stabile reading for analysts to consider.

November’s Housing Starts report will also be released Tuesday morning, but I don’t see it causing much movement in mortgage rates. This report, which is expected to show a decline in starts of new homes, gives us an indication of housing sector strength and future mortgage credit demand. But, it can be considered the least important of this week’s news.

The last FOMC meeting of the year is Tuesday and will adjourn at 2:15 PM ET. There is much debate about what the Fed will do at this meeting, but the general consensus is that another rate cut is coming. Some think that the Fed will r educe key short-term interest rates by another .750 of a discount point, but most think the Fed will make a half-point move and wait until early next year before making another change. The post meeting statement also may a significant influence on the markets and mortgage rates as investors look for any indication of what and when the Fed may do next.

The last piece of economic news will be posted Thursday morning with the release of the Conference Board’s Leading Economic Indicators (LEI) for the month of November. This 10:00 AM release attempts to measure economic activity over the next three to six months. It is expected to show a sizable decline in activity, meaning that it predicts slower economic activity over the next several months. This probably will not have much of an impact on bond prices or affect mortgage rates unless it exceeds current forecasts of a 0.5% decline from October’s reading. If it shows a larger decline, the bond market may move slightl y higher, improving mortgage rates slightly.

Overall, expect to see a pretty volatile week in the financial markets and mortgage pricing. The most important day of the week is certainly Tuesday with the CPI and the FOMC meeting both scheduled. However, we may see noticeable movement in rates more than one day this week, so, please maintain contact with your mortgage professional if you have not locked an interest rate yet.

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.

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.