Float
Daily Mortgage Rate Lock Advisory – Friday Mar. 6th
Rate Lock Advisory – Friday Mar. 6th
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Friday’s bond market has opened in positive territory after this morning’s major economic news failed to hurt the recent enthusiasm in bonds. The stock markets are in negative ground, but were showing strong gains during early trading. The Dow is currently down 19 points while the Nasdaq has lost 12 points as the opening rally has fizzled. The bond market is currently up 5/32, which with yesterday’s gains should improve this morning’s mortgage rates by approximately .375 of a discount point.
The Labor Department reported this morning that the unemployment rate spiked to a 25-year high of 8.1% last month. This was higher than the 7.9% rate that was expected, which can be considered good news for bonds. The reports also revealed that 651,000 jobs were lost during the month, but that was very close to forecasts. It also revised February’s job loss higher by 57,000 jobs. The hourly earnings reading matched forecasts of a 0.2% increase.
Overall, t he unemployment rate was an attention magnet, but the other portions of the report are a non-factor in this morning’s trading and mortgage rates. The early rise then fall in stocks indicates that further weakness in them could be likely. That may benefit bonds as investors seek shelter from the volatility. However, if stocks can hold any type of a rally, the bond market could see considerable weakness, likely driving mortgage rates higher.
Next week is pretty light in terms of economic releases. There are only a couple of relevant reports scheduled to be posted, but one of them is highly important. None of the relevant news will be posted until mid-week, so look for a relative calm day for mortgage rates Monday unless the stock markets rally or sell-off again. Sunday’s weekly preview will have more details on next week’s events.
If I were considering financing/refinancing a home, I would…. Float if my closing was taking place within 7 days… Fl oat 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.
Daily Mortgage Rate Lock Advisory – Wednesday Mar. 4th
Rate Lock Advisory – Wednesday Mar. 4th
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Wednesday’s bond market has opened well into negative territory following a strong opening in stocks. The stock markets are rallying with the Dow up 150 points and the Nasdaq up 32 points. The bond market is currently down 28/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.
There were no important economic reports scheduled for release this morning. The Fed will release its Beige Book at 2:00 PM ET today. 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.
There are two important reports scheduled for release tomorrow m orning. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed a 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. The Unit Labor Costs reading is expected to be revised higher to 3.4%. Employee productivity and costs are watched fairy closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns, while increases in employee costs do raise inflation fears.
January’s Factory Orders will be posted late tomorrow 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.
We also will get weekly unemployment numbers from the Labor Department, but I am not expecting them to heavily influence bond trading or mortgage rates.
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.
Daily Mortgage Rate Lock Advisory – Tuesday Mar. 3rd
Rate Lock Advisory – Tuesday Mar. 3rd
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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.
Daily Mortgage Rate Lock Advisory – Monday Mar. 2nd
Rate Lock Advisory – Monday Mar. 2nd
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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.
Daily Mortgage Rate Lock Advisory – Wednesday Feb. 25th
Rate Lock Advisory – Wednesday Feb. 25th
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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.
Daily Mortgage Rate Lock Advisory – Tuesday Feb. 24th
Rate Lock Advisory – Tuesday Feb. 24th
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Tuesday’s bond market has opened in positive territory following news of a plummet in consumer confidence last month and word that the Fed expects it to take a couple of years for the economy to fully recover from the recession. The stock markets are showing gains with the Dow currently up 48 points while the Nasdaq up 16 points. The bond market is currently up 8/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.
The Conference Board gave us February’s Consumer Confidence Index (CCI) late this morning, showing a reading of 25.0. This was an all-time low and indicates that consumers are still concerned about their jobs and own financial situations. That is expected to mean that they are less likely to make large purchases in the near future, which will limit economic growth. This is good news for bonds and mortgage rates.
Also this morning was Mr. Bernanke’s semi-annual testimony on the status of the economy to the Senate Banking Committee. During his testimony he stated that he was optimistic that the recession would end later this year, but that it would take two to three years for the economy to fully recover from it. He also said that restoring financial stability is needed for the economy to recover. None of this is a major surprise but making it official word from Chairman Bernanke gives the markets benchmarks to follow.
January’s Existing Home Sales report will be posted late tomorrow morning. This is one of the least important reports of the week, along with Thursday’s New Home Sales report. They measure housing sector strength and mortgage credit demand, but usually do not have a significant impact on bond trading or mortgage rates. The Existing Home Sales report is expected to show an increase in sales but new home sales are expected to fall slightly.
If I were considering financing/refinancing a home, I would…. Float if my clo sing 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.
Daily Mortgage Rate Lock Advisory – Monday Feb. 23rd
Rate Lock Advisory – Monday Feb. 23rd
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Monday’s bond market is currently down slightly despite stock losses. The Dow is currently down 53 points while the Nasdaq has lost 20 points. The bond market is currently down 4/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.
The bond market and stock indexes are well off earlier levels. The stock markets opened in positive territory with the Dow up nearly 75 points earlier and the Nasdaq up 11 points. The bond market was down 12/32 during early trading, but as the stock markets have given back early gains and slid into negative ground, bonds are rising. This is likely as a result of investors shifting funds into bonds to escape the expected volatility in stocks. Some analysts are predicting stocks to fall further in the near future and bonds are benefiting.
This week brings us the release of six pieces of economic data for the bond market to digest along with some very important tes timony from Fed Chairman Bernanke. Two of the reports are considered to be of low importance, but a couple of them are considered to be of fairly high importance. None of this week’s relevant data is being released today.
Tomorrow morning brings us the first of this week’s data with the release of February’s Consumer Confidence Index (CCI) during late morning trading. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. Since consumer spending makes up two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from 37.7 in January to 36.0 this month. A lower reading would be considered good news for bonds and mortgage rates.
Mr. Bernanke will deliver the Fed’s semi-annual testimony on the status of the economy late tomorrow morning. He will be speaking to the Se nate Banking Committee and market participants will watch his words very closely. The Fed Chairman is required to deliver this testimony twice a year, which is considered to be of extreme importance to the financial markets. We almost always see the markets move as a result of what he says during this testimony. Look for him to address the banking and housing crises specifically and their impact on the overall economy. His testimony begins at 10:00 AM ET with a prepared statement then is followed by Q & A with committee members. I am expecting to see the markets fluctuate during this session, possibly affecting mortgage rates also.
Overall, look for plenty of movement in bond prices and mortgage rates this week. I think we will see the most movement either tomorrow or Thursday, but Friday may be fairly active also. This would be a good week to maintain contact with your mortgage professional.
If I were considering financing/refinancing a home, I wou ld…. 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.
Daily Mortgage Rate Lock Advisory – Friday Feb. 20th
Rate Lock Advisory – Friday Feb. 20th
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Friday’s bond market has opened up sharply following early stock losses and renewed fears about the economy. The stock markets are showing early sizable losses after international markets posted large declines during overnight trading. The Dow is currently down 120 points while the Nasdaq has lost 13 points. The bond market is currently up 31/32, which will likely improve this morning’s mortgage rates by approximately .375 of a discount point.
The Labor Department gave us January’s Consumer Price Index (CPI) this morning, saying that the overall index rose 0.3% as expected. The core data rose 0.2%, exceeding analysts’ forecasts of a 0.1% increase. This means that consumer prices rose more than expected if excluding volatile food and energy prices. That is considered bad news for bonds, but the stock and economic concerns has prevented a negative reaction to this morning’s news.
The concerns, both here and overseas, about the global economy are contributing greatly to this morning’s bond gains. We are seeing a shift to safety as investors sell stocks and move funds into bonds. While this is good news for the bond market and mortgage rates, this is sometimes only a temporary move and could lead to further volatility in trading in the coming days and weeks. If investors become more comfortable with stocks, we could see those same funds move from bonds back into stocks, driving bonds prices lower and mortgage rates higher. Still, no reason to panic. This just means we need to watch the markets closely.
Next week is fairly active in terms of economic releases and relevant events. There is no important news scheduled for release Monday, but we do get important data and the semi-annual monetary policy testimony from the Fed Chairman to Congress on Tuesday. The rest of the week is scattered with relevant data releases, so look to Sunday’s weekly preview for details.
If I were considering finan cing/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.
Daily Mortgage Rate Lock Advisory – Tuesday Feb. 17th
Rate Lock Advisory – Tuesday Feb. 17th
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Tuesday’s bond market has opened up sharply as economic concerns and strong stock weakness has brought bonds into favor this morning. The Dow is currently down 243 points while the Nasdaq has lost 43 points. The bond market is currently up 58/32, but we will likely see an improvement of .250 – .375 in this morning’s mortgage rates.
There are no relevant economic reports scheduled for release today. There are five economic reports worth watching this week that are likely to affect mortgage rates in addition to the minutes from the last FOMC meeting. Tomorrow brings us three of those releases, including the week’s least important. January’s Housing Starts will be posted early tomorrow morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless it varies greatly from forecasts. Current forecasts are calling for a decline in starts of new housing.
January’s Industrial Production da ta will be released mid-morning tomorrow. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories. Mines and utilities and can have a moderate impact on the financial markets. Analysts are expecting to see 1.4% decline in production from December to January. A larger than expected decline in output would be good news and should push bond prices higher, lowering mortgage rates tomorrow.
The minutes from last FOMC meeting will be released tomorrow afternoon. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. However, with little likelihood of the Fed making a change to key short-term rates anytime soon, these minutes will likely not heavily influence trading or lead to a change in mortgage rates during afternoon trading.
Overall, the most important day of the week will likely be Friday with the CPI being released, but tomorrow and Thursday may also be active days for mortgage rates. There is a strong likelihood of seeing an active week for mortgage rates.
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.
Daily Mortgage Rate Lock Advisory – Wednesday Feb. 11th
Rate Lock Advisory – Wednesday Feb. 11th
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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.
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