There is nothing of importance this morning, making it highly likely that we will crawl into the end of the year. As expected, trading is extremely light this morning and there is no reason to think that will change before today’s 2:00 PM ET close. The stock markets are technically open all day, but it doesn’t look many traders went to work. We will probably see a little fluctuation in the major indexes and bond prices, but I would be highly surprised if we saw significant movement or an intra-day change to mortgage interest rates.

Next week brings us the release of several relevant financial reports. The week opens and closes with important reports, giving us a good look at current financial conditions. Monday has December’s Institute for Supply Management’s manufacturing index. This is usually the first most current report we see month. It is posted the first business day of the month and covers the preceding month. The data tracks manufacturer sentiment, giving us an indication of manufacturing sector strength. It is considered to be one of the more important reports we see each month.

The week closes next Friday with the almighty monthly Employment report. In between the Institute for Supply Management index and Employment numbers there are a couple more events scheduled, including the minutes from the past FOMC meeting and a couple of less important trade and industry reports. Late in the week, Fed Chairman Bernanke will speak, drawing the close attention of the markets also. I am actually looking forward to some of this key data as I still believe December’s spike in interest rates was an overreaction. I suspect we will still results that remind us we still have significant hurdles facing the economy and this month’s optimism was premature. If this is the case, we should see mortgage interest rates move lower next week.

Look for more details on next week’s events in Sunday’s weekly preview. I would like to take this opportunity to wish everyone and theirs a wonderful and safe holiday weekend and a prosperous new year!

If you are considering financing/refinancing a home, I would…. Lock if your closing takes place within 7 days… Float if your closing takes place between 8 and 20 days… Float if your closing takes place between 21 and 60 days… if your closing takes place over 60 days from now…

The Commerce Department announced this morning that retail level sales fell 0.1% last month. This was well off forecasts of a 0.7% increase, meaning that consumers were spending much less than expected. Even if volatile auto-related sales are excluded, sales fell much more than expected. This is very good news for the bond market and mortgage rates because consumer spending makes up two-thirds of the U.S. economy. If consumer spending is still falling, the broader economic recovery cannot be close. Generally speaking, a weak economy is a better environment for bonds and makes mortgage-related bonds more attractive to investors.

Also posted this morning were weekly unemployment figures from the Labor Department. They reported that 558,000 new claims for benefits were filed last week. This was an increase from the previous week, but more importantly, analysts were expecting to see a decline in new claims. However, since this data basically tracks only a week’s worth of claims, it usually has little impact on mortgage rates and has not influenced trading this morning.

Early this afternoon we will get the results of today’s 30-year Bond auction. This sale is not as important to mortgage rates as yesterday’s 10-year sale was. But if the auction is met with an overly strong demand from investors or a particularly weak interest, we may see bond prices move enough during afternoon trading to cause revisions to mortgage rates. The results will be posted at 1:00 PM ET.

Tomorrow morning brings us the release of three reports. The first is July’s Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and energy prices. Current forecasts call for no change in the overall index and a 0.1% increase in the core data reading. Declines in the readings, especially in the core data, should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing tomorrow.

The remaining two pieces of data are relevant to mortgage rates but not nearly important as the CPI is. The second report of the day is Industrial Production data for July. 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 of moderately high importance and may cause movement in mortgage rates. Analysts are currently expecting to see a 0.4% increase in production between June and July. A larger increase in output could lead to higher mortgage rates tomorrow, but only if the CPI’s results are a non-factor in rates.

The last report of the day will come from the University of Michigan who will release its Index of Consumer Sentiment for August at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably help boost bond prices. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher Friday morning. However, this is the least important of the day’s three reports and will probably have the least impact on 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…
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.

This week’s FOMC meeting has adjourned with no change to key short-term interest rates. This was widely expected by market participants. The post-meeting statement really didn’t give us any new insight to the Fed’s next move. It did renew the same thoughts previously mentioned- that the economy is leveling off but to expect weak economic conditions for the immediate future. They also indicated that inflation is not an immediate concern to the economy.

The lack of a change to rates had no impact on trading as it was expected. The portion of the statement that indicated the spiraling economy is stabilizing can be considered somewhat negative for the bond market. However, the lack of concern about inflationary pressures offset any concerns that may have arisen from the reminder than the economic downturn is slowing.

Today’s 10-year Treasury Note auction has caused some stress in bonds during afternoon trading though. The sale was met with an average demand at best. The results were far from the worst we have seen but also nowhere near the recent levels of interest. This led to bond prices falling immediately after the 1:00 PM ET announcement and the FOMC meeting has done nothing to push them higher. Overall, I am expecting to see a small upward revision to mortgage rates this afternoon. If your lender does not revise higher today, it will be built into tomorrow’s pricing. Some lenders may opt to wait for tomorrow morning’s key economic data to be posted before reflecting this change. If that is the case, keep in mind you already have a slight increase waiting from this afternoon’s events.

This morning’s only relevant economic data was June’s Trade Balance report that revealed a $27.0 billion deficit. This was smaller than expected, but this data is not considered to be highly important to the markets so its impact on this morning’s trading and mortgage rates was minimal.

Tomorrow morning’s sole monthly report is July’s Retail Sales data. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, potentially slowing the economic recovery. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.7%.

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.

This morning’s only relevant economic data was June’s Trade Balance report that revealed a $27.0 billion deficit. This was smaller than expected, but this data is not considered to be highly important to the markets so its impact on this morning’s trading and mortgage rates has been minimal.

It will likely be an active afternoon for the markets and mortgage rates. The results of today’s 10-year Treasury Note auction will be posted at 1:00 PM ET and this week’s
FOMC meeting will adjourn at 2:15 PM ET. Either of these events can lead to afternoon swings in the financial markets and mortgage rates, so expect to see some afternoon revisions today.

This report will be updated shortly after the markets have an opportunity to react to the FOMC statement, but I am holding my cautious approach towards rates into this afternoon’s events. I would not be surprised to see upward revisions to rates later today.

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.

Today’s relevant economic data was Employee Productivity and Costs data for the second quarter. It showed a sharp increase in productivity compared to the 1st quarter’s final reading. The 6.4% jump was higher than analysts had expected and is considered good news for bonds and mortgage rates. This data didn’t push stocks lower, but the drop in stocks has also helped boost bond prices this morning.

June’s Trade Balance report will be released early tomorrow morning. It gives us the size of the U.S. trade deficit but is the week’s least important report and likely will have little impact on the bond market and mortgage rates. Analysts are expecting to see a $28.6 billion deficit, but it will take a wide variance to directly influence mortgage pricing.

The FOMC meeting that began today will adjourn at 2:15 PM ET tomorrow. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Look for the statement to lead to volatility during afternoon trading if it hints at what the Fed’ s next move may be and when it will come. If the statement does not give us new information, mortgage rates will probably move little after its release.

The most important data of the week comes Thursday and Friday when we will get measurements of consumer spending, inflation at the consumer level of the economy, industrial production and consumer sentiment. This is where we will probably see the most movement in rates and I will remain very cautious towards rates until we get past the FOMC statement and those economic reports. I suspect that we may see bond prices react negatively to some of the upcoming events that will lead to another increase in mortgage rates.

Also worth noting are two important Treasury auctions this week. The sale of 10-year Notes will be held tomrorow while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as they are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Those results will be announced at 1:00 PM each sale day.

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.

There is no relevant economic data scheduled for release today. The rest of the week brings us the release of six relevant economic reports in addition to another FOMC meeting. The first is Employee Productivity and Costs data for the second quarter that will be released tomorrow morning. It will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don’t see this being a big mover of mortgage pricing, but since it is the only data of the day it may influence rates slightly. Analysts are currently expecting to see an increase in productivity of 5.4%. A higher than expected reading could help improve bonds, leading to lower mortgage rates tomorrow.

The FOMC meeting will begin tomorrow morning and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Look for the statement to lead to volatility during afternoon trading if it hints at what the Fed’s next move may be and when it will come. If the statement does not give us new information, mortgage rates will probably move little after its release.

The most important data of the week comes Thursday and Friday when we will get measurements of consumer spending, inflation at the consumer level of the economy, industrial production and consumer sentiment. This is where we will probably see the most movement in rates.

Also worth noting are two important Treasury auctions this week. The sale of 10-year Notes will be held Wednesday while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as they are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors, particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Those results will be announced at 1:00 PM each sale day.

Overall, look for the most movement in bond prices and mortgage rates the second half of the week. Thursday or Friday will likely turn out to be the most important day. If we get stronger than expected results in the Retail Sales report and Consumer Price Index, I fear that we may see mortgage rates spike higher fairly quickly. I suspect the FOMC meeting will not have as much of an influence on mortgage rates as recent meetings have, but the markets can react wildly to a single word or omission of a word in the statement, so we need to be cautious. This is certainly another week that continuous contact with your mortgage professional is highly recommended if you are 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…
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.

June’s Trade Balance report will be released Wednesday morning. It gives us the size of the U.S. trade deficit but is the week’s least important report and likely will have little impact on the bond market and mortgage rates. Analysts are expecting to see a $28.5 billion deficit, but it will take a wide variance to directly influence mortgage pricing.

The FOMC meeting will begin Tuesday morning and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Look for the statement to lead to volatility during afternoon trading if it hints at what the Fed’s next move may be and when it will come. If the statement does not give us new information, mortgage rates will probably move little after its release.

Thursday morning’s sole monthly report is July’s Retail Sales data. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, potentially slowing the economic recovery. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.7%.

Friday brings us the release of three reports. The first is July’s Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and energy prices.  Current forecasts call for no change in the overall index and a 0.1% increase in the core data reading. Declines in the readings, especially in the core data, should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing Friday.

The remaining two pieces of data are relevant to mortgage rates but not nearly important as the CPI is. The second report of the day is Industrial Production data for July. 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 of moderately high importance and may cause movement in mortgage rates. Analysts are currently expecting to see a 0.4% increase in production between June and July. A larger increase in output could lead to higher mortgage rates Friday, but only if the CPI is a non-factor.

The last report of the day will come from the University of Michigan who will release its Index of Consumer Sentiment for August at 9:45 AM. This indexgives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably help boost bond prices. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher Friday morning. However, this is the least important of the day’s three reports and will probably have the least impact on rates.

Also worth noting are two important Treasury auctions this week. The sale of 10-year Notes will be held Wednesday while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as they are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Those results will be announced at 1:00 PM each sale day.

Overall, look for the most movement in bond prices and mortgage rates the second half of the week. Thursday or Friday will likely turn out to be the most important day. If we get stronger than expected results in the Retail Sales and CPI releases, I fear that we may see mortgage rates spike higher fairly quickly. I suspect the FOMC meeting will not have as much of an influence on mortgage rates as recent meetings have, but the markets can react wildly to a single word or omission of a word in the statement, so we need to be cautious. This is certainly another week that continuous contact with your mortgage professional is highly recommended if you are 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…
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.

The Labor Department reported this morning that only 247,000 jobs were lost last month and that the U.S. unemployment rate fell to 9.4%. Both of these readings were stronger than expected. Analysts had forecasted a job loss of 328,000 and an increase on the unemployment rate of 0.1% to bring it to 9.6%. In addition, average hourly earnings also exceeded forecasts with a 0.2% increase.

Today’s news was definitely negative for bonds and mortgage rates. It indicates that the employment sector is not as bad as many had thought. While it was still softening last month, it was at a much slower pace than expected. That helps support the theory that the recession may be nearing an end. In fact, some analysts are already stating they think it has ended. This is bad for bonds because economic growth often creates an environment with inflation concerns that make bonds less attractive to investors. The result usually ends up being higher mortgage rates as investors shift funds into a growing stock market.

Next week is another busy one for the markets and mortgage rates. There are several very important economic releases scheduled to be posted in addition to another FOMC meeting that can heavily influence bond trading and mortgage rates. None of them is due out Monday, but there is relevant data or events scheduled for every other day of the week. Look for more 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…
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.

There is no relevant economic news scheduled for release today. Tomorrow 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 last month’s home resales. This data helps us measure housing sector strength and mortgage credit demand, but it is one of the lesser important reports of the week. It is expected to show an increase in sales from April to May.

The FOMC meeting that begins tomorrow 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.

Overall, there are six reports scheduled for release this week in addition to the FOMC meeting. The most active day 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.

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, if the sales draw a lackluster interest from investors, mortgage rates may move higher 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.

There is no relevant economic data scheduled for release today. This makes it likely that bonds will be influenced mostly by changes in the stock markets today. As long as the major stock indexes remain calm, I would expect bonds and mortgage rates to follow suit. If the stock markets give back this morning’s gains, bonds may react favorably as the day goes on. However, afternoon weakness seems to be routine lately so we should go into the weekend with a cautious approach.

Next week is fairly active in terms of economic releases. There are several scheduled for release
that may influence mortgage pricing, but we also have an FOMC meeting on the calendar next week. In addition to those items, there is another round of Treasury auctions on the agenda that may also affect bond trading and mortgage rates.
None of the economic data or relevant events take place on Monday, so look for it to be a day of preparation for the week’s events. Unless something positive happens or is announced over the
weekend, there is little to lead us to believe Monday will be a strong day for bonds. But look for more details on next week’s data and relevant events in Sunday’s weekly preview.

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.

WEDNESDAY AFTERNOON UPDATE:

This week’s FOMC meeting has adjourned with some extremely favorable news regarding the Fed’s investment in Treasury securities and mortgage-related bonds. As expected, there was no change made to key short-term interest rates but the post-meeting statement did mention that economic conditions were worse now than at the time of their last meeting in January. They again mentioned concerns about deflation, meaning inflation is not a threat in their minds.

The big news was the size of the investment that the Fed is going to be making in mortgage-related bonds and securities. In a direct effort to push different interest rates lower, including corporate lending and residential mortgage rates, the central bank will be buying up to $300 billion in longer-term bonds over the next six months. They also said that they plan to purchase $750 billion in mortgage backed securities so free up more capital for mortgage lending. T his will likely give the housing and mortgage sectors a much needed boost.

The effect this news had on today’s trading was extremely positive for mortgage shoppers. The stock markets have rebounded with the Dow up approximately 50 points and the Nasdaq up 25 points. Both indexes were well in negative territory this morning. The bond market has had an even better reaction to the news. It is currently up a whopping 4 7/32 (135/32) to drive its yield lower by .47%. That is a huge swing and should equate to a very significant improvement to mortgage rates shortly.

Earlier today, the Labor Department gave us the week’s most important economic data with the release of February’s Consumer Price Index (CPI). It showed a 0.4% rise in the overall reading and a 0.2% increase in the core data reading. Both readings were slightly stronger than expected, indicating prices at the consumer level of the economy were higher than thought. While that is bad news fo r bonds and mortgage rates because inflation erodes the value of a bond’s future fixed interest payments, the market downplayed the data in this morning’s trading, looking forward to this afternoon’s FOMC results.

The Conference Board will post its Leading Economic Indicators (LEI) for February late tomorrow morning, but I suspect that today’s rally and news will carry into tomorrow’s morning trading and influence rates more than this report will. The LEI attempts to measure economic activity over the next three to six months. Current forecasts are calling for a 0.6% decline, indicating that economic activity will likely slow in the coming weeks. That would be good news for the bond market and mortgage rates generally speaking, but today’s news will probably dominate trading tomorrow regardless of the results of the LEI.

If I were considering financing/refinancing a home, I would…. Float if my closing was taking place within 7 days… Float if my clos ing 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.
©Mortgage Commentary 2009

Wednesday’s bond market has opened in positive territory following early stock losses and despite stronger than expected inflation news. The stock markets are posting sizable losses with the Dow down 128 points and the Nasdaq down 11 points. The bond market is currently up 16/32, but we will likely see little change in this morning’s mortgage rates as the markets await the Fed’s words later this afternoon.

The Labor Department gave us today’s important data with the release of February’s Consumer Price Index (CPI). It showed a 0.4% rise in the overall reading and a 0.2% increase in the core data reading. Both readings were slightly stronger than expected, indicating prices at the consumer level of the economy were higher than thought. While that is bad news for bonds and mortgage rates because inflation erodes the value of a bond’s future fixed interest payments, the market seems to have downplayed the data in this morning’s trading.

This week’ s FOMC meeting will adjourn at 2:00 PM ET today. There is not likely to be any change in short-term interest rates, but the markets will be looking for any indication if the Fed will be buying bonds as part of its effort to keep the markets liquid. If the Fed does start buying the debt, it should ease investor concerns about the amount of the debt that has been sold to fund the economic recovery and bailout programs. This would also likely prevent China, who made concerning comments last week, from selling some of their massive holdings in U.S. securities. The Fed move would also likely help keep mortgage rates low, possibly even driving them lower than current levels.

If the post-meeting statement indicates that the Fed is ready to start buying bonds, we could see an afternoon rally that may revise mortgage pricing lower this afternoon. However, any hint that the move may be delayed or is not going to happen would likely lead to selling in bonds and higher m ortgage rates later today.

Look for an update to this report shortly after the markets have an opportunity to react to the statement.

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.
©Mortgage Commentary 2009

Friday’s bond market has opened in negative territory following a strong open in stocks and comments made by China that raised concerns of potential selling in bonds. However, stocks have since given back their earlier gains. The Dow is now nearly unchanged while the Nasdaq is now down 7 points. The bond market is currently down 26/32, but strength yesterday will likely keep this morning’s mortgage rates close to yesterday’s levels.

The first of today’s two economic reports was January’s Goods and Services Trade Balance report. It showed that the U.S. trade deficit fell to $36.0 billion in January. This was lower than forecasts of a $38.0 billion deficit, but this data usually does not have a major influence on bonds or mortgage rates.

The second report of the morning was the University of Michigan’s Index of Consumer Sentiment for March. It showed a reading of 56.6 that was a little higher than the 55.0 that was expected and a slight increase f rom February’s final reading. This means that consumer confidence was a little stronger than expected. That can be considered bad news for mortgage rates, but since the variance was minor it has not impacted trading this morning.

The comments made by China has some traders believing that they may begin to sell holdings in the near future. Since they hold approximately $727 billion of U.S. debt, or 6% of the total outstanding debt, a selling campaign would likely drive prices lower. Accordingly, traders are taking a cautious approach this morning.

Next week brings us the release of several important reports, including key inflation readings and another FOMC meeting. There is relevant data scheduled for release Monday when February’s Industrial Production data will be posted. Look for more 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… 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.
©Mortgage Commentary 2009

Wednesday’s bond market has opened in negative territory despite the release of weaker than expected economic data. The stock markets are showing small gains with the Dow up 21 points and the Nasdaq up 9 points. The bond market is currently down 6/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

Both of today’s factual economic reports gave us weaker than expected results. The first was January’s Housing Starts that tracks starts of new home construction. It revealed a decline of almost 17% in starts, bringing the total down to a record low. This gives us another indication that the housing market has not bottomed-out and that we could see further weakness in near future. This is considered good news for bonds because weak housing helps support a theory of a weakening economy.

January’s Industrial Production data was also posted this morning, showing a 1.8% drop in manufacturing output. This was a larger decline than the 1.4% that was expected and along with a downward revision to December’s output, indicates that the manufacturing sector is still slowing. This is another favorable indicator for bonds and mortgage rates.

The minutes from the last FOMC meeting will be released later today. 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.

The Labor Department will post their Producer Price Index (PPI) for January early tomorrow morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overal l reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. It is expected to show an increase of 0.2% in the overall reading and a 0.1% rise in the core data. Good news for bonds would be a decline in both readings, particularly the core data.

Also tomorrow morning will be the release of the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show no change, meaning that economic activity may be flat in the near future. A decline would be good news for the bond market and 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 t aking 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.

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.

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. The financial markets are closed tomorrow in observance of the President’s Day Holiday and will reopen Tuesday morning. You may find some lenders to be open for business tomorrow, but I would not expect to see new rates issued until Tuesday.

Wednesday brings us three releases, including the week’s least important of the five economic reports. January’s Housing Starts will be posted early Wednesday 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 data will be released mid-morning Wednesday. It gives us a measurement of manufacturing sector strength by tracking ou tput 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 Wednesday.

The minutes from last FOMC meeting will be released Wednesday 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 Wednesday afternoon.

The Labor Department will post their Producer Price Index (PPI) for January early Thursday morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. It is expected to show small increases in both readings, indicating that inflation is not a threat. Good news for bonds would be a decline in both readings, particularly the core data.

Also Thursday morning will be the release of the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show no change, meaning that economic activity may be flat in the near future. A decline would be good news for the bond market and mortgage rates.

The Labor Department will release January’s Consumer Price Index (CPI) at 8:30 AM ET Friday, which measures inflationary pressures at the very important consumer le vel of the economy. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially long-term securities such as mortgage-related bonds. It is expected to show a 0.3% increase in the overall index and a 0.1% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall.

Overall, the most important day of the week will likely be Friday with the CPI being released, but Wednesday and Thursday may also be active days for mortgage rates. Tuesday’s opening will also be interesting with it being the first trading day since the approval of the President’s economic stimulus package. In other words, be prepared for an active week in the markets and mortgage rates.

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

WEDNESDAY AFTERNOON UPDATE:

Today’s FOMC meeting adjourned with no change to key short-term interest rates, keeping the benchmark Fed Funds Rate near 0%. The stock markets rallied following the adjournment, pushing the Dow up 200 points and the Nasdaq higher by 53 points on the day. The bond market soured though, driving bond prices lower that pushed yields and mortgage rates higher. Overall, we can expect to see an increase in tomorrow’s mortgage rates of approximately .375 of a discount point unless the morning’s data offsets those losses or pushes them higher.

The post meeting statement did give us some insight into what actions the Fed may take to help boost economic activity since this rate can’t be lowered any further. They indicated that they were ready to buy longer-term government securities such as the 10-year Treasury Note and 30 year Bond if they felt that it would generate lending. This is actually good news as it creates another buyer for all the debt that could some to market to pay for the stimulus package currently being considered. Unfortunately, the statement was not very definitive, more or less saying that it is an option available not a commitment to do so.

The statement also hinted at the Fed’s forecast for the economy, saying that significant risks still remain but that a ?gradual recovery? could begin late this year. In other words they expect the economy to continue to slow for most of the year before slowly rebounding. That is actually fairly favorable news for bonds, but traders apparently were disappointed by the lack of solid details of what the Fed will do, particularly regarding the possibility or likelihood of buying government securities. The result was a weak afternoon for bonds and a likely upward revision to mortgage pricing.

Tomorrow morning brings us the release of December’s Durable Goods Orders. This data helps us measure manufacturing 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 2.0%. 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 tomorrow morning. It is expected to show another decline in sales of new homes, but is not important enough to heavily influence mortgage pricing.

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 guaran teed to be in the best interest of all/any other borrowers.

Wednesday’s bond market has opened in positive territory despite early stock gains. The stock markets are currently showing noticeable gains with the Dow up 118 points and the Nasdaq up 41 points. The bond market is currently up 2/32, which with yesterday’s late gains should improve this morning’s mortgage rates by approximately .250 of a discount point.

There is no relevant economic data being released today. Later this afternoon though we will get the results of the year’s first FOMC meeting. It will adjourn at 2:15 PM ET but it is expected to yield no change to short-term interest rates and probably will not heavily influence trading or mortgage rates. Traders will be looking for any indication of the Fed’s next move in the post meeting statement. However, I am not expecting 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 do n’t believe that this meeting will have the influence they usually do.

Tomorrow morning brings us the release of December’s Durable Goods Orders. This data helps us measure manufacturing 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 2.0%. 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 tomorrow morning. It is expected to show another decline in sales of new homes, but is not important enough to heavily influence mortgage pricing.

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.

Tuesday’s bond market has opened in positive territory after this morning’s economic news failed to give any significant surprises. The stock markets are showing gains during early trading with the Dow up 53 points and the Nasdaq up 15 points. The bond market is currently up 6/32, which will likely keep this morning’s rates near yesterday’s levels.

January’s Consumer Confidence Index (CCI) was posted late this morning, revealing a reading of 37.7. This was a lower than forecasts of a 39.0 reading, but offsetting that favorable news was an upward revision of 0.6% to December’s confidence reading. This means that consumers were more confident in their own financial situations than previously thought in December, but that sentiment has dropped in January. Lower levels of confidence are considered good news for bonds because it usually means consumers are less apt to make large purchases in the immediate future.

There is no factual economic data sc heduled for release tomorrow, but we will get the results of this year’s first FOMC meeting. It will begin tomorrow 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.

The rest of the week is pretty busy with five relevant reports scheduled to be released over Thursday and Friday. There are two on Thursday’s agenda while the most important one comes Friday along with two other moderately important reports. I am expecting to see additional movement in mortgage rates over the next couple of days, so please maintain 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.

Friday’s bond market has opened in negative territory yet again even with the stock markets mixed. The Dow is currently down 109 points while the Nasdaq is currently up 3 points. The bond market is currently down 17/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

There is no relevant economic news scheduled for release today. If the stock markets remain near current levels, we should see bond prices and mortgage rates likely follow suit. However, a rebound in stocks could lead to higher mortgage rates this afternoon.

Next week brings us the release of several relevant reports for the markets to digest. There are two scheduled to be posted Monday, but neither are considered to be highly important. We will get December’s Existing Home Sales and Leading Economic Indicators late Monday morning.

The rest of the week has several important reports scheduled for release in addition t o the first FOMC meeting of the year. I am expecting to see a very active week in the markets and mortgage pricing. Look for more 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… 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.

Wednesday’s bond market has opened up slightly following strength late yesterday and morning losses in stocks today. The Dow and Nasdaq are both showing weakness with losses of 158 points and 35 points respectively. The bond market is currently up 2/32, but due to late gains in bonds yesterday, we should see an improvement in this morning’s mortgage rates of approximately .375 of a discount point.

Helping to boost bond prices late yesterday was the minutes from the last FOMC meeting. They indicated that the Fed feels the economy will continue to weaken with the GDP falling and unemployment rising next year. This eased some concerns in the bond market that the economy may strengthen with another economic stimulus package, making long-term securities such as bonds less attractive to investors.

There is no relevant economic data scheduled for release today and the only slightly relevant news scheduled for release tomorrow are weekly unemployment c laims from the Labor Department. They are expected to show that 550,000 new claims for benefits were filed last week. However, this data is not considered to be of high importance to the markets because it tracks a single week’s worth of new claims.

The final report of the week comes Friday morning when the Labor Department will post December’s employment figures. The Employment report is considered to be one of the most important monthly releases we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a larger than expected drop in new payrolls and a small increase or even a decline in earnings would be good news for the bond market.

Current forecasts call for a 0.3% increase in the unemployment rate, pushing it to 7.0%. Analysts are expecting to see a drop in payrolls in the neighborhood of 475,000 with earnings rising 0.2%. If we see weaker than expected results, mortgage rates should improve Friday. However, stronger than expected readings will likely push mortgage rates 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… 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.

Tuesday’s bond market has opened in negative territory again as long-term securities are falling out of favor with investors. The stock markets are showing gains with the Dow up 46 points and the Nasdaq up 20 points. The bond market is currently down 16/32, which will likely push this morning’s mortgage rates higher by another .375 of a discount point.

The Commerce Department posted November’s Factory Orders data this morning, reporting a drop of 4.6% in new orders. This data gives us a fairly important measurement of manufacturing sector strength and was expected to show a decline in orders of 2.6%. This means that the manufacturing sector was weaker than expected. However, even though this is good news for bonds, other pressures are making the results a non-factor in today’s trading.

The 10-year TIPS Notes (inflation-indexed securities) will be auctioned today with its results being posted at 1:00 PM ET. If investor demand was strong, we sh ould see bonds strengthen during afternoon trading. However, a lackluster interest in the sale could cause bond prices to fall and mortgage rates to move higher following the announcement of the sale results.

Later this afternoon we will get to see the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding inflation and monetary policy. It may also help form opinions of the Fed’s future moves toward interest rates, even though the Fed appears to be running out of options. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they shouldn’t affect the markets or mortgage rates until afternoon hours.

There is no relevant economic data scheduled for release tomorrow, so look for the stock markets to influence bond trading and possibly mortgage rates. I am expecting to see more pressure in bonds, until at least Friday when we will get December’s Employment report.

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.

Monday’s bond market has opened well into negative territory despite early stock losses. The stock markets are giving back some of Friday’s new year gains with the Dow down 68 points and the Nasdaq down 7 points. The bond market is currently down 28/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point.

There is no relevant economic news scheduled for release today. This morning’s bond weakness can be attributed to economic stimulus news that has traders concerned. The concern comes from two angles with the first being that an economic recovery will likely be bad news for bonds as stocks will likely become the investment of choice. This could lead to significant selling that would push yields and mortgage rates higher.

The second concern is that any stimulus package will require a large amount of new debt to be issued by the government. The additional supply weakens demand for existing debt, which in turns drives bond prices lower and their yields higher. Even though hard figures or estimates have not been released, traders are assuming that it will create an unfavorable situation for current bonds and Treasury notes.

The rest of the week brings us the release of only two monthly reports that are relevant to the bond market and mortgage rates. However, in addition to those two reports, we also will see the minutes from the last FOMC meeting and a couple of Treasury auctions that may influence bond trading and possibly mortgage rates.

The first of the two reports will be posted late tomorrow morning when the Commerce Department releases November’s Factory Orders data. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted late last month, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see a decline of 2.6% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates.

Also tomorrow will be the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding inflation and monetary policy. It may also help form opinions of the Fed’s future moves toward interest rates, even though the Fed appears to be running out of options. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they shouldn’t affect the markets or mortgage rates until afternoon hours.

There are two Treasury auctions that are worth watching also. The 10-year TIPS Notes (inflation-indexed securities) will be auctioned tomorrow while the traditional 10-year Treasury Note will be sold Thursday. If investor demand for these sales is strong, we should see bonds strengthen during afternoon trading those days and possibly improve mortgage rates slightly. However, a lackluster interest in the sales could cause bond prices to fall and mortgage rates to move higher following the announcement of the sale results.

Overall, the key data of the week will be Friday’s Employment report, but look for tomorrow to also be important with the economic data, FOMC minutes and one of the two more important Treasury auctions. If they give us favorable results, mortgage rates will likely move lower for the week. But if not, we will probably see mortgage rates move higher again.

If I were considering financing/refinancing a home, I wo uld…. 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.

This week bring us the release of only two monthly reports that are relevant to the bond market and mortgage rates. However, in addition to those two reports, we also will see the minutes from the last FOMC meeting and a couple of Treasury auctions that may influence bond trading and possibly mortgage rates.

The first of the two reports will be posted late Tuesday morning when the Commerce Department releases November’s Factory Orders data. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted late last month, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see a decline of 2.6% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates.

Also Tuesday will be the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding inflation and monetary policy. It may also help form opinions of the Fed’s future moves toward interest rates, even though the Fed appears to be running out of options. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they shouldn’t affect the markets or mortgage rates until afternoon hours.

There are two Treasury auctions that are worth watching also. The 10-year TIPS Notes (inflation-indexed securities) will be auctioned Tuesday while the traditional 10-year Treasury Note will be sold Thursday. If investor demand for these sales is strong, we should se e bonds strengthen during afternoon trading those days and possibly improve mortgage rates slightly. However, a lackluster interest in the sales could cause bond prices to fall and mortgage rates to move higher following the announcement of the sale results.

The final report of the week comes Friday morning when the Labor Department will post December’s employment figures. The Employment report is considered to be one of the most important monthly releases we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a larger than expected drop in new payrolls and a small increase or even a decline in earnings would be good news for the bond market.

Current forecasts call for a 0.3% increase in the unemployment rate, pushing it to 7.0%. Analysts are expecting to see a drop in payrolls in the neighborhoo d of 475,000 with earnings rising 0.2%. If we see weaker than expected results, mortgage rates should improve Friday. However, stronger than expected readings will likely push mortgage rates higher.

Overall, the key data of the week will be Friday’s Employment report, but look for Tuesday to be important with the economic data, FOMC minutes and one of the two more important Treasury auctions. If they give us favorable results, mortgage rates will likely move lower for the week. But if not, we will probably see mortgage rates move higher again.

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 guarante ed to be in the best interest of all/any other borrowers.

Wednesday’s bond market has opened up sharply as investors continue yesterday’s late rally. The stock markets are showing losses with the Dow down 114 points and the Nasdaq down 20 points. The bond market is currently up 45/32, which will likely improve this morning’s mortgage rates nearly a full percentage point in rate compared to yesterday’s morning rates.

Yesterday’s FOMC meeting yielded a .750 cut to key short-term interest rates to bring the Fed Funds rate down to a record low of .250%. That, along with the post meeting statement, led to a huge rally in bonds and stocks late yesterday. While the stock markets are giving back some of those gains, bonds have built on top of them. However, it is difficult to see where bonds may be able to improve much more before pulling back. Accordingly, I would proceed cautiously if you have not locked and interest rate yet.

There is no relevant economic news scheduled for release today, so there is no data to drive bonds prices higher than current levels. With stocks in negative ground, bonds may appear more attractive to investors, at least short-term. But, I would not be surprised to see some profit-taking in bonds to capture the gains from the recent rally. If this is the case, we may see mortgage rates revise a little higher during afternoon trading.

Tomorrow morning brings us the release of weekly unemployment figures from the Labor Department. This data is not usually of much importance to the markets because it tracks only a week’s worth of new claims. However, the second report of the day is only moderately important so if this data varies greatly from forecasts it could influence bonds enough to affect mortgage pricing. It is expected to show that 558,000 new claims for benefits were filed last week.

The week’s last piece of economic news will be posted tomorrow morning with the release of the Conference Board’s Leading Economic Indicat ors (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 slightly higher, improving mortgage rates slightly.

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 int erest of all/any other borrowers.

TUESDAY AFTERNOON UPDATE:

Today’s FOMC meeting has adjourned with an announcement of a .750 cut to key short-term interest rates. This brings the benchmark Fed Funds rate to a record low of .250%. The post meeting statement also indicated that rates will likely remain that low for some time. They noted that the economy could get weaker and that the threat of inflation had eased “appreciably.”

The reaction in the markets was favorable for stocks and bonds. The Dow closed up 360 points while the Nasdaq closed up 81 points. Despite those gains, the bond market did well also, currently up 47/32, which will likely improve this afternoon’s mortgage rates by approximately .375 of a discount point.

The Labor Department gave us this week’s most important economic news with the release of November’s Consumer Price Index (CPI). They reported that the overall index reading fell 1.7% last month. This was a larger drop than was expected and the lar gest monthly decline since February 1947, indicating that prices for energy are still falling rapidly. The core data reading, that excludes volatile food and energy prices, was unchanged last month. Analysts were expecting to see a slight increase in the core reading. This means that prices at the consumer level of the economy were lower than expected, which is good news for bonds and mortgage rates because falling prices means inflation is not really a threat.

November’s Housing Starts was also posted this morning and also showed a record low. It revealed a decline in starts of new homes of nearly 19% and a drop of 15% in permits for new construction starts. This means that the housing sector is still weakening and appears to be well off a “bottom” that people are trying to predict.

There is no relevant economic news scheduled for release tomorrow, so look for today’s events to carry into tomorrow’s trading. The next piece of relevant economic da ta will be November’s Leading Economic Indicators (LEI) late Thursday morning.

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.

Tuesday’s bond market has opened relatively flat despite weaker than expected economic news. The stock markets are showing sizable gains with the Dow up 115 points and the Nasdaq up 39 points. The bond market is currently up 3/32, but we will still see an increase in this morning’s mortgage pricing of approximately .250 of a discount point.

The Labor Department gave us today’s big news with the release of November’s Consumer Price Index (CPI). They reported that the overall index reading fell 1.7% last month. This was a larger drop than was expected and the largest monthly decline since February 1947, indicating that prices for energy are still falling rapidly. The core data reading, that excludes volatile food and energy prices, was unchanged last month. Analysts were expecting to see a slight increase in the core reading. This means that prices at the consumer level of the economy were lower than expected, which is good news for bonds and mortgage rate s because falling prices means inflation is not really a threat.

November’s Housing Starts was also posted this morning and also showed a record low. It revealed a decline in starts of new homes of nearly 19% and a drop of 15% in permits for new construction starts. This means that the housing sector is still weakening and appears to be well off a “bottom” that people are trying to predict.

We also have today’s FOMC meeting to be concerned with. It will adjourn at 2:15 PM ET today and will likely affect afternoon trading and mortgage rates. 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 w hen the Fed may do next.

Look for an update to this report after the markets have had an opportunity to react to the meeting results.

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.

Thursday’s bond market has opened up sharply as it continues yesterday’s late rally that came as a result of the Fed FOMC minutes that were released during afternoon trading. The stock markets are mixed with the Dow down 41 points and the Nasdaq up 3 points. The bond market is currently up 33/32, but since mortgage bonds have not rallied nearly as much as Treasury Bonds, the improvement in this morning’s mortgage rates is limited to approximately .250 of a discount point.

Yesterday’s release of the minutes from the last FOMC meeting did bring us some surprises and led to the selling in stocks and shifting of funds into bonds. The minutes revealed that several Fed members are concerned about deflation (instead of inflation) where prices actually deflate rather than rise. That creates a very favorable environment for bonds and other long-term securities because their future fixed interest payments are worth more down the road. The minutes also showed the Fe d significantly lowered its outlook on economic growth and employment activity, raising more concern that the economy has more room to shrink before stabilizing. This also makes bonds more attractive to investors because slowing economic activity usually means weaker corporate profits that drive stock prices lower.

The Labor Department gave us last week’s unemployment figures this morning, saying that new claims for benefits rose from 515,000 to 542,000 when they were expected to drop to 503,000. While this is only a week’s worth of claims, it does however further support the theory that the employment sector is still weakening quickly. Another favorable note for bonds.

October’s Leading Economic Indicators (LEI) was posted by the Conference Board late this morning, showing a decline of 0.8%.and lowering September’s reading by 0.2%. Analysts were expecting to see a 0.6% drop, meaning that they are expecting economic activity to slow over the next th ree to six months at a quicker pace than many had thought.

There is no relevant economic data scheduled for release tomorrow, but I would not be surprised to see more volatility in the markets. Mortgage rates have not improved nearly as much as Treasury bonds have, but I am expecting to see the improvements in rates slowly continue. Accordingly, I am holding the float recommendations for the time being.

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.

Wednesday’s bond market has opened in positive territory following favorable results from today’s CPI release. The stock markets are showing another round of early losses with the Dow down 150 points and the Nasdaq down 40 points. The bond market is currently up 17/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.

The Labor Department gave us today’s big news with the release of October’s Consumer Price Index (CPI). They reported that the overall reading fell 1.0% last month while the core data fell 0.1%. Both of these readings were below forecasts, indicating that inflationary pressures at the consumer level of the economy were not as bad as many had thought. This is very good news for bonds and mortgage rates.

October’s Housing Starts was also posted this morning, showing a stronger level of new starts than what forecasts were calling for. That could be considered bad news for the bond ma rket and mortgage pricing, but this data is not considered to be of high importance to the markets therefore has had little impact on today’s pricing.

The minutes to the last FOMC meeting will be released at 2:00 PM ET. 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 higher 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.

Tomorrow brings us the release of weekly unemployment figures and October’s Leading Economic Indicators (LEI). The Labor Department will post weekly unemployment claims but unless it varies greatly from the 503,000 that is expected, I don’t believe this data will affect tomorrow’s mortgage pricing.

The LEI will be posted by the Conference Board at 10:00 AM ET and is expected to show a decline of 0.6%. This means that the report is predicting economic activity to slow relatively quickly in the next three to six months. That would be good news for bonds because a slowing or weakening economy generally speaking makes bonds more attractive to investors and usually leads to lower 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.

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.

This week brings us the release of five monthly reports for the markets to digest along with the minutes from the last FOMC meeting. The first report scheduled for release this week is October’s Industrial Production tomorrow morning. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.1% decline in output. Stronger levels of production would be considered bad news for the bond market and mortgage rates.

We will get the first of this week’s two key inflation readings early Tuesday morning when October’s Producer Price Index (PPI) is posted. The PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If it reveals stronger than expected readings, in dicating that inflationary pressures are rising, the bond market will probably react negatively and should drive mortgage rates higher. If we see in-line or weaker than expected numbers, mortgage rates should fall. Current forecasts are calling for a decline of 1.5% in the overall reading and a 0.2% increase in the core reading.

Wednesday’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.

Also Wednesday is the afternoon 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 pr essures, we may see the bond market move lower and mortgage rates higher Wednesday 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.

October’s Consumer Price Index (CPI) will be released at 8:30 AM ET Thursday morning. This index is similar to Tuesday’s PPI, except it measures inflationary pressures at the more important consumer level of the economy. The overall portion is expected to show a drop of 0.8% while the core data is expected to rise 0.2%.

Overall, look for Tuesday or Thursday to be the most important day of the week with the PPI and CPI reports scheduled for release those days. They are the two most important releases of the week and can individually lead to large swings in the markets and mortgage rates. The FOMC minutes may also heavily influence trading and deserve to be watched also. I think this will be a fa irly active week for mortgage rates, so please maintain regular contact with your mortgage professional.

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.

Friday’s bond market has opened in positive territory following the release of weaker than expected economic news. The stock markets are posting sizable losses after yesterday’s late rally in stocks hurt bond prices and mortgage rates. The Dow is currently down 260 points while the Nasdaq has lost 60 points. The bond market is currently up 22/32, but due to yesterday’s late losses we likely will not see much of an improvement in this morning’s mortgage rates.

October’s Retail Sales report was posted this morning, showing a surprising drop in sales of 2.8%. This was a larger decline than was expected, the fourth consecutive monthly drop and the largest monthly decline since January 1987. This indicates that the economy is still softening, which is good news for the bond market and mortgage rates.

The second report of the day was the preliminary reading to the University of Michigan’s Index of Consumer Sentiment for this month. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It revealed a reading of 57.9 that was a little stronger than expected, but not enough to negatively affect bond trading.

Next week is moderately busy with economic reports but it does bring us the release of two key inflation readings that can significantly impact bond prices and mortgage rates. The week kicks off Monday with the release of October’s Industrial Production that tracks manufacturing output. This report is considered to have a medium level of importance to the markets and is expected to show a small decline in output.

Besides the two inflation readings and Monday’s manufacturing report, we also will get the minutes from the last FOMC meeting and a couple of other lesser important releases. Look for more details on next week’s events in Sunday’s weekly preview.

If I were considering financing/refinancing a home, I would…. Lock if my closin g 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.

WEDNESDAY AFTERNOON UPDATE:

This week’s FOMC meeting has adjourned with an announcement of a half-point rate cut by the Fed in an effort to stimulate economic activity. The move was widely expected by market participants, but has still boosted stocks and hurt bonds. The Dow is currently up 218 points while the Nasdaq has gained 44 points. The bond market is currently down 17/32, which will likely push this afternoon’s mortgage rates higher by approximately .250 of a discount point.

The post-meeting statement indicated that the Fed was still concerned about the economy and was expecting further weakness. This led to speculation that the Fed may lower short-term rates again in the future despite the fact that the Federal Funds rate is now at a record low of 1.00%. It has not been this low since June 2003 to June 2004. The fact that it appears the Fed has conceded more measures may be needed and is ready to act has helped drive stock prices higher during afternoon trading. This has made bonds less attractive to investors and is the reason we likely will see upward revisions to mortgage rates this afternoon.

The Commerce Department reported this morning that Durable Goods Orders for September rose 0.8% when they were expected to fall 1.0%. This means that manufacturing activity was stronger than expected, which is bad news for bonds and mortgage rates.

Tomorrow morning brings us the release of the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP). The GDP is considered to be the benchmark measurement of economic growth because it is the sum of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Tomorrow’s release is the first and usually has the biggest impact on the markets. Current forecasts call for a decline of approximately 0. 5% in the GDP. If this report shows a larger decline, I am expecting to see the bond market rally and mortgage rates to fall tomorrow.

If I were considering financing/refinancing a home, I would…. Float if my closing was taking place within 7 days… Float if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Wednesday’s bond market has opened in negative territory again as investors await today’s FOMC meeting adjournment. The stock markets were trading higher earlier but are now in negative territory after yesterday’s huge rally. The Dow is currently down 32 points while the Nasdaq is down 14 points. The bond market is currently down 5/32, which will likely push this morning’s mortgage rates slightly higher.

The Commerce Department reported this morning that Durable Goods Orders for September rose 0.8% when they were expected to fall 1.0%. This means that manufacturing activity was stronger than expected, which is bad news for bonds and mortgage rates. However, since the markets are directing their attention to today’s FOMC results, the higher than expected orders has not had much of an impact on this morning’s mortgage rates.

The FOMC meeting began yesterday and will adjourn at 2:15 PM ET today. There is now a pretty large consensus that the Fed w ill lower key short-term interest rates at this meeting, but what is being debated is the size of the cut. Some analysts are calling for a .750 cut while the majority think a half-point reduction is coming. This makes the post meeting statement even more important than usual as traders will try to figure out if the Fed thinks this is the last cut or if they are prepared to make another in the future.

Look for an update to this report shortly after the markets have had an opportunity to react to the Fed move and the post-meeting statement.

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 guarant eed to be in the best interest of all/any other borrowers.

Tuesday’s bond market has opened well in negative territory despite a new record low reading on consumer confidence. The stock markets are showing sizable gains as investors speculate about another Fed rate cut tomorrow. The Dow is currently up 115 points while the Nasdaq has gained 9 points. The bond market is currently down 22/32, which with yesterday’s late weakness will push this morning’s mortgage rates higher by approximately .750 of a discount point.

The Conference Board reported late this morning that their Consumer Confidence Index (CCI) fell this month to its lowest reading ever. The reading of 38.0 was significantly lower than the 52.0 that was forecasted and indicates that consumers are too concerned about their own financial situations to make large purchases in the near future. This is actually favorable data for the bond market and mortgage rates, but traders are preparing for tomorrow’s FOMC meeting and reacting to this morning’s stock gain s. This has prevented bonds from moving higher as a result of this report.

The week’s FOMC meeting began today and will adjourn tomorrow afternoon. There is now a pretty large consensus that the Fed will lower key short-term interest rates at this meeting, but what is being debated is the size of the cut. Some analysts are calling for a .750 cut while the majority think a half-point reduction is coming. This makes the post meeting statement even more important than usual as traders will try to figure out if the Fed thinks this is the last cut or if they are prepared to make another in the future. The meeting will adjourn at 2:15 PM ET, so look for any reaction to come during afternoon trading.

Tomorrow also brings us the release of some important economic data. The Commerce Department will post Durable Goods Orders for September at 8:30 AM tomorrow. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factor ies for big-ticket items. Analysts are currently calling for a drop in new orders of approximately 1.0%. If we see a smaller than expected decline in orders, mortgage rates will probably rise as bond prices fall. A weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast.

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.

Monday’s bond market has opened fairly flat with the stock markets mixed and despite stronger than expected economic news. The stock markets are in another volatile session after the international markets that had another significant sell-off. The Dow is moving in a range of 250 points between its high and low of the morning, but currently stands up 30 points. The Nasdaq is also fluctuating between positive and negative ground and is currently down 6 points. The bond market is up 2/32, but we will likely see an increase in this morning’s mortgage rates of approximately .125 – .250 of a discount point due to movements late Friday.

Today’s only economic data is the week’s least important. September’s New Home Sales report was posted late this morning, showing an increase in sales of 2.7% when it was expected to reveal another decline. However, offsetting that increase was a downward revision to August’s sales figures. Still, this data is not considered to be of high importance and has not influenced bond trading or mortgage rates today.

Tomorrow morning brings us the release of the Consumer Confidence Index (CCI) for the month of October. This Conference Board index will be posted at 10:00 AM and gives us a measurement of consumer willingness to spend. It is expected to show a sizable decline in confidence from last month’s 59.8 reading, indicating that consumers are less likely to make large purchases in the near future. As long as the reading doesn’t exceed the forecasted 52.0, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

The week’s FOMC meeting is a two-day meeting that begins tomorrow and adjourns Wednesday afternoon. Assuming the Fed stands pat and leaves rates unchanged, traders will be looking at the post-meeting statement for any indication of the Fed’s next move. Since there is a fair amount of uncertainty and a lack of a strong consensus of what the Fed will do here, the move itself, if it happens, will likely cause plenty of volatility in addition to the post-meeting statement. The meeting will adjourn at 2:00 PM Wednesday, so look for quite a bit of volatility during afternoon hours.

Overall, it is difficult to peg a single day of the week as being the most important but I am expecting to see plenty of movement in rates this week. The data being posted tomorrow, Wednesday and Thursday is all very important to the markets. The FOMC meeting is the single most important event of the week, but we may see noticeable movement in mortgage rates several days this week. Accordingly, please maintain contact with your mortgage professional.

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 clo sing 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.

This week is packed with economic releases and major events that will likely lead to a fair amount of volatility in the markets and mortgage pricing. There are seven reports scheduled for release along with another FOMC meeting. The first of the week’s news comes late tomorrow morning with the release of September’s New Home Sales. This data covers the remaining 15% of home sales that last week’s Existing Home Sales report tracked and is this week’s least important data. It is expected to show a decline in sales, but regardless of its results I am not expecting it to have a significant impact on mortgage rates tomorrow.

The first important data will be posted Tuesday morning with the release of the Consumer Confidence Index (CCI) for the month of October. This Conference Board index will be posted at 10:00 AM and gives us a measurement of consumer willingness to spend. It is expected to show a sizable decline in confidence from last month’s 59.8 reading, ind icating that consumers are less likely to make large purchases in the near future. As long as the reading doesn’t exceed the forecasted 52.0, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

The week’s FOMC meeting is a two-day meeting that begins Tuesday and adjourns Wednesday afternoon. Assuming the Fed stands pat and leaves rates unchanged, traders will be looking at the post-meeting statement for any indication of the Fed’s next move. Since there is a fair amount of uncertainty and a lack of a strong consensus of what the Fed will do here, the move itself, if it happens, will likely cause plenty of volatility in addition to the post-meeting statement. The meeting will adjourn at 2:00 PM Wednesday, so look for quite a bit of volatility during afternoon hours.

Wednesday morning, the Commerce Department will post Durable Goods Orders for September. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. Analysts are currently calling for a drop in new orders of approximately 1.0%. If we see a smaller than expected decline in orders, mortgage rates will probably rise as bond prices fall. A weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast.

The next relevant data is the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) early Thursday morning. The GDP is considered to be the benchmark measurement of economic growth because it is the sum of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Thursday’s release is the first and usually h as the biggest impact on the markets. Current forecasts call for a decline of approximately 0.5% in the GDP. If this report does show a decline, I am expecting to see the bond market rally and mortgage rates to fall.

There are three reports scheduled for release Friday. The first is the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.7%. A smaller than expected increase would be good news for bonds and mortgage rates.

September’s Personal Income and Outlays report will also be posted early Friday. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making econ omic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see an increase of 0.1% in income and decline in outlays of 0.2%.

The week’s last report comes at 10:00 AM ET Friday when the University of Michigan updates their Index of Consumer Sentiment for this month. Current forecasts show this index remaining nearly unchanged from this month’s preliminary reading of 57.5. This index is important because it helps us measure consumer confidence, which is believed to indicate consumers’ willingness to spend. Since consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be important.

Overall, it is difficult to peg a single day of the week as being the most important. The data being posted Tuesday, Wednesday and Thursday is a ll very important to the markets. The FOMC meeting is the single most important event of the week, but we may see noticeable movement in mortgage rates several days this week. Accordingly, please maintain contact with your mortgage professional.

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.

Friday’s bond market opened in positive territory following early stock weakness. The stock markets are continuing their downward spiral with the Dow down 300 points and the Nasdaq down 40 points. The bond market is currently up 20/32, but we will still see an increase in this morning’s mortgage rates of approximately .250 – .375 of a discount point due to weakness late yesterday.

The only economic news released today was September’s Existing Home Sales data from the National Association of Realtors. They reported an increase of over 5% in home resales last month when the report was expected to show an increase of approximately 1%. This means that sales activity was stronger than expected last month. That can be considered a negative for bonds and mortgage rates, but the market seems to be giving that data little weight.

The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not this is the bottom for the stock markets. It seems there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result, indicating that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.

Next week is packed with economic releases along with the next FOMC meeting. The first data comes Monday when we will get New Homes Sales for September. This is the sister report to today’s Existing Home Sales release and is also not considered to be of much importance to the markets. It is next week’s least important report.

The rest of the week brings us important reports every day. There is another FOMC meeting that adjourns W ednesday afternoon that will likely lead to plenty of volatility in the markets. Look for details on next week’s data and 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… 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.

Tuesday’s bond market has opened in negative territory as the volatility in the stock markets continue. After opening in positive territory, the Dow and Nasdaq have fallen into negative ground. The Dow is currently down 60 points while the Nasdaq has lost 20 points. The bond market is currently down 15/32, but I am not expecting to see much of a change in this morning’s mortgage rates.

If the major stock indexes continue to flip flop between positive and negative ground, we will likely see bonds and mortgage rates fluctuate also. Until the markets stabilize, it will be difficult to predict movement in mortgage pricing. However, I still believe that there is more room for stocks to fall, which would likely improve bonds and lower mortgage rates. In fact, I would not be surprised to see the 10,000 Dow benchmark be a ceiling for the immediate future. Accordingly, I am cautiously holding the float recommendations for the time being.

The first news of the week comes this afternoon when the Fed will release 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 higher tomorrow afternoon. However, if they indicate that inflation is easing and that a rate increase is not likely in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.

The only factual economic data of the week will be posted Friday morning. August’s Goods and Services Trade Balance will be released that day, but is not likely to cause much of a change in mortgage pricing. It will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates.

If I were consider ing 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.

Monday’s bond market has opened up sharply after this morning’s stock markets are selling off again. The Dow is currently down 450 points while the Nasdaq has 100 points. The bond market is currently up 29/32, which will likely improve this morning’s mortgage rates by approximately .375 of a discount point.

This morning’s stock losses has pushed the Dow below the 10,000 mark for the first time since late October 2004. I appears that this trend may continue, at least for the short-term and should benefit bonds as investors seek safe-haven. Accordingly, I am shifting to a float recommendation across the board. This may change back to lock at any time, but as long as stock are moving lower we should see mortgage rates follow suit.

This week brings us only one monthly economic report for the markets to digest and it is not considered to be of high importance. This means that the week will be left mostly up to the stock markets and other influences since there is a lack of factual data for bonds to trade on. In addition to the one report, we will also get the minutes from the last FOMC meeting that can also cause movement in rates if it reveals any surprises.

The first news of the week comes tomorrow afternoon when the Fed will release 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 higher tomorrow afternoon. However, if they indicate that inflation is easing and that a rate increase is not likely 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.

This week brings us only one monthly economic report for the markets to digest and it is not considered to be of high importance. This means that the week will be left mostly up to the stock markets and other influences since there is a lack of factual data for bonds to trade on. In addition to the one report, we will also get the minutes from the last FOMC meeting that can also cause movement in rates if it reveals any surprises.

The first news of the week comes Tuesday afternoon when the Fed will release 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 higher Tuesday afternoon. However, if they indicate that inflation is easing and that a rate increase is not likely in the coming months, we s hould see the bond market rise and mortgage rates drop during afternoon trading.

The only factual economic data of the week will be posted Friday morning. August’s Goods and Services Trade Balance will be released that day, but is not likely to cause much of a change in mortgage pricing. It will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates.

Also worth noting are two public speaking engagements by Fed Chairman Bernanke Monday and Tuesday. I don’t expect them to have much of an impact on the markets, but his words always have the potential to create a reaction in trading. He will be speaking at the annual meeting of the National Association for Business Economics, but I don’t see this to likely affect mortgage rates.

Overall, I suspect this is going to be fairly quiet week for the bond market and mortgage rates, especially compared to last week. For the most p art, I believe the week will be left to the stock markets and the Fed minutes. The most important day of the week is likely Tuesday with the Fed minutes, but any day of significant stock volatility may make that particular day the most eventful. The bond market will close early Friday in observance of Monday’s Columbus Day holiday, but it will also likely be a non-event to the markets.

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.

TUESDAY AFTERNOON UPDATE:

Today’s FOMC meeting has adjourned with an announcement of no change to key short-term interest rates. The post-meeting statement indicated that the Fed felt key rates were low enough to spur economic activity. The stock markets initially reacted negatively to the news since traders were expecting a rate cut, but then staged a rally that pushed the Dow up 141 points and the Nasdaq up 28 points.

The bond market did not fair so well. As expected, as soon as stocks started to rise, bonds suffered. The same funds that were moved into bonds and drove prices higher yesterday, now were hurting bonds as they were shifted back into stocks. The result was the bond market closing down 26/32 and a sizable increase to mortgage rates. I suspect that there is more room for bonds to fall if stocks continue to move higher. Therefore, holding the lock recommendations seem to be the prudent stance at this time.

Today’s on ly relevant economic data was August’s Consumer Price Index (CPI). It showed a decline in the overall reading of 0.1% and an increase of 0.2% in the core data reading. Both of these readings matched forecasts, therefore, they had little impact on the bond market or mortgage rates.

August’s Housing Starts report is the only relevant data being posted tomorrow 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. Tomorrow’s report is expected to show a drop in new housing starts from July’s levels.

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.

Tuesday’s bond market has opened in positive territory again as yesterday’s frantic buying has carried into this morning’s trading. The stock markets are showing modest gains compared to yesterday’s massive sell-off that had the Dow closing down over 500 points. The Dow is currently up 35 points while the Nasdaq has gained 6 points. The bond market is currently up 9/32, which will likely improve this morning’s mortgage rates by another .250 of a discount point.

Today’s only relevant economic data was August’s Consumer Price Index (CPI). It showed a decline in the overall reading of 0.1% and an increase of 0.2% in the core data reading. Both of these readings matched forecasts, therefore, they have had little impact on the bond market or mortgage rates.

The biggest influence on this morning’s trading is still the financial sector woes and the stock markets. There is still talk of more bank and financial company collapses that could still create widespread panic in the markets. The spotlight is currently on insurance giant AIG and its ability to continue to remain solvent. Whether or not that will be accomplished remains to be seen. However, the markets often overreact to a crisis and then correct. The stock volatility that came as a result of news from the past few days has certainly benefited bonds as investors seek safe-haven. But, I suspect that this may end in the immediate future, hence the extended lock recommendation yesterday. I am going to hold the lock recommendations for the time being as any type of correction in stocks could drive bond prices sharply lower and create a significant spike in mortgage rates.

The FOMC meeting will adjourn at 2:15 PM today. The recent financial and bank news has some analysts now thinking that the Fed may lower key short-term interest rates at this meeting. I don’t believe that to be the case and that the Fed will leave rates unchanged. However, I would no t be surprised to see the post-meeting statement address the recent events. Depending on what is said or addressed in the statement, we may see another round of volatility in stocks and bonds during afternoon trading today.

Look for an update to this report shortly after the markets have an opportunity to react to the FOMC meeting’s results.

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.

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.

Wednesday’s bond market has opened flat despite a stronger than expected economic news. The stock markets are showing early losses with the Dow down 20 points and the Nasdaq down 10 points. The bond market is currently nearly unchanged, but we will still likely see an improvement in this morning’s mortgage rates of approximately .250 of a discount point due to strength in bonds late yesterday.

The Commerce Department released July’s Factory Orders data this morning, revealing a 1.3% increase in new orders. This report measures manufacturing sector strength and is similar to last week’s Durable Goods Orders, but includes orders for both durable and non-durable goods. Analysts’ latest forecasts were calling for an increase of 0.8% in new orders, meaning manufacturing activity was stronger than expected. However, the data’s impact on trading and mortgage rates has been fairly minimal this morning.

Later today, the Federal Reserve will release its Be ige Book report. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings. It is usually released approximately two weeks prior to each FOMC meeting. If the 2:00 PM ET release reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed’s next interest rate move. Most likely though, it will be a non-event and will not lead to a change in mortgage rates.

Tomorrow morning brings us the revision to the 2nd Quarter Productivity numbers, which measures employee productivity in the workplace. It is expected to show an upward change from the previous estimate of a 2.2% annual pace. Forecasts are currently calling for a reading of 3.4%, which would be good news for the bond market and possibly lead to slightly lower mortgage rates tomorrow morning.

If I were considering financing/refinancin g 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.

Tuesday’s bond market has opened in negative territory following early stock gains. The stock markets are starting this shortened week with strong gains as the Dow is up 183 points and the Nasdaq has gained 27 points. The bond market is currently down 6/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point over Friday’s morning rates.

The Institute for Supply Management posted their manufacturing index late this morning, showing a reading of 49.9. This was very close to last month’s reading and slightly higher than forecasts, but has not had much of an influence on this morning’s trading or mortgage pricing.

Tomorrow morning brings us the release of July’s Factory Orders data. This report measures manufacturing sector strength and is similar to last week’s Durable Goods Orders, but includes orders for both durable and non-durable goods. This data is expected to show a 0.4% increase in new orders . A smaller than expected rise should lead to lower mortgage rates Wednesday.

Also scheduled for release tomorrow is the Federal Reserve release of its Beige Book report. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings. It is usually released approximately two weeks prior to each FOMC meeting. If the 2:00 PM ET release reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed’s next interest rate move. Most likely though, it will be a non-event and will not lead to a change in mortgage rates.

Overall, I expect to see the most movement in rates Friday due to the importance of the Employment report. I am holding the short-term lock recommendations for the time being, but this does not mean that I think rates will necessarily move higher. It means that I feel the risk versu s the potential reward of continuing to float an interest rate is leaning heavily towards the risky side. Accordingly, locking seems to be the prudent position at this time if closing in the immediate future.

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.

Wednesday’s bond market has opened in negative territory as traders continue to digest yesterday’s events. Also contributing to this morning’s weakness was news of a much larger than expected quarterly loss and mortgage giant Freddie Mac. This raised concerns about the credit markets and the stability of the company and its sister entity Fannie Mae. The concern led to more selling in bonds in this morning and sizable increases to mortgage rates.

The stock markets are mixed with the Dow down 21 points and the Nasdaq up 6 points. The bond market is currently down 12/32, which will likely push this morning’s mortgage rates higher by approximately .375 – .500 of a discount point over yesterday’s morning rates.

There is no relevant economic news scheduled for release today. Yesterday’s FOMC meeting has adjourned with an announcement that there was not a change to key short-term interest rates. It was the second consecutive meeting with no change and was widely expected. The post-meeting statement indicated that the Fed was aware and considered the economic slowdown but also was quite concerned about the threat of inflation. Those words created concern in the bond market since inflation erodes the value of a bond’s future fixed interest payments.

The next piece of news is tomorrow’s posting of weekly unemployment figures and those are not considered to be of high importance to the markets. This leaves the bond market to be influenced by stock and oil prices. If stocks continue to move higher, we may see bonds suffer and mortgage rates move higher until Friday’s data is posted. If the major indexes begin to fall, bond could benefit and drive mortgage rates lower.

Employee Productivity and Costs data for the second quarter will be released Friday morning. It will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don’t see this being a big mover of mortgage pricing, but since it is the only data of the day it may influence rates slightly. Analysts are currently expecting to see an increase in productivity of 2.7%. A higher than expected reading could help improve bonds, leading to lower mortgage 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… 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.

TUESDAY AFTERNOON UPDATE:

Today’s FOMC meeting has adjourned with an announcement that there was not a change to key short-term interest rates. This was the second consecutive meeting with no change and was widely expected. The post-meeting statement indicated that the Fed was aware and considered the economic slowdown but also was quite concerned about the threat of inflation. That created concern in the bond market since inflation erodes the value of a bond’s future fixed interest payments.

However, bonds have actually held up quite well during afternoon trading, at least so far. The stock markets have extended their earlier gains with the Dow up 275 points and the Nasdaq up 50 points. The bond market is near morning levels, so I am not expecting a change to mortgage rates unless bonds fall from current levels.

There was no relevant economic news posted this morning. Stock started the day off strong as oil prices continue to f all. High fuel costs have been noted by many sources as a contributing factor to the slowing economy. As oil prices fall well off their recent highs, that concern seems to be easing. This leads to better expectations for economic activity and corporate earnings.

There is no relevant economic data scheduled for release tomorrow. The next piece of news is Thursday’s posting of weekly unemployment figures and those are not considered to be of high importance to the markets. This leaves the bond market to be influenced by stock and oil prices. If stocks continue to move higher, we may see bonds suffer and mortgage rates move higher until Friday’s data is posted. If the major indexes begin to fall, bond could benefit and drive mortgage rates lower.

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 taki ng 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.

Tuesday’s bond market has opened in negative territory due to early stock gains. The stock markets are off to a strong start with the Dow up 165 points and the Nasdaq up 30 points. The bond market is currently down 6/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point over yesterday’s morning rates.

There was no relevant economic news posted this morning. Stock traders are showing their optimism in the economy following another decline in oil prices. High fuel costs have been noted by many sources as a contributing factor to the slowing economy. As oil prices fall well off their recent highs, that concern seems to be easing. This leads to better expectations for economic activity and corporate earnings.

Today’s FOMC meeting will adjourn at 2:15 PM ET and is expected to bring no change to key interest rates. If that is indeed the result, I expect top see little reaction in the markets . However, the post-meeting statements seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Accordingly, we may still see some volatility in the markets and possibly mortgage pricing during afternoon hours even if the Fed leaves interest rates alone.

Look for an update to this report after the markets have an opportunity to react to the news.

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.

This week brings us the release of only three pieces of economic data that are likely to affect mortgage rates. However, the biggest event of the week will be the Federal Open Market Committee (FOMC) meeting Tuesday. We may see some pressure in bonds tomorrow as investors prepare for the meeting, but most traders will likely make their moves post-meeting Tuesday.

The first important release is June’s Personal Income and Outlays data tomorrow morning. The Income & Spending report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for a decline of 0.1% in income and an increase of 0.5% in spending.

Also scheduled for release tomorrow is June’s Factory Orders data. This report helps us measure manufacturing sector strength by tracking orders for both durable and non-durable goods during the month of June. It is similar to last week’s Durable Goods Orders report that tracks only orders for big-ticket items. Since a significant portion of the data was released last week, this report may not have as big of an impact on the markets as you may think. Analysts’ are expecting to see an increase of approximately 0.7% in new orders.

The FOMC meeting will adjourn at 2:15 PM Tuesday. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Look for the statement to lead to volatility during afternoon trading if it hints at what the Fed’s next move may be.

Bond traders will be watching the post meeting statement very carefully. Generally speaking, a hint of rate hikes in the future will be construed as an indication that inflation is still a concern and would likely lead to bond selling and increases to mortga ge rates. If the statement gives an indication that the Fed is not as concerned with inflation as previously noted, the bond market should rally, leading to lower mortgage rates.

Employee Productivity and Costs data for the second quarter will be released Friday morning. It will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don’t see this being a big mover of mortgage pricing, but since it is the only data of the day it may influence rates slightly. Analysts are currently expecting to see an increase in productivity of 2.7%. A higher than expected reading could help improve bonds, leading to lower mortgage rates.

Also worth noting are two important Treasury auctions this week. The sale of 10-year Notes will be held Wednesday while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms pa rticipating prepare for them. However, as long as they are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted. Those results will be announced at 1:00 PM each sale day. If there will be revisions to mortgage rates because of the results, look for them to be made during afternoon trading Wednesday and/or Thursday.

Overall, I am expecting to see a choppy week in trading and mortgage rates. We will likely see the most movement in rates Tuesday with the FOMC meeting. Wednesday’s Treasury auction may also affect rates during afternoon trading. I suspect that the rest of the week will be driven by stock market gains or losses.

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.

Thursday’s bond market has opened in negative territory as stocks continue their upward move and inflation concerns make bonds less attractive to investors. Yesterday’s rally in bonds seem to be carrying over into this morning’s trading with the Dow up 58 points and the Nasdaq up 7 points. The bond market is currently down 5/32, which with yesterday’s late selling will likely push this morning’s mortgage rates higher by approximately .500 of a discount point compared to yesterday’s morning rates.

The minutes from the last FOMC meeting did raise some concern in the bond market yesterday and helped fuel the stock rally. Some of excerpts included indications that the Fed’s next move would likely be an increase to key short-term interest rates rather than another rate cut. This means that the Fed is more worried about inflation than a slowing economy. Since inflation erodes the value of a bond’s future fixed interest payments, this news sent mortgage related bon ds lower and mortgage rates higher.

Today’s only relevant data was June’s Housing Starts report that surprised many by showing an increase in starts of new homes. It was expected to show another decline in starts. However, this data is not considered to be of high importance and has not had much influence on today’s trading or mortgage pricing.

The Labor reported that 366,000 new claims for unemployment benefits were filed last week. This was an increase from the previous week, but not as high as analysts had expected. However, since this data tracks only a week’s worth of claims it also hasn’t affected mortgage rates this morning.

There is no relevant economic data scheduled for release tomorrow, meaning that stocks will likely heavily influence bond trading and mortgage rates. With this week’s volatility, we could see traders adjust portfolios ahead of the weekend. That could lead to further volatility in bonds and mortgage rates agai n tomorrow.

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.

Wednesday’s bond market has opened in negative territory again after this morning’s economic data revealed stronger than expected readings. The stock markets seem to be having little reaction to the news with the Dow up 4 points and the Nasdaq nearly unchanged. The bond market is currently down 15/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point.

The big news this morning was June’s Producer Price Index (PPI) from the Labor Department. They reported that the overall CPI reading rose 1.1% while the core data rose 0.3%. Both of these readings exceeded forecasts, indicating that inflationary pressures were more of a threat at the consumer level of the economy than many had thought.

June’s Industrial Production data was also released this morning. It showed an increase in output at U.S. factories, mines and utilities of 0.5%. This was much stronger than the 0.2% increase that was expecting, m eaning manufacturing activity was higher than thoughts. This is considered bad news for the bond market and mortgage rates.

Part two of Fed Chairman Bernanke’s testimony on the economy is being made to the House Financial Services Committee. I am not expecting his words to impact bonds or rates this morning unless something in the question and answer portion surprises us.

The minutes from the last FOMC meeting will be posted later today. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting. I am not expecting to see a change in rates as a result of them, but a possibility does exist.

Tomorrow’s only relevant data is June’s Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a smal l decline in new starts of housing projects. However, I don’t see this data having a much of an impact on mortgage rates tomorrow unless 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… 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.

Monday’s bond market has opened in positive territory following early stock losses. The stock markets are kicking the week off with the Dow down 72 points and the Nasdaq down 8 points. The bond market is currently up 16/32, but we will likely still see an increase in mortgage rates of approximately .250 of a discount point as investors digest the news of the Fed supporting Fannie Mae and Freddie Mac.

This week brings us the release of six important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.

The first piece of data comes tomorrow mo rning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 1.3% increase in the overall reading and a 0.3% rise in the core data reading. The bond market should react quite favorably to weaker than expected readings, but a bigger than expected jump in the core reading could send mortgage rates higher tomorrow.

June’s Retail Sales report will also be posted tomorrow. The Commerce Department is expected to say that sales at retail establishments rose 0.3% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.

Fed Chairman Bernanke will speak before the Senate Banking Committee tomorrow morning and the House Financial Services Committee Wednesday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns. This should create a great deal of volatility in the markets during the testimony and the question and answer session that follows. If he indicates that inflation is still a point of concern, we will likely see the bond market tank and mortgage rates rise.

Overall though, I think we will see the most movement in mortgage pricing this week tomorrow or Wednesday due to the release of the inflation related indexes and Mr. Bernanke’s testimony those days. It will likely be an active week for mortgage rates with a fair amount of volatility, so please maintain contact with your mortgage professional if still floating an interest ra te.

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.

This week brings us the release of six important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.

The first piece of data comes Tuesday morning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 1.3% increase in the overall reading and a 0.3% rise in the core data reading. The bond market should react quite favorably to weaker than expected readings, but a bigger than expected jump in the core reading could send mor tgage rates higher Tuesday.

June’s Retail Sales report will also be posted Tuesday. The Commerce Department is expected to say that sales at retail establishments rose 0.3% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.

Next on tap is Wednesday’s release of June’s Consumer Price Index (CPI). It is a mirror of Tuesday’s PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.7% increase in the overall index and a 0.2% rise in the core data. The core data is considered to be the key reading of both the PPI and CPI because they exclude more volatile food and en ergy prices, giving us a more stable measure of inflation. Higher than expected readings could raise inflation fears and push mortgage rates higher both days.

June’s Industrial Production data will also be posted Wednesday morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.2% rise in production, indicating that the manufacturing sector showed moderate growth during the month. A smaller than expected increase would be good news and could help push mortgage rates slightly lower Wednesday.

Also worth noting about Wednesday is the release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting.

Fed Chairman Bernanke will speak before th e Senate Banking Committee Tuesday morning and the House Financial Services Committee Wednesday morning at 10:00am ET. His testimony will be broadcasted and will be watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation concerns. This should create a great deal of volatility in the markets during the testimony and the question and answer session that follows. If he indicates that inflation is still a point of concern, we will likely see the bond market tank and mortgage rates rise.

Thursday’s only relevant data is June’s Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a small decline in new starts of housing projects. However, I don’t see this data having a much of an impact on mortgage rates Thursday unless it varies greatly f rom forecasts.

Overall though, I think we will see the most movement in mortgage pricing this week on Tuesday or Wednesday due to the release of the inflation related indexes and Mr. Bernanke’s testimony those days. This weekend’s news of Fed support of Fannie Mae and Freddie Mac will likely help stocks, but I am not sure of how the bond and mortgage markets will react to that news. I suspect it will be taken as positive news, but it will be interesting to see if it has a significant influence on mortgage pricing. Regardless, even without that turn of events, it will likely be an active week for mortgage rates with a fair amount of volatility.

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 o nly 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 despite significant stock losses. The major stock indexes are falling as investors fear that mortgage giants Fannie Mae and Freddie Mac are on the brink of collapse, renewing housing and credit concerns. The Dow is currently down 199 points while the Nasdaq has fallen 35 points. The bond market is currently down 18/32, but this morning’s mortgage rates will likely show little change following yesterday’s closing activity.

Neither of today’s economic reports were that important to the markets. The first of the two showed that the U.S. trade deficit fell to $59.8 billion in May when it was expected to rise. The University of Michigan Index of Consumer sentiment for July came in at 56.6. This was a slight increase from June’s final reading when it was expected to fall nearly a point. That means that consumers were more optimistic about their own financial situation than many had thought, which is considered a negative for bonds and mortgage rates.

Despite the difference between forecasts and actual results, this morning’s economic data really has played little part in the market’s direction today. Concerns that the government may need to take over or bail out Fannie and Freddie is the source of today’s volatility. It’s hard to say whether this will end up being a positive or negative for mortgage rates. But it is a fairly safe bet that we will see plenty of volatility in the markets are public comments made, news releases are posted and the almighty rumor mill kicks into high gear. Accordingly, be careful if still floating an interest rate.

Next week brings us plenty of important economic news for the markets to digest. Some of the key reports will give us inflation readings at the producer and consumer level of the economy and retail level sales from last month, along with the minutes from the last FOMC meeting. However, none of these rel eases come until the middle and latter part of the week so I am expecting the stock markets and related news to be a major influence on bond trading and mortgage rates the first couple of days. Look for more 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… 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.

WEDNESDAY AFTERNOON UPDATE:

This week’s FOMC meeting has adjourned with an announcement that no change was made to key short-term interest rates, which was the first time in the past nine months. This was widely expected, but the post-meeting statement did indicate concerns about inflation. This has helped push bond prices lower than pre-adjournment levels. However, they have not moved enough as of yet to likely cause afternoon revisions to mortgage rates. I am expecting most lenders to reflect these changes in tomorrow’s rates.

The stock markets have improved from this morning’s levels with the Dow 92 points and the Nasdaq up 48 points. The bond market is currently down 12/32. If bond prices fall much further, we may see upward revisions to mortgage rates by the end of business. If they remain near current levels, the increase will probably be reflected in tomorrow’s pricing.

The Commerce Department gave us May’s Durable Goods Orders this morning, announcing no change in orders for big-ticket items between April and May. This was expected and therefore had little impact on the bond markets or mortgage rates.

Also posted this morning was May’s New Home Sales report. It showed a decline in sales of newly constructed homes between April and May, but to a level that was expected. With this data being considered of low importance and the fact that it came very close to analysts’ forecasts, this data has been a non-factor in this morning’s trading.

The only relevant economic data scheduled for release tomorrow 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 0.9% rate of growth, but analysts are expecting to see an upward revision to 1.0%.

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.

Wednesday’s bond market has opened in negative territory following early stock gains. The stock markets are trading in positive territory with the Dow up 74 points and the Nasdaq 39 points. The bond market is currently down 7/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

The Commerce Department gave us May’s Durable Goods Orders this morning, announcing no change in orders for big-ticket items between April and May. This was expected and therefore had little impact on the bond markets or mortgage rates.

Also posted this morning was May’s New Home Sales report. It showed a decline in sales of newly constructed homes between April and May, but to a level that was expected. With this data being considered of low importance and the fact that it came very close to analysts’ forecasts, this data has been a non-factor in this morning’s trading.

The FOMC meeting will adjourn at 2:15 PM ET today. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting, so the markets will be watching their post-meeting statement for any indication of the Fed’s next move. Many analysts now think the Fed will need to raise key short-term interest rates before they make any further cuts. The statement likely will not give a clear definitive answer to this question, but it could help fuel theories by market participants that will cause plenty of volatility in the markets this afternoon.

I still think that we will hear words of concern about inflation in the economy as a result of high fuel prices. This could lead to higher mortgage rates this afternoon if accurate. Look for an update to this report after the markets have an opportunity to react to the announcement and post-meeting statement.

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.

Tuesday’s bond market has opened in positive territory following the release of much weaker than expected economic data. The stock markets are showing losses with the Dow down 71 points and the Nasdaq down 22 points. The bond market is currently up 12/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

The Conference Board posted June’s Consumer Confidence Index (CCI) late this morning, revealing a reading of 50.4. This was much lower than the forecasted reading of 56.0 and was the lowest reading since February 1992. This indicates that consumers are much less optimistic about their own financial situations than many had thought. That is considered good news for bonds and mortgage rates because the falling confidence usually means consumers are less apt to make large purchases in the near future. With consumer spending making up two-thirds of the U.S. economy, any related data often has a big impact on the markets.

The only important release scheduled for tomorrow 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 no change new orders from April to May. A decline in new orders would be the ideal scenario for the bond market and could lead to a decline in mortgage pricing tomorrow morning. However, tomorrow afternoon’s events will probably influence rates much more than the day’s data will.

There are two housing related reports scheduled for release this week, with the first coming tomorrow morning. May’s New Home Sales will be released tomorrow while Existing Home Sales will be posted Thursday morning. These reports give us a measurement of housing sector strength and mortgage credit demand, but usually do not cause much movement in mortgage rates.

The FOMC meeting that began today will adjourn tomorrow 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, 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 tomorrow afternoon. I suspect we will hear concerns about inflation that will lead to selling in bonds that will drive mortgage rates 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… 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.

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 this week. 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 important report of the week with the release of June’s Consumer Confidence Index (CCI). The CCI is very important to the financial markets because it measures consumer willingness to spend, which is important because consumer spending makes up two-thirds of the U.S. economy. If it shows an increase in confidence from last month, we can expect to see the bond market falter and mortgage rates rise slightly. Current forecasts are calling for a reading 57.0, down slightly from last month’s 57.2 reading.

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 no change new orders from April to May. A decline in new orders would be the ideal scenario for the bond market and could lead to a decline in mortgage pricing Wednesday.

There are two housing related reports scheduled for release this week, but neither is likely to cause any movement in mortgage rates. May’s New Home Sales will be released Wednesday morning while Existing Home Sales will be posted Thursday morning. These reports give us a measurement of housing sector strength and mortgage credit demand, but usually do not cause much movement in mortgage rates.

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, 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. I suspect we will hear concerns about inflation that will lead to selling in bonds.

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 0.9% rate of growth, but analysts are expecting to see an upward revision to 1.0%.

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 0.4% in income and a 0.7% rise in the spending portion of the report. Smaller than expected increases should be good news for the bond market and mortgage rates.

Overall, tomorrow will likely be the quietest day of the week. The most active should be Tuesday or Wednesday to the importance of the data and FOMC meeting. Wednesday’s Durable Goods Orders could also help make it a busy day. 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…. 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.

Thursday’s bond market has opened down sharply as concerns about inflation take their toll. The stock markets are showing moderate gains with the Dow up 37 points and the Nasdaq up 14 points. The bond market is currently down 27/32, which will likely push this morning’s mortgage rates higher by approximately .250 – .375 of a discount point.

The Labor Department gave us today’s only economic reading with the release of weekly unemployment figures. They reported that 365,000 new claims for benefits were filed last week. This was down from the previous week and lower than the 372,000 that were expected. However, this data is not considered to be of high importance and had a minimal impact on today’s bond trading or mortgage rates.

Yesterday’s release of the minutes from the last FOMC meeting led to some volatility in the markets late yesterday and again this morning. The minutes revealed that the vote for the last rate cut was close and that ther e are obvious concerns not only about economic growth and activity but also about inflation. This has made long-term securities such as mortgage related bonds less attractive to investors because inflation erodes the value of a bond’s future fixed interest payments. Traders then need to sell them at a discount to offset that loss in order for an investor to purchase it. The result is bond prices falling while yields and mortgage rates rise.

The National Association of Realtors will give us the Existing Home Sales report tomorrow morning. This data tracks resales of homes in the U.S., giving us a measurement of housing sector strength. It is not considered to be of much importance to the bond market unless it varies greatly from forecasts. Current forecasts are calling for a decline in sales between March and April.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing w as 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.

Wednesday’s bond market has opened in negative territory as investors prepare for today’s FOMC minutes. The stock markets are posting another round of losses with the Dow down 97 points and the Nasdaq down 8 points. The bond market is currently down 9/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

There was no relevant economic news posted today. The only relevant news we really need to worry about are the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about what the Fed’s next move will be. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.

Tomorrow brings us no relevant economic data except for weekly unemployment claims from the Labor Department. T hey are expected to report that 372,000 new claims for benefits were filed last week. However, since this data tracks only a week’s worth of numbers, it likely will not influence mortgage rates unless it varies greatly from forecasts.

I would not be surprised to see stock prices continue to fall over the next few days. They seem to be reacting to high oil prices. If this is true, we should see funds shift into bonds as a safe haven, leading to improvements in mortgage rates. Accordingly, I am holding the float recommendations for short and longer periods for the time being.

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 o nly an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tuesday’s bond market has opened in positive despite stronger than expected inflation news. The stock markets are showing significant losses with the Dow down 179 points and the Nasdaq down 30 points. The bond market is currently up 8/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

The Labor Department gave us April’s Producer Price Index (PPI) this morning, showing a 0.2% increase in the overall reading. That was below the 0.4% that was forecasted. However, the bad news came in the more important core reading that showed a 0.4% increase compared to the 0.2% that was expected. This means that excluding more volatile food and energy prices, inflationary pressures were much stronger at the producer level than analysts had thought. That is a negative for bonds because those price increases will likely trickle down to the consumer level of the economy eventually.

Tomorrow’s only news is the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about what the Fed’s next move will be. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.

I would not be surprised to see stock prices continue to fall over the next few days. They seem to be reacting to high oil prices. If this is true, we should see funds shift into bonds as a sage haven, leading to improvements in mortgage rates. Accordingly, I am holding the float recommendations for the time being.

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 pl ace 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.

This week brings us the release of only three pieces of economic news in addition to the minutes from the last FOMC meeting. Only one of those three can be considered of high importance to the markets and mortgage rates, so we may see a fairly calm week for mortgage rates.

The first data comes tomorrow morning with the release of April’s Leading Economic Indicators (LEI) at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show no change from March’s reading, meaning that economic activity is likely to remain flat during the next few months. A decline would be good news for the bond market and mortgage rates, while an increase could cause mortgage rates to inch higher tomorrow.

The second report of the week April’s Producer Price Index (PPI) Tuesday morning, which helps us measure inflationary pressures at the producer level of the economy. If this report reveals weaker than expected readings, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.4%, while the core data that excludes food and energy prices is expected to rise 0.2%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.

There is no relevant economic news scheduled for release Wednesday, but we will get to see the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about what the Fed’s next move will be. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.

The National Association of Realtors will give us the Existing Home Sales report Friday morning. This data tracks resales of homes in the U.S., giving us a measurement of housing sector strength. However, it is not considered to be of much importance to the bond market unless it varies greatly from forecasts. Current forecasts are calling for decline in sales between March and April.

Overall, it may be an interesting week for mortgage rates. We could see little movement in rates if the stock markets remain calm and the week’s data doesn’t reveal any major surprises. Tuesday’s PPI report is the single most important data of the week, but the FOMC minutes may also lead to some volatility in the markets. Also worth noting is an early close in the bond market Friday afternoon ahead of the Memorial Day Holiday Monday. These early closes sometimes lead to additional volatility bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early.

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.

Wednesday’s bond market has opened up slightly after this morning’s economic data failed to give us any surprises. The stock markets are posting gains with the Dow up 98 points and the Nasdaq up 14 points. The bond market is currently up 3/32, which will likely keep this morning’s mortgage rates close to yesterday’s levels.

Today’s big report was the initial reading to the 1st Quarter Gross Domestic Product (GDP). It showed that the economy grew at a 0.6% annual pace. This was slightly stronger than expected, but not enough to create concern in bonds. Offsetting that reading was a key inflation reading in the data that came in lower than expected. The result was this report having little impact on today’s bond market or mortgage rates.

The second report posted this morning was the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. It revealed a 0.7% increase that was slightly weaker than expected. This is good news for bonds and mortgage rates, however, traders seem to be waiting for this afternoon’s events before making any adjustments to their holdings.

This week’s FOMC meeting will adjourn 2:15 PM ET this afternoon. It is expected to yield a quarter point cut to key short-term interest rates. Assuming the Fed does make that move, the post meeting statement will be watched closely for any indication of the Fed’s next move, or a lack of one. There is some debate about whether the Fed will continue to cut rates or if they will go into a holding pattern due to concern about inflation.

I suspect that the post meeting statement is going to have some verbiage about inflation that will cause concern in the bond market. Accordingly, I am shifting to a lock recommendation for immediate and short-term periods. But, if this is a false alarm, I will be shifting back to a float recommendation this afternoon. Look for an update to this report shortly after the markets have a chance to react to the FOMC meeting results.

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.

Tuesday’s bond market has opened in positive territory despite a stronger than expected economic reading. The stock markets are showing early losses with the Dow down 50 points and the Nasdaq down 9 points. The bond market is currently up 10/32, which with yesterday’s late strength should improve this morning’s mortgage rates by approximately .250 – .375 of a discount point.

The Conference Board gave us April’s Consumer Confidence Index (CCI) late this morning, revealing a stronger than expected reading of 62.3. However, an upward revision to March’s reading has actually worked favorably for bonds. The difference between forecasts and the previous March reading is extremely close to the difference between today’s reading and the revised March reading. This means that even though confidence was a little higher than thought in March, it dropped as much as it was expected to in April. The result is little impact on bond trading or mortgage rates.

Tomorrow is going to be a very interesting day as brings us the release of two important reports along with the FOMC meeting results. The first is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets tomorrow and therefore the mortgage market also. Analysts are expecting to see output at an annual rate of 0.5%. A smaller increase would be ideal for mortgage rates a sit would fuel recession concerns. But, a larger increase would almost certainly cause inflation concerns in the bond market that would push mortgage rates higher tomorrow morning.

The next report of the day is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we may see inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.8%.

This week’s FOMC meeting will began today but will not adjourn until tomorrow afternoon. It will likely adjourn with an announcement of another rate cut to key short term interest rates. Just how much of a reduction is open for debate. Look for another round of volatility following the 2:15 PM ET post-meeting statement.

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 onl y 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.

Monday’s bond market has opened flat as investors await this week’s economic news and events. The stock markets are following suit with the Dow down a few points and the Nasdaq up 1 point. The bond market is currently nearly unchanged from Friday’s close, so we should see little change in this morning’s mortgage rates.

This week is packed with relevant pieces of economic news in addition to another FOMC meeting. All seven of the reports are considered to be at least moderately important while several are considered very important to the markets and mortgage rates. This makes it likely that we will see plenty of movement in mortgage pricing over the next several days.

The first report comes late tomorrow morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial si tuations. If sentiment is strong or rising, it is believed that consumers are more apt to continue to spend. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would ease inflation concerns. But, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday. It is expected to show a reading of 61.0, which would be a decline from March’s 64.5 reading.

Wednesday brings us the release of two important reports along with the FOMC meeting results. The first is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect t his report to cause major movement in the financial markets Wednesday and therefore the mortgage market also. Analysts are expecting to see output at an annual rate of 0.4%. A smaller increase would be ideal for mortgage rates a sit would fuel recession concerns. But, a larger increase would almost certainly cause inflation concerns in the bond market that would push mortgage rates higher Wednesday morning.

The next report of the day is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we may see inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.8%.

This week’s FOMC meeting will begin tomorrow but will not adjourn until Wednesday afternoon. It will likely adjourn with an announcement of another rate cut to key short term interest rates. Just how much of a reduction is open for debate. Look for another round of volatility following the 2:15 PM ET post-meeting statement.

Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday or Friday will likely be the most important day of the week with the GDP and Employment numbers being posted along with the FOMC adjournment, but we may see noticeable changes to rates tomorrow also. If this week’s reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.

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 plac e 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.

This week is packed with relevant pieces of economic news in addition to another FOMC meeting. All seven of the reports are considered to be at least moderately important while several are considered very important to the markets and mortgage rates. This makes it likely that we will see plenty of movement in mortgage pricing over the next several days.

The first report comes late Tuesday morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to continue to spend. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in sp ending would ease inflation concerns. But, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday. It is expected to show a reading of 62.0, which would be a decline from March’s 64.5 reading.

Wednesday brings us the release of two important reports along with the FOMC meeting. The first is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets Wednesday and therefore the mortgage market also. Analysts are expecting to see output at an annual rate of 0.4%. A smaller increase would be ideal for mortgage rates a sit would fuel recession concerns. But, a larger increase would almost certainly cause inflation concerns in the b ond market that would push mortgage rates higher Wednesday morning.

The next report of the day is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we may see inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.8%.

This week’s FOMC meeting will begin on Tuesday but will not adjourn until Wednesday afternoon. It will likely adjourn with an announcement of another rate cut to key short term interest rates. Just how much of a reduction is open for debate. Look for another round of volatility following the 2:15 PM ET post-meeting statement.

March’s Personal Income & Outlays is the first of two reports due to be posted Thur sday morning. This data helps us measure consumers’ ability to spend and current spending habits, which is important to the mortgage market due to the influence that consumer spending related information has on the financial markets. If a consumer’s income is rising, they are more likely to make additional purchases. This raises inflation concerns and has a negative affect on the bond market and mortgage rates. Current forecasts are calling for a 0.4% increase in income and a 0.2% rise in spending.

The Institute for Supply Management (ISM) will post their manufacturing index late Thursday morning. This is one of the first important economic reports released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. But , if we see a drop from last month’s reading of 48.6, the bond market should thrive and mortgage rates will probably fall. It is expected to show a reading of 48.0.

The week’s most important release is being saved for nearly last. The almighty Employment report will be released Friday at 8:30AM, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be an increase in the unemployment rate and fewer than expected new payrolls. Just how much of an improvement or worsening depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for a 5.2% unemployment ra te and approximately 80,000 jobs lost during the month.

Friday’s second report and the last of the week is March’s Factory Orders data at 10:00AM. This is a fairly important release because it measures manufacturing sector strength. It is similar to last week’s Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report usually has more of an impact on the financial markets than the Factory Orders report does. Still, a smaller increase than the 0.4% that is expected could push mortgage rates slightly lower, while a larger increase will likely lead to higher rates. But, the employment numbers are of much more importance to the markets than this data is.

Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday or Friday will likely be the most important day of the week with the GDP and Employment numbers being posted along with the FOMC adjournment, but we may see noticeable changes to rates Tuesday also. If this week’s reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.

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 down slightly despite early stock losses and a weaker than expected consumer sentiment reading. The stock markets are reacting to earnings news with the Dow down 87 points and the Nasdaq down 30 points. The bond market is currently down 4/32, which should push this morning’s mortgage rates higher by approximately .125 of a discount point.

Today’s only economic data was the University of Michigan’s update to their Index of Consumer Sentiment for April. It showed a reading of 62.6 that was lower than forecasts. This is considered good news for bonds since it indicates consumers may be less apt to spend than previously thought, but since it is a revision it is considered only moderately important to the markets.

I am expecting a fairly quiet day in the bond market and mortgage rates. If any revisions were to come today, they would most likely be as a result of further stock weakness or a rebound in the stock indexe s. As long as they remain near their current levels, we should see mortgage rates follow suit the rest of the day.

Next week is extremely busy in terms of economic releases and related events. Monday is the only day of the week that there is not important economic data scheduled for release. We also have another FOMC meeting on the calendar, meaning we will see plenty of volatility in the markets next week. Look for more 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… 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.

©Mortgage Commentary 2008