Daily Mortgage Rate Lock Advisory

Daily Mortgage Rate Lock Advisory – Thursday June 18, 2009

Thursday’s bond market has opened in negative territory as yesterday’s afternoon weakness continues into this morning’s trading. The stock markets are showing gains with the Dow up 82 points and the Nasdaq up 2 points. The bond market is currently down 17/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point over yesterday’s morning rates.

The Labor Department reported early this morning that 608,000 new claims for unemployment benefits were filed last week. This was slightly higher than what analysts had expected, but not enough of a difference to have much influence on mortgage pricing.

The Conference Board gave us today’s second piece of news with the release of its Leading Economic Indicators (LEI) for May. It revealed a 1.2% increase that exceeded forecasts and points towards a sharp increase in economic activity over the next three to six months. This is bad news for bonds because strengthening economic activity makes bonds less appealing to investors and leads to higher mortgage rates.

Yesterday’s morning rally in bonds was short-lived as trading turned sour as the day went on. What looked like a potentially wonderful day for mortgage shoppers ended up being a bad day. A combination of a couple of factors led to the selling, including a weakening dollar that makes U.S. securities less valuable to international investors. The negative tone has carried into this morning’s trading and with no important economic data this afternoon or tomorrow to stop the selling, we may see mortgage rates revise higher this afternoon and possibly tomorrow.

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…

Tags: bond, closing, Float, international investors, leading economic indicators, LEI, morning rally, mortgage rates, mortgage shoppers, negative territory, negative tone, refinancing a home, trading, U.S., unemployment benefits, yesterday

Rate Lock Advisory – Wednesday Nov. 12th

Rate Lock Advisory – Wednesday Nov. 12th

Wednesday’s bond market has opened in positive territory as investors shift funds from stocks into bonds. This has pushed the stock indexes significantly lower again with the Dow down 312 points and the Nasdaq down 46 points. The bond market is currently up 14/32, which should improve this morning’s mortgage rates by approximately .125 – .250 of a discount point over Monday’s rates. The bond market was closed yesterday in observance of the Veteran’s Day holiday.

There is no relevant data being released today, but we will get the results of today’s 10-year Treasury Note auction at 1:00 PM ET. These results can influence bond trading enough to affect mortgage rates this afternoon. If the sale was met with a strong demand from investors, bonds will likely rally and mortgage rates should fall. However, a lackluster interest could lead to weakness in bonds and higher mortgage rates.

The first economic data of the week is September’s Goods and Service s Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. The two Treasury auctions that are of the most interest are today’s and Thursday’s since they can impact mortgage rates the most. But there is only one important report being posted and that doesn’t come until Friday morning.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… 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.

Tags: balance report, bond, bond trading, closing, domestic currency, international investors, lackluster interest, lock, mortgage market, mortgage rates, shift funds, stock indexes, today, treasury auctions, U.S., Wednesday

Rate Lock Advisory – Tuesday Nov. 11th

Rate Lock Advisory – Tuesday Nov. 11th

TUESDAY’S UPDATE:

The bond market is closed today in observance of the Veterans Day holiday and will reopen tomorrow morning. The stock markets are trading today but in negative territory. The Dow is currently down 240 points while the Nasdaq has lost 42 points. Some lenders may post rates today, but will likely use yesterday’s afternoon rates.

This week brings us the release of only three relevant economic reports with only one of them being considered highly important. There is no relevant news scheduled for release tomorrow except for the results of the 10-year Treasury Note auction. Results will be posted at 1:00 PM ET and can influence bond trading enough to affect mortgage rates. If the sale was met with a strong demand from investors, bonds will likely rally and mortgage rates should fall. However, a lackluster interest could lead to weakness and higher mortgage rates.

The first economic data of the week is September’s Goods and Services Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. The two Treasury auctions that are of the most interest are Wednesday’s and Thursday’s since they can impact mortgage rates the most. But there is only one important report being posted and that doesn’t come until Friday morning.

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

Tags: auction results, balance report, bond, closing, domestic currency, international investors, lackluster interest, lock, mortgage market, mortgage rates, release tomorrow, today, treasury auctions, Tuesday, U.S., veterans day holiday, week

Rate Lock Advisory – Monday Nov. 10th

Rate Lock Advisory – Monday Nov. 10th

Monday’s bond market has opened down slightly following early stock gains. The stock markets have started the week in positive territory with the Dow up 54 points and the Nasdaq up 3 points. The bond market is currently down 2/32, which will likely keep this morning’s mortgage rates at Friday’s levels.

This week brings us the release of only three relevant economic reports with only one of them being considered highly important. It is a holiday shortened week with the bond market closing at 2:00 PM today and remaining closed tomorrow in observance of the Veterans Day holiday. I am not expecting this early close to impact bond trading enough to affect mortgage pricing.

The first data of the week is September’s Goods and Services Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which m akes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. As long as the stock markets remain fairly calm, I am expecting to see mortgage rates follow suit. The two Treasury auctions that are of the most interest are Wednesday’s and Thursday’s since they can impact mortgage rates the most. With only one important report being posted and that doesn’t come until Friday morning, I am expecting the bond market and mortgage rates to step back and take a breath per se, most likely until Friday’s data.

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

Tags: balance report, bond, bond trading, closing, domestic currency, economic reports, international investors, lock, mortgage market, refinancing a home, stock, stock gains, treasury auctions, U.S., veterans day holiday, week

Rate Lock Advisory – Sunday Nov. 9th

Rate Lock Advisory – Sunday Nov. 9th

This week brings us the release of only three relevant economic reports with only one of them being considered highly important. It is a holiday shortened week with the bond market closing early Monday and remaining closed Tuesday in observance of the Veterans Day holiday.

The first data of the week is September’s Goods and Services Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

There are two reports scheduled for release Friday. October’s Retail Sales report is the first. This report is very important to the financial markets because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely. If this report reveals weaker than expected sales, the bond market should thrive and mortgage rates will fall. Current forecasts are calling for a drop in sales of approximately 1.2%.

The last of the week’s three reports comes late Friday morning when November’s preliminary reading of the University of Michigan’s Index of Consumer Sentiment will be released. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 57.0, down from October’s final reading of 57.6.

There are 10-year Note and 30-year Bond auctions this week, Wednesday and Thursday respectively. Strong or very weak results from these sales could affect the momentum in the bond market and lead to afternoon changes in mortgage rates. It i s common to see pressure in bonds ahead of these sales, but as long as interest from investors is decent we should see those pre-sale losses recovered during afternoon trading of the sale days.

Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. As long as the stock markets remain fairly calm, I am expecting to see mortgage rates follow suit.

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.

Tags: balance report, bond, bond auctions, closing, consumer confidence, domestic currency, economic reports, index measures, index of consumer sentiment, international investors, lock, mortgage rates, report, U.S., veterans day holiday, week

Rate Lock Advisory – Sunday Sep. 7th

This week brings us the release of four pieces of economic data, with three of them likely to affect mortgage rates. There is no relevant data scheduled for release until Thursday and the most important reports are all scheduled for release Friday. Therefore, look for the biggest changes to rates the latter part of the week. The first report of the week is not considered to be of high importance. July’s Goods and Services Trade Balance data will be posted Thursday morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $58.0 billion, which would be an increase from June’s $56.8 billion. However, I would consider this the least important of this week’s releases, meaning it will likely have little impact on bond trading or mortgage rates. Also worth noting is the 10-year Treasury Note auction Thursday. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. But, if the sales are met with a decent demand from investors, those losses are normally recovered after the results are announced. The results will be posted at 1:00 pm ET Thursday. If demand was strong, particularly from international investors, we should see mortgage rates improve Thursday afternoon.   Friday brings us the release of three pieces of relevant data. The first is the release of August’s Retail Sales report. It will give us a measurement of consumer spending, which is very important to the markets because consumer spending makes up two-thirds of the U.S. economy. Current forecasts are calling for a 0.1% increase in sales. If we see a higher level of spending than is forecasted, the bond market will most likely fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower Friday. The second important piece of data Friday morning is the release of Augus t’s Producer Price Index (PPI). This report will give us a very important measurement of inflationary pressures at the producer level of the economy. There are two readings that analysts follow in this release. They are the overall index and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Analysts are currently calling for a 0.3% decline in the overall index, and a rise of 0.2% in the core data. Stronger than expected readings could fuel inflation concerns in the bond market and lead to an increase in mortgage rates Friday morning.   The last report of the week comes from the University of Michigan. Their consumer sentiment index will give us an indication of consumer confidence, which hints at consumers’ willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial si tuations, they probably will delay making that large purchase. This influences future consumer spending data and can impact the financial markets. It is expected to show a reading of 63.9. Overall, the latter part of the week will likely be pretty active for the bond market and mortgage rates. Friday’s Retail Sales and PPI reports are the week’s most important and make Friday the biggest day of the week. If we see weaker than expected readings in that data, we should see mortgage rates move lower for the week. However, stronger than expected readings will likely drive bond prices lower and mortgage rates higher. I am holding the float recommendations for now, but could change if there is a lackluster interest in the 10-year auction or if Friday’s data shows stronger than expected results. We may also see the stock markets significantly influence bond trading, so look for sizable movement in the major indexes to also lead to a possible change in recomme ndations. This weekend’s news about the Fed taking control of Fannie Mae and Freddie Mac will likely drive their stock prices lower and could affect the broader markets. That may start the week off with 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.

Tags: 10 year treasury, 10 year treasury note, augus, balance data, bond, bond prices, bond trading, Float, international investors, producer price index, producer price index ppi, Release, relevant data, spending, Thursday, U.S., week