Daily Mortgage Rate Lock Advisory

Daily Mortgage Rate Lock Advisory – Monday Nov. 24th

Rate Lock Advisory – Monday Nov. 24th

Monday’s bond market has opened well into negative territory as investor interest turns back towards stocks. The stock markets are posting strong gains during morning trading with the Dow up 289 points and the Nasdaq up 52 points. The bond market is currently down 14/32, which will likely push this morning’s mortgage rates up slightly from Friday’s levels.

The National Association of Realtors reported this morning that home resales in the U.S. fell more than analysts had expected last month. This is fairly good news for bonds but since this data is not considered to be of high importance it has had little impact on today’s rates.

The first important data of the week comes early tomorrow morning when we will get the first revision to the 3rd Quarter Gross Domestic Product (GDP) reading. The GDP revision is expected to show a downward revision from last month’s preliminary reading of -0.3%. Current forecasts call for a reading of approximately -0.6 %, meaning that there was less economic growth during the third quarter than previously thought. This would be good news for the bond market and mortgage rates.

Late tomorrow morning, November’s Consumer Confidence Index (CCI) will be posted. The Conference Board will release the CCI for the month of November at 10:00 AM ET, giving us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This raises inflation concerns and usually pushes mortgage rates higher. Analysts are expecting a small increase from last month’s 38.0 reading to somewhere around 39.5. A weaker than expected reading should be good news for mortgage rates, but a stronger than expected reading could push mortgage rates higher tomorrow.

Overall, I believe that it is going to be an active week for the mortgage market. Today or Friday will be the least i mportant day of the week and either tomorrow or Wednesday will be the most important. The bond market will close early Wednesday and remain closed Thursday in observance of the Thanksgiving Day holiday. I still expect to see plenty of movement in rates the remaining days, so please be careful and maintain contact with your mortgage professional if you have not locked an interest rate yet.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… 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: association of realtors, bond, closing, consumer confidence index, consumer confidence index cci, downward revision, home resales, inflation concerns, investor interest, mortgage market, national association of realtors, negative territory, tomorrow, U.S.

Rate Lock Advisory – Monday Sep. 8th

Monday’s bond market has opened down slightly following strong gains in stocks. The stock markets are rallying as the news of the government’s takeover of Fannie Mae and Freddie Mac is being taken as positive for the markets. Also contributing to early stock gains were rallies in international markets overnight. The bond market is currently down 7/32 as investor interest has turned towards stocks. However, due to strength in bonds Friday and reassurances by the Fed that Fannie and Freddie have enough funds to conduct business, we should see mortgage rates improve this morning by .250 – .375 of a discount point. 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 r eport 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. 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 recommendations. 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 data, bond, bond prices, bond trading, closing, fannie mae, fannie mae and freddie mac, Freddie, freddie mac, investor interest, lackluster interest, mortgage rates, Release, stock, stock gains, U.S., week

Daily Rate Lock Recommendation – 06/26/2008 11:41:00 AM EST

Thursday’s bond market has opened in positive territory as stock prices are showing significant losses during early trading. The stock markets are reacting to downgrades and fears of future problems in the banking sector. This has led to the Dow dropping 214 points and the Nasdaq falling 59 points. The bond market is the benefactor as investors seek safe haven from the volatility. With the bond market currently up 8/32, we will likely see an improvement in mortgage rates of approximately .125 – .250 of a discount point. There were a couple of pieces of economic data released this morning, but none are considered to be of high importance. The final reading to the 2nd quarter GDP matched forecasts at up 1.0%. This was slightly higher than the previous estimate that was announced last month. An important inflation component of the data also was revised higher by 0.1%, but has not impacted bond trading or mortgage rates. The National Association o f Realtors released May’s Existing Home Sales report that tracks home resales in the U.S. It showed an increase in sales compared to April’s numbers, but this data usually is of low importance to the markets and mortgage rates. The Labor Department gave us weekly unemployment figures from last week, saying that new claims for benefits rose to 384,000, when analysts were expecting to see a drop in claims. This brings the total back near the important benchmark of 400,000. However, this data also usually has little influence on mortgage rates. But, if the number of claims continues to move higher, this release will likely be watched more closely. Also worth noting is today’s 5-year Treasury Note auction. This sale can affect bond prices and therefore mortgage rates if investor interest in the sales are met with a strong or poor demand. The results will be posted at 1:00 PM ET today. If demand was strong, we should see bond prices improve during afte rnoon trading. However, a lackluster interest in the sale could lead to bond weakness later today and possibly higher mortgage rates. May’s Personal Income and Outlays data will be posted early tomorrow 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. 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.

Tags: bond, bond prices, bond trading, closing, existing home sales, existing home sales report, home resales, inflation component, investor interest, lock, mortgage rates, quarter gdp, today, trading, U.S. It, unemployment figures

Daily Rate Lock Recommendation – 05/29/2008 11:47:00 AM EST

Thursday’s bond market has opened in negative territory as investor interest appears to be shifting towards stocks and non-mortgage related securities. The stock markets are showing gains with the Dow up 47 points and the Nasdaq up 14 points. The bond market is currently down 23/32, which will likely push this morning’s mortgage rates higher by approximately .500 of a discount point.

There were two pieces of economic data released this morning. The first was the preliminary revision to the 1st quarter Gross Domestic Product (GDP). It matched forecasts with a 0.9% annual pace of growth that was an upward revision from the initial estimate. An important inflation reading in the data also matched forecasts, so today’s report didn’t reveal any surprises.

The Labor Department gave us last week’s unemployment figures, saying that 372,000 new claims for benefits were filed during the week. This was slightly above the 370,000 that was expected, so had little impact on bond trading or mortgage rates because this data is generally of low importance to the markets unless it varies greatly from forecasts.

Tomorrow brings us the release of two pieces of data with the first being April’s Personal Income and Outlays data at 8:30 AM. This report gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.2% rise in income and a 0.2% increase in spending. Weaker readings would be considered good news for bonds and mortgage rates.

The last report of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. It measures consumer willingness to spend by tracking their confidence in their own f inancial situations. An upward revision from the preliminary 59.5 reading would be considered a negative for bonds.

Yesterday’s bond weakness that has carried over into this morning’s trading pretty much answers the question proposed yesterday if 4.00% is going to be a level of upward resistance. There seemed to be very little resistance as bond prices dropped over the past 24 hours and the yield on the benchmark 10-year Note shot up to 4.10%. I suspect that this may now be the lower end of a new trading range if this level holds for another day. That means that bond prices are more likely to fall than they are to rise, leading to upward movement in yields and mortgage rates. Accordingly, I am holding the lock recommendations across the board until we have stability below that level.

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.

Tags: bond, bond market, bond trading, closing, index of consumer sentiment, initial estimate, investor interest, lock, negative territory, report, spending habits, stock markets, U.S., unemployment figures, upward revision, week