Daily Mortgage Rate Lock Advisory

Rate Lock Advisory – Thursday Mar. 19th

Thursday’s bond market has opened in positive territory this morning as yesterday’s afternoon news has continued into this morning’s trading. The stock markets are not boding so well with the Dow down 37 points and the Nasdaq down 3 points. The bond market is currently up 7/32, which will likely keep mortgage rates near yesterday’s afternoon pricing. Overall, this morning’s rates should be approximately .625 of a discount point lower than yesterday’s morning rates. This equates to an improvement of a little more than .125 of a percent in rate.

Today’s economic data did not heavily influence trading or mortgage rates. The Labor Department gave us weekly unemployment claim figures, saying that 646,000 new claims for benefits were filed last week. This was a little lower than expected, but offsetting that number was news that the number of continuing claims reached a record number. Generally speaking, this data is not considered to be of high importance to the markets, so its impact on rates is usually limited.

The second piece of news was February’s Leading Economic Indicators (LEI). The Conference Board reported that the index fell 0.4% last month, which was stronger than the 0.6% decline that was expected. However, they also revised January’s reading weaker by 0.3%, effectively making this morning’s results a non-factor in the markets. But it does indicate that economic conditions are expected to weaken moderately over the next several months and that is favorable for bonds.

There is no relevant economic news scheduled for release tomorrow. I would not be surprised to see the bond market give back a little of this week’s gains as the markets stabilize. This could lead to a small increase in mortgage rates if true. Therefore, we may want to consider locking an interest rate if closing in the immediate future. The longer-term out look is still quite favorable for mortgage shoppers in my opinion t hough.

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

Rate Lock Advisory – Thursday Mar. 12th

Thursday’s bond market has opened flat despite early stock gains and stronger than expected economic news. The Dow is currently up 99 points while the Nasdaq is up 14 points. The bond market is currently up 2/32, but we will likely see an improvement in this morning’s mortgage rates of approximately .375 of a discount point due to strength in bonds late yesterday.

The Commerce Department posted February’s Retail Sales data this morning, revealing a 0.1% decline in sales. This was stronger than the 0.4% that was expected. Today’s release also revised January’s sales figures higher 0.8%, meaning that sales at the retail level of the economy were stronger than expected the past two months. That is considered to be bad news for the bond market and mortgage rates, but the market seems to be shrugging off the data.

Also this morning, the Labor Department announced that 654,000 new claims for benefits were filed last week. This was a little higher than expected, but this weekly report usually does not carry much influence on the markets and mortgage rates unless it varies greatly from forecasts.

The 30-year Bond auction is being held today. Results will be posted at 1:00 PM, as yesterday’s 10-year Note sale. Yesterday’s sale was met with a strong demand from investors, which helped rally bonds during afternoon trading. The 10-year Note is more relevant to mortgage rates than the 30-year Bond, but a weak or strong sale today can lead to selling to selling or buying of bonds on a broader scale. So, if we get another strong interest in the sale, we may see bonds rally again this afternoon.

There are two economic reports scheduled to be posted tomorrow morning. The first is the release of January’s Goods and Services Trade Balance. This report gives us the size of the U.S. trade deficit. It is the week’s least important piece of news and likely will not influence mortgage rates much. It is expecte d to show a trade deficit of $38.2 billion.

The second report of the morning is the University of Michigan’s Index of Consumer Sentiment for March 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 hurt the stock markets and boost bond prices, leading to lower mortgage rates. If the index rises, indicating that confidence is rising and spending will likely rise, we may see mortgage rates move higher late tomorrow morning. It is expected to show a reading of 56.3.

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

Rate Lock Advisory – Thursday Mar. 5th

Thursday’s bond market has opened strong following early stock weakness. The major stock indexes are showing significant losses after yesterday’s rally. The Dow is currently down 230 points while the Nasdaq is down 42 points. The bond market is currently up 34/32, but we will likely see an improvement in this morning’s mortgage rates of only .125 – .250 of a discount point.

This morning’s economic news gave us results that were not favorable to bonds and mortgage rates. The Productivity revision revealed a much lower level of worker output than was expected. Today’s report showed a decline in output of 0.4% compared to the increase of 1.0% that was forecasted and the 3.2% gain that was estimated last month. It also showed a significant upward revision to the Unit Labor Costs portion of the report that raises wage inflation concerns. Even though this report is of medium importance to the markets, the revised readings are somewhat surprising.

The second report of the morning wasn’t much better either. The Commerce Department reported that Factory Orders fell 1.9% in January. This was stronger than analysts’ revised forecasts of a 3.5% decline, but today’s reports also revised December’s orders lower by 1.0%. That seemed to have offset the higher than expected reading, but this report is also considered to be of medium importance so its impact has been relatively minimal.

The Labor Department reported that 639,000 new claims for benefits were filed last week. This was lower than expected and a decline from the previous week’s total.

Tomorrow morning brings us February’s Employment report at 8:30 AM ET tomorrow. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a large drop in pa yrolls and little or no increase in earnings. Current forecasts are calling for 0.3% increase in the unemployment rate to 7.9% and approximately 650,000 jobs lost during the month.

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.

Rate Lock Advisory – Thursday Jan. 8th

Thursday’s bond market has opened in positive territory following early weakness in stocks. The stock markets are showing losses during morning trading again that have helped keep bonds in positive ground. The Dow is currently down 86 points while the Nasdaq has lost 2 points. The bond market is currently up 6/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

Today’s only economic news was weekly unemployment claims from the Labor Department. They reported this morning that 467,000 new claims for benefits were filed last week. This was much lower than the 550,000 that was expected and a decline from the previous week’s 491,000. Fortunately for the bond market and mortgage pricing, this data is not considered to be of high importance to the markets because it tracks a single week’s worth of claims. But, it does create some concern about what tomorrow’s monthly report will reveal.

The final re port of the week comes early tomorrow 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 500,000 with earnings rising 0.2%. If we see weaker than expected results, mortgage rates should improve tomorrow. 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.

Rate Lock Advisory – Thursday Dec. 18th

Thursday’s bond market has opened in positive territory despite slightly stronger than expected economic news. The stock markets have fluctuated between positive and negative ground during early trading, but are fairly flat at this point with the Dow down 28 points and the Nasdaq nearly unchanged. The bond market is currently up 20/32, however, we will still see an increase in this morning’s mortgage rates as a result of weakness late yesterday. After peaking during afternoon trading, bonds closed well off their earlier highs. This led some lenders to revise rates higher yesterday, but many waited to reflect those changes in this morning’s pricing.

The Labor Department reported that 554,000 new claims for benefits were filed last week. This was a decline from the previous week’s 575,000 initial claims, but was pretty close to forecasts. Therefore, the news has had a minimal impact on bond trading and mortgage rates.

The Conference Board gave us their Leading Economic Indicators (LEI) for the month of November late this morning. They reported a decline of 0.4% that was slightly stronger than the 0.5% drop that was expected. This means that economic activity may slow over the next three to six months, but at a slightly slower pace than many had thought.

There is no relevant economic news scheduled for release tomorrow, so look for the stock markets to drive bond trading and mortgage rates. I am still concerned about further increases in mortgage rates from their recent lows, so please proceed cautiously if still floating a 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… 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 h ome. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Rate Lock Advisory – Wednesday Dec. 17th

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.

Rate Lock Advisory – Thursday Dec. 4th

Thursday’s bond market has opened in positive territory following the release of weaker than expected economic news and a lackluster open in stocks. The stock markets are currently mixed with the Dow down 15 points and the Nasdaq up 6 points. The bond market is currently up 8/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.

The Commerce Department said late this morning that October’s Factory Orders fell 5.1%. This was the third consecutive month of a decline in new orders and a larger drop than analysts had expected. Forecasts were calling for a drop of 4.5% in orders, meaning that the manufacturing sector was weaker than thought. While this is good news for the bond market and mortgage rates, this data is no considered to be of high importance so its impact on trading and mortgage pricing was fairly minimal.

Earlier this morning, the Labor Department gave us last week’s weekly unemployment claim figures. They reported a drop in new claims, pegging the total at 509,000 compared to forecasts of 540,000 new claims. But, since this data tracks only a week’s worth of new claims, it is also not considered to be of high importance to the markets.

The Labor Department will also post November’s Employment report early tomorrow morning. This is arguably the most important monthly report we see. It is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for another upward change in the unemployment rate to 6.8%, payrolls down approximately 325,000 and an increase of 0.2% in average earnings. An ideal scenario for mortgage shoppers would be a higher unemployment rate than 6.8%, a larger decline in jobs and no change in the earnings portion.

Regardless of its results, look for tomorrow morning’s r eport to cause a fair amount of volatility in the markets and mortgage rates, especially if they vary much 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… 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.

Rate Lock Advisory – Wednesday Oct. 22nd

Wednesday’s bond market has opened in positive territory as investors continue to dump stocks this morning. The stock markets showing significant losses with the Dow currently down 324 points and the Nasdaq down 36 points. The bond market is currently up 10/32, which should improve this morning’s mortgage rates by another .125 to .250 of a discount point.

There is no relevant economic data scheduled for release today, therefore the bond market is relying on stocks for direction. With stocks still falling, investors are eyeing bonds as a parking space for funds, at least temporarily. This has benefited mortgage rates this week, however, I don’t see that as a situation that will likely last long. Accordingly, I am shifting to a lock recommendation for immediate and short-term closings.

The only data scheduled for release tomorrow is weekly unemployment claims from the Labor Department. Analysts are expecting to see that 465,000 new claims were filed last week. This would be a slight increase from the previous week and would basically be good news for the bond market and mortgage rates. But, since this data tracks only a week’s worth of claims, its influence on the markets is usually limited unless it varies greatly from forecasts.

The only other data scheduled for release this week is September’s Existing Home Sales Friday morning. This report gives us an indication of housing sector strength and mortgage credit demand. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.

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

Rate Lock Advisory – Thursday Oct. 9th

Thursday’s bond market has opened down sharply despite a lackluster opening in stocks. The stock markets are mixed with the Dow down 16 points and the Nasdaq up 20 points. The bond market is currently down 33/32, which will likely push this morning’s mortgage rates higher by approximately .375 – .500 of a discount point.

The markets still seem to be lost and unable to gain and solid traction. I am surprised that bonds are taking as much of a beating today as they are, especially with no solid gains in stocks. However, this could mean some traders feel the bottom is near for the stock markets and that funds are likely to shift back into stocks very soon. Accordingly, we may want to consider locking a rate is still floating and if closing in the immediate future.

There was no monthly or quarterly economic news released today. The only data posted was weekly unemployment figures from the Labor Department. They reported that 478,000 new claims for benefits were filed last week. This was a decline from the previous week’s 498,000 claims but was slightly higher than forecasts. But, since this data is not considered to be of high importance since it tracks only a week’s worth of claims, it has not been able to help bonds this morning.

August’s Goods and Services Trade Balance will be released early tomorrow, 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. It is expected to show a $59.0 billion trade deficit.

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

Rate Lock Advisory – Wednesday Sep. 17th

Wednesday’s bond market has opened in positive territory following significant losses in the stock markets. The Dow is currently down 281 points while the Nasdaq has lost 70 points. The bond market is currently up 9/32, but we will still see an extremely large increase in mortgage rates compared to yesterday’s. Overall, this morning’s rates should be approximately one full discount point higher, or a quarter of a percent in rate.

This morning’s stock weakness is a result of more concerning news in the financial sector, particularly the need for the Fed to intervene in the AIG crisis and other related issues. The stock markets managed to rally late yesterday after the Fed meeting adjourned, leading to selling in bonds that affected this morning’s mortgage pricing. Despite today’s stock weakness, the bond market cannot overcome its concerns nor erase the losses from yesterday that are helping to drive mortgage rates higher this morning.

Today’s only relevant economic news was the release of August’s Housing Starts that showed new starts for homes fell to a 17 year low last month. This was a level that was much weaker than analysts had expected. However, because this data is not considered to be of high importance to the markets, its impact on this morning’s mortgage rates has been limited.

The Labor Department will give us weekly unemployment claims tomorrow morning. They are expected to show that 440,000 new claims for benefits were filed last week. This would be a slight decline from the previous week.

Late tomorrow 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 f all. Current forecasts are calling for a 0.2% decline from July’s reading.

I am still expecting to see more volatility in the markets and potentially mortgage rates. Accordingly, please maintain fairly constant contact with your mortgage professional if you have not locked an interest rate yet.

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