Daily Mortgage Rate Lock Advisory

Daily Rate Lock Recommendation – 07/08/2008 11:59:00 AM EST

Tuesday’s bond market has opened relatively flat again as investors prepare for this week’s earnings releases. The stock markets are showing small gains with the Dow up 23 points and the Nasdaq up 7 points. The bond market is nearly unchanged from yesterday’s closing level, but we should see an improvement in this morning’s mortgage rates of approximately .250 of a discount point due to strength late yesterday. There is no relevant economic news scheduled for release today. I am expecting the stock markets to continue to be the biggest influence on bond trading the rest of the day. If the major stock indexes remain near current levels, mortgage rates will likely follow suit. However, if stocks continue to move higher, bonds may fall and we could see afternoon upward revisions to mortgage rates. But, if stocks move into negative territory, we may see mortgage rates improve later today. I am remaining on the cautious side, particularly in the sh ort-term outlooks. I think there is more likelihood of seeing bonds fall and mortgage rates move higher in the immediate future than there is of them improving much. Accordingly, I am holding the lock recommendations for immediate and short-term closings. This week brings us the release of only two economic reports for the bond market to digest. It also is the beginning of corporate earnings season. Those quarterly earnings reports can lead to significant volatility in the stock markets, which could influence bond trading and mortgage rates. The first piece of economic news that may affect mortgage rates is Thursday’s weekly unemployment figures from the Labor Department. Analysts will be paying a little more attention to this week’s release than usual because last week’s report showed that claims had crossed above 400,000 the previous week. This is an important benchmark that will be watched closely. Last week’s numbers didn’t get much attention be cause they were posted at the same time as June’s monthly Employment report. But with little data scheduled for release this week, I believe more focus will be made on Thursday’s report. Also worth mentioning are a couple of public speeches by Fed members including Fed Chairman Bernanke and a 10-year Treasury auction of inflation protected notes. The speeches will be watched closely for any possible hint of the Fed’s next move. The Treasury auction likely will not have an impact on rates, but could influence bond trading slightly if it is met with a strong or weak demand from investors. In a very light week of economic news such as this week is, events like these sometimes have a greater impact on the markets than if they took place during a busy week of news. 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 cl osing 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: bond, bond trading, cautious side, Chairman Bernanke, closing, corporate earnings, earnings season, major stock indexes, negative territory, quarterly earnings reports, Release, report, stock, stock markets, unemployment figures, upward revisions, week

Daily Rate Lock Recommendation – 06/27/2008 12:30:00 PM EST

Friday’s bond market has opened in positive territory as stock prices continue to fall. The major stock indexes are showing losses again as yesterday’s major sell-off seems to be carrying into today’s trading. The Dow is currently down 58 points while the Nasdaq has fallen 11 points. The bond market is currently up 12/32, pushing the yield on the benchmark 10-year Treasury Note below 4.00%. This should improve this morning’s mortgage rates by approximately .125 of a discount point. Today’s most important data was the release of May’s Personal Income and Outlays figures. They showed that personal income rose a whopping 1.7% last month, greatly exceeding forecasts of a 0.4% rise. However, most of the surprise increase was a result of the economic stimulus checks and not due to rising wages. The spending portion of the report revealed a 0.8% rise, which slightly exceeded forecasts. Also worth noting is that an inflation reading in the data came in slightly lower than forecasts, so overall, this data can be considered favorable to bonds and mortgage rates. The second report of the day was the University of Michigan’s Consumer Sentiment Index’s final reading for June. It showed a modest downward revision of 0.3%, meaning consumer confidence was less than expected. This can also be considered good news for bonds, but this revision is not important enough to heavily influence trading or mortgage rates. Next week doesn’t bring us the release of many reports, but the majority of those on the schedule are considered to be of high-importance to the markets. There is no relevant data due to be posted Monday, but Tuesday does bring us one of the more important reports 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…. Float if my closing was taking place within 7 days… Float if my closing was taking pla ce 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: bond, bond market, closing, consumer confidence, consumer sentiment index, downward revision, economic stimulus, Float, major stock indexes, refinancing a home, stock, stock prices, today, trading, week, year treasury note

Daily Rate Lock Recommendation – 06/20/2008 12:05:00 PM EST

Friday’s bond market has opened in positive territory following noticeable stock losses. The stock markets are in negative territory following concerns about financial sector and rising oil prices. The result is the Dow down 127 points and the Nasdaq down 38 points. The bond market is currently down 16/32, but we likely will see little change in this morning’s mortgage rates due to weakness in bonds late yesterday. There is no relevant economic data being posted today. As expected, stock prices are influencing bond trading. As long as the stock markets do not stage a rally and recover their early losses, I am expecting bond prices to remain fairly calm and mortgage rates to stay at this morning’s levels. If the major stock indexes fall further, we may see enough improvement in bonds for mortgage rates to revise lower this afternoon. Next week is fairly busy with economic releases, not only in terms of the number of reports scheduled for release, but also the importance of some of them. We will see data on consumer confidence, manufacturing sector strength, housing sales and the final reading of the 2nd Quarter GDP. We also have the next FOMC meeting to be concerned about that will likely bring volatility to the markets and mortgage rates. There is no relevant economic data scheduled for release Monday, but Tuesday does bring one of the more important reports of the week. Monday is also the only day of the week with no relevant news or data scheduled to 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… 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, closing, consumer confidence, economic releases, housing sales, lock, major stock indexes, negative territory, next fomc meeting, quarter gdp, refinancing a home, rising oil prices, stock, stock losses, territory, week

Daily Rate Lock Recommendation – 06/18/2008 11:10:00 AM EST

Wednesday’s bond market has opened in positive territory following early stock losses. The stock markets are reacting negatively during early trading to some corporate earnings news. This has the Dow down 131 points and the Nasdaq down 32 points. The bond market is currently up 20/32, which should improve this morning’s mortgage rates by approximately .125 – .250 of a discount point. There is no relevant economic news scheduled for release today, so I am expecting to see the stock markets and oil prices be the biggest influences on bond trading and mortgage rates. If the major stock indexes extend their early losses, we could see bond prices rise and mortgage rates move lower. However, if stocks recover, we will likely see bonds suffer and possibly get upward revisions to mortgage rates today. May’s Leading Economic Indicators (LEI) will be posted late tomorrow morning. The Conference Board, who is a New York-based business research group, will post this data. It attempts to predict economic activity over the next three to six months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher tomorrow morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show no change from April to May. We will also get last week’s unemployment numbers from the Labor Department tomorrow morning. Normally these figures are not worth addressing too much, but the previous week’s number of new claims jumped to 384,000, coming close to an important benchmark of 400,000. If last week’s total moved higher, we may see bonds respond favorably. If the number of new claims was below forecasts of 375,000, bonds could move lower tomorrow. This data comes before the LEI and before the other markets open. 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, business research group, closing, corporate earnings, earnings news, leading economic indicators, LEI, lock, lower mortgage, major stock indexes, stock, stock losses, tomorrow, unemployment numbers, upward revisions, week

Daily Rate Lock Recommendation – 05/12/2008 11:48:00 AM EST

Monday’s bond market has opened up slightly despite early stock gains. The stock markets are kicking the week off in positive territory with the Dow up 75 points and the Nasdaq up 19 points. The bond market is currently up 6/32, but we will likely see a slight increase in rates as a result of weakness late Friday.

The week’s first piece of data is April’s Retail Sales report early tomorrow morning. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for a drop in sales of 0.2% from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower tomorrow. However, a larger increase could fuel bond selling and lead to higher mortgage rates.

Wednesday’s only relevant report is April’s Consumer Price Inde x (CPI). It is similar to next week’s PPI report, but measures inflationary pressures at the more important consumer level of the economy. Its results will be watched closely and can lead to significant volatility in the bond market and mortgage pricing. Current forecasts are calling for increases of 0.3% and 0.2% respectively in the overall index and the core data readings. The core data is the more important of the two since it excludes more volatile food and energy prices.

Overall, it likely will be a moderately active week for mortgage rates. Besides the week’s important economic news, look for the stock markets to be a major influence on trading. I suspect we will see a fair amount of volatility in stocks, which should affect bond prices. Significant stock weakness should translate into bond gains and lower mortgage rates. However, if the major stock indexes rally, we could see mortgage rates move higher as a result.

If I were considering finan cing/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: April, bond, bond prices, closing, core data, Float, Inde, inflationary pressures, lower mortgage, major stock indexes, refinancing a home, relevant report, stock, stock gains, U.S., volatile food, week

Daily Rate Lock Recommendation – 05/08/2008 12:38:00 PM EST

Thursday’s bond market has up sharply, continuing yesterday’s late rally. The stock markets are also in positive territory with the Dow up 56 points and the Nasdaq up 11 points. The bond market is currently up 27/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

The only economic news posted this morning were the weekly unemployment figures from the Labor Department. They said that 365,000 new claims for benefits were filed last week. This was a smaller number than was expected, but fortunately has not affected bond prices or mortgage rates.

Yesterday’s 10-year Note auction was not met with a very good demand. Despite this we saw bond prices rise during afternoon trading as the stock markets faltered. This is a sign that funds were being shifted from stocks into bonds, which may indicate an expectation of weakness in stocks. If the major stock indexes do begin to fall, we should see bonds benefi t and mortgage rates move lower.

Today’s 30-year Bond sale could very well have the same result as yesterday’s auction did. However, it appears that investors may not be so quick to react to its results. With no important economic data on tap tomorrow, we could see further gains in bonds, especially if stocks turn south.

March’s Goods and Services Trade Balance report will be released early tomorrow morning. This report gives us the size of the U.S. trade deficit but likely will not have much of an impact on the bond market or mortgage pricing. It is expected to show a $61.3 billion trade deficit.

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 i f 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 market, bond prices, closing, Float, labor department, major stock indexes, mortgage rates, refinancing a home, stock, stock markets, Trade, trade balance, U.S., unemployment figures, yesterday

Daily Rate Lock Recommendation – 05/05/2008 12:52:00 PM EST

Monday’s bond market has opened fairly flat despite stock weakness. The major stock indexes are showing losses with the Dow down 53 points and the Nasdaq down 6 points. The bond market is currently down 3/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point over Friday’s rates.

This week is very light in terms of economic releases scheduled to be posted. There are actually three reports scheduled that are worthy of addressing, but none of them are considered to be highly important to bonds and mortgage rates. The Institute for Supply Management (ISM) Services Index was posted this morning and came in stronger than expected. However, the variance between the actual reading and the forecasted reading was not enough to cause much concern in the bond or mortgage markets.

The Labor Department will release its 1st Quarter Productivity and Costs data early Wednesday morning. This information helps u s measure employee productivity in the workplace. High levels of productivity help allow low-inflationary economic growth. If employee productivity is rising, the bond market should react favorably. However, a decrease could raise inflation concerns that cause bond prices to drop and mortgage rates to rise Wednesday morning. It is expected to show a 1.5% increase in productivity.

March’s Goods and Services Trade Balance report will be released early Friday morning. This report gives us the size of the U.S. trade deficit but likely will not have much of an impact on the bond market or mortgage pricing. It is the least important of this week’s data.

In addition to this week’s economic data, we also have Treasury auctions that can influence bond trading and affect mortgage rates. The Treasury will hold a 10 year Note sale Wednesday and 30 Year Bond sale Thursday. Results of the auctions will be posted at 1:30 PM ET. If they were met with a strong demand fr om investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding could lead to higher mortgage pricing those afternoons.

Overall, I am expecting to see a fairly quiet week in mortgage rates, especially compared to last week’s volatility. As long as the stock markets remain fairly calm, I think the day to day changes in mortgage rates will remain relatively small.

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: balance report, bond, bond prices, closing, economic releases, employee productivity, Float, inflation concerns, institute for supply management, major stock indexes, mortgage markets, Productivity, quarter productivity, stock, treasury auctions, U.S., week

Daily Rate Lock Recommendation – 04/21/2008 12:09:00 PM EST

Monday’s bond market has opened in negative territory despite early stock losses. The Dow has started the week with a 60 point loss while the Nasdaq has fallen 5 points. The bond market is currently down 6/32, but we will likely see an improvement in this morning’s mortgage rates of approximately .375 – .500 of a discount due to strength in bonds late Friday.

This week is fairly light in terms of economic news scheduled for release. There are four reports scheduled, but only one of them is likely to cause much movement in mortgage rates. Accordingly, there is a fairly decent possibility of seeing a fairly calm week in the mortgage market.

The week’s first piece of data is one of the least important of all four. The National Association of Realtors will post March’s Existing Homes Sales numbers late tomorrow morning, which are expected to show a drop from February. A similar report to this one and actually the week’s least important data- March ‘s New Home Sales will be released Thursday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts forecasts, I don’t think they will cause much movement in mortgage rates.

Overall, look for Thursday to be the most important day of the week with the Durable Goods report being posted and the Treasury auction. The rest of the week will likely be heavily influenced by the stock markets. If the major stock indexes continue to rally, bonds will likely suffer and mortgage will move higher. If stocks pull back, we could see mortgage rates move lower this 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… T his 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

Tags: association of realtors, bond, closing, existing homes sales, Float, major stock indexes, mortgage credit, mortgage market, national association of realtors, negative territory, sales numbers, stock, stock losses, treasury auction, week

Daily Rate Lock Advisory – Friday Apr. 18th

Friday’s bond market has opened well into negative territory following early stock strength. Stocks are rallying in to the weekend with the Dow up 230 points and the Nasdaq up 60 points. The bond market is currently down 20/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point over yesterday’s morning rates.

There is no relevant data scheduled for release today, so the likelihood of bonds reacting to stock movements was fairly high. This means that the rally in the major stock indexes translates into bad news for mortgage shoppers this morning. The stock rally has caused investors to sell bond holdings, leading to this morning’s losses and mortgage rate increases.

Next week is very light in terms of economic releases scheduled to be posted. There are only three factual reports on the agenda along with a couple of Treasury auctions that sometimes influence bond trading. The first report is not scheduled for release until Wednesday morning, meaning stocks will likely be a major influence on bond trading and mortgage rates the first part of the week.

Look for more details on next week’s data and 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.
©Mortgage Commentary 2008

Tags: bond, bond holdings, closing, economic releases, factual reports, Float, major stock indexes, mortgage commentary, mortgage shoppers, negative territory, Release, stock, stock movements, stock rally, treasury auctions, week