Daily Mortgage Rate Lock Advisory

Weekly Mortgage Rate Lock Advisory – Sunday Mar. 22nd

Rate Lock Advisory – Sunday Mar. 22nd

This week brings us the release of six monthly and quarterly reports for the bond market to digest. Two of these reports can be considered much less important than the others, but with data scheduled for release four out of the five days we will still likely see movement in rates from day to day.

The first report of the week is February’s Existing Home Sales late tomorrow morning. It will give us a measurement of housing sector strength and mortgage credit demand, but is usually considered to be of low importance to the financial markets. Its’ sister report- New Home Sales, will be posted Wednesday morning. Since tomorrow’s release is the day’s only data, it may influence bond trading enough to cause a slight change in mortgage rates if it varies greatly from forecasts. Current forecasts are calling both reports to show a decline in sales.

Wednesday’s important data comes from the Commerce Department, who will post February’s Durable Goods Orders. T his report gives us a measurement of manufacturing sector strength by tracking new orders for big-ticket items, or products that are expected to last three or more years. This data is known to be volatile from month to month but is still considered to be of high importance. Analysts are expecting it to show a decline in new orders of approximately 2.0%. A smaller decline would be considered a negative for bonds and could lead to higher mortgage rates Wednesday morning.

The next relevant data is Thursday’s final revision to the 4th Quarter GDP. This is the second and final revision to January’s preliminary reading and is expected to show a downward revision of 0.4% to the reading that was posted last month. Analysts are now more concerned with next month’s preliminary reading of the 1st quarter than data from three to six months ago, so I don’t expect this report to affect mortgage rates much.

There are two relevant reports scheduled for release Friday. The first is February’s Personal Income & Outlays report. This data helps us measure consumers’ ability to spend and current spending habits, which is important to the mortgage market because of 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 0.1% drop in income and a 0.3% increase in spending.

The second report comes from the University of Michigan at 9:45 AM ET. Their revision to the March consumer sentiment index will give us an indication of consumer confidence, which hints at consumers’ willingness to spend. It is expected to show little change from the previous reading of 56.6.

Overall, it is difficult to label one particular day as the most important of the week. The sing le most important report will likely be the Durable Goods Orders, but none of the week’s data has the potential to be a major market mover. It will be interesting to see whether last week’s Fed news influences this week’s trading. After the huge rally, we saw some weakness in bonds at the end of the week, but this did not come as a surprise. If the stock markets start to move lower again, we should see gains in bonds and improvements in mortgage rates. But, if stocks continue to move higher, further pressure in bonds are possible, leading to higher mortgage pricing.

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 c annot be guaranteed to be in the best interest of all/any other borrowers.
©Mortgage Commentary 2009

Tags: big ticket items, bond trading, downward revision, durable goods orders, existing home sales, mortgage credit, mortgage rates, quarter gdp, Release, relevant reports, report, week

Daily Mortgage Rate Lock Advisory – Friday Feb. 27th

Rate Lock Advisory – Friday Feb. 27th

Friday’s bond market has opened in negative territory again despite weaker than expected economic news. The stock markets are also showing early losses with the Dow down 74 points and the Nasdaq down 2 points. The bond market is currently down 11/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

Today’s big news was the first revision to the 4th Quarter GDP that showed a sizable downward revision from last month’s preliminary estimate. Today’s release revealed that the GDP, which is the sum of all goods and services produced in the U.S. and is considered to be the best measurement of economic activity, actually shrank at 6.2% annual pace. This was much weaker than the negative 3.8% that was released last month and weaker than the 5.2% decline that was forecasted for this revision. This was also the worst quarterly reading in 26 years. That indicates that the economy was weaker than many had thought .

Generally speaking, today’s headline reading was good news for bonds and mortgage rates. The problem came in a key inflation reading in the report that went from a 0.1% decline to a 0.5% gain, meaning that despite the drop in activity there still remains a concern about inflation. That has contributed to this morning’s bond loss along with further debt supply concerns that are coming as a result of the Fed’s revised holdings in banking giant Citigroup.

The University of Michigan’s revised Index of Consumer Sentiment for February was also posted this morning. It showed a reading of 56.3, which was little change from this month’s previous estimate of 56.2. This news had little impact on today’s trading or mortgage pricing.

Next week is pretty busy with economic releases scheduled for four of the five trading days. The week’s kicks off with the release of two reports- January’s Personal Income and Outlays along with February’s ISM Manufact uring Index. Both will be posted Monday morning and can influence bond trading and mortgage rates.

There is important data being posted everyday of the week except Tuesday. 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.

Tags: bond, bond market, closing, downward revision, economic releases, index of consumer sentiment, negative territory, outlays, quarter gdp, stock markets, supply concerns, today, U.S., week

Daily Mortgage Rate Lock Advisory – Tuesday Dec. 23rd

Rate Lock Advisory – Tuesday Dec. 23rd

Tuesday’s bond market has opened flat after this morning’s economic data failed to show any major surprises. The stock markets are reacting similarly with the Dow down 16 points and the Nasdaq nearly unchanged from yesterday’s close. The bond market is also practically unchanged but we will still see an increase in this morning’s rates of approximately .250 – .375 of a discount point.

The first of today’s four reports was the final revision to the 3rd Quarter GDP that showed a 0.5% decline. This matched forecasts but was not likely to significantly impact mortgage pricing anyhow. The data is quite aged by now and next month we get the initial reading on this quarter’s activity, so analysts do not pay much attention to this version of the report unless it varies greatly from forecasts.

November’s Existing and New Home Sales reports were both posted this morning and both revealed larger than expected drops in sales. This indicates that the housin g sector is still softening and not near the ?floor? that many are attempting to predict. However, this is good news for bonds and mortgage rates because a weakening housing sector will make slow the economic recovery and keeps inflation fears to a minimal.

The last report of the day did reveal a higher than expected level of consumer sentiment. The University of Michigan’s Index of Consumer Sentiment for December was revised and showed a higher level of sentiment than the previous estimate. The reading of 60.1 means that consumers were more optimistic about their own financial situation than many had thought. This is considered bad news for bonds because rising sentiment means that consumers are more apt to make large purchase sin the near future. Still, this report ha snot had a significant impact ton today’s trading.

The last event of the day is the 5-year Treasury Note auction. If the sale is met with a decent demand from investors, we could se e interest in other notes and bonds such as mortgage-related bonds increase during afternoon trading. But, a lackluster interest from investors may also lead to weakness in bonds and possible upward afternoon revisions to mortgage pricing.

Tomorrow morning brings us the release of November’s Durable Goods Orders and the Personal Income and Outlays report. The Durable Goods Orders report tracks new orders for big-ticket items and is expected to show a drop of 3.1%. The Income and Outlays report is likely to show that personal income was unchanged from October and that spending fell 0.8% last month. Weaker readings would be good news for the bond market and mortgage rates.

Also worth noting is an early close tomorrow ahead of the Christmas Day holiday. The markets will be closed Thursday in observance of the holiday but will be open Friday. The bond market will close early Friday also. However, I am expecting to see a very quiet couple of days as many traders are home for the holidays.

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.

Tags: bond, bond market, closing, index of consumer sentiment, inflation fears, initial reading, lock, mortgage rates, quarter gdp, report, sentiment, stock markets, year treasury note

Daily Mortgage Rate Lock Advisory – Monday Dec. 22nd

Rate Lock Advisory – Monday Dec. 22nd

Monday’s bond market has opened flat with no relevant economic news on tap for today and a fairly uneventful morning in stocks. The stock markets are showing losses, but they can be considered pretty minor compared to recent sessions. The Dow is currently down 17 points while the Nasdaq has lost 20 points. The bond market is currently unchanged from Friday’s close, which should keep this morning’s mortgage pricing near Friday’s levels.

The rest of the week brings us the release of six monthly or quarterly economic reports and a fairly important Treasury auction tomorrow. Most of the data being released is not considered to be of high importance to the markets, but with the Christmas holiday falling during the week we can expect very thin trading. We also may see profit-taking by some firms to capture the sizable gains in bonds this year as it winds down, so by no means can we be guaranteed a quiet week.

There is no relevant economic news schedul ed for release today, but four of the week’s reports are scheduled to be posted tomorrow. The first is the final revision to the 3rd Quarter GDP. I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy contracted at a 0.5% annual pace during the quarter and this month’s revision is expected to show the same.

The next two are November’s Existing and New Home Sales reports. The Existing Home Sales release will come from the National Association of Realtors while the New Home Sales data is a Commerce Department report. Both give us a measurement of housing sector strength and mortgage credit demand, however, neither are considered to be of high importance. Both of the reports are expected to show a drop in sales.

The fourth report of the day also comes late morning when the revised University of Michigan Index of Consumer Sentiment for December is posted. Current forecasts are calling for a small downward revision from the preliminary reading of 59.1. This is important because rising consumer confidence indicates that consumers may be more apt to make large purchases in the near future. An unexpected upward revision could lead to higher mortgage rates tomorrow.

The last event tomorrow is the 5-year Treasury Note auction. If the sale is met with a decent demand from investors, we could see interest in other notes and bonds such as mortgage-related bonds increase during afternoon trading. But, a lackluster interest from investors may also lead to weakness in bonds and possible upward afternoon revisions to mortgage pricing.

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 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.

Tags: association of realtors, closing, commerce department report, existing home sales, index of consumer sentiment, lock, michigan index, mortgage credit, national association of realtors, quarter gdp, tomorrow, treasury auction, week

Weekly Mortgage Rate Lock Advisory – Sunday Dec. 21st

Rate Lock Advisory – Sunday Dec. 21st

This significantly shortened trading week brings us the release of six monthly or quarterly economic reports and a fairly important Treasury auction. Most of the data being released is not considered to be of high importance to the markets, but with the Christmas holiday falling during the week we can expect very thin trading. This means that we may see a larger reaction than normal to some news because there will be fewer traders working and less transactions being made. We also may see profit-taking by some firms to capture the sizable gains in bonds this year as it winds down, so by no means can we be guaranteed a quiet week.

There is no relevant economic news scheduled for release tomorrow. Five of the week’s events are scheduled for Tuesday. The first is the final revision to the 3rd Quarter GDP. I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy contracted at a 0.5% annual pace during the quarter and this month’s revision is expected to show the same.

The next two are November’s Existing and New Home Sales reports. The Existing Home Sales release will come from the National Association of Realtors while the New Home Sales data is a Commerce Department report. Both give us a measurement of housing sector strength and mortgage credit demand, however, neither are considered to be of high importance. Both of the reports are expected to show a drop in sales.

The fourth report of the day also comes late morning when the revised University of Michigan Index of Consumer Sentiment for December is posted. Current forecasts are calling for a small downward revision from the preliminary reading of 59.1. This is important because rising consumer confidence indicates that consumers may be more apt to make large purchases in the near future. An unexpected upward revision could lead to higher mortga ge rates Tuesday.

The last event on Tuesday that is worth noting is the 5-year Treasury Note auction. If the sale is met with a decent demand from investors, we could see interest in other notes and bonds such as mortgage-related bonds increase during afternoon trading. But, a lackluster interest from investors may also lead to weakness in bonds and possible upward afternoon revisions to mortgage pricing.

The remaining two reports are scheduled for release Wednesday at 8:30 AM. This is when November’s Personal Income and Outlays data and Durable Goods Orders will be posted. The Income and Outlays report will give us an important measurement of consumer ability to spend and current spending habits. Since consumer spending makes up two-thirds of the U.S. economy, any related data usually has a fairly significant impact on the financial markets and mortgage rates. Current forecasts are calling for no change in income and a 0.8% decli ne in spending. If this report reveals weaker than expected readings, we should see the bond market improve and mortgage rates drop slightly Wednesday

The last piece of data will be the Commerce Department’s Durable Goods Orders for November. This data gives us an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years. Analysts are expecting the report to show a decline in the neighborhood of 3.1%. A larger decline would indicate that the manufacturing sector was weaker than many had thought. This would be good news for the bond market and should drive mortgage rates lower. However, a smaller than expected drop in orders could lead to mortgage rates moving higher early Wednesday morning.

Overall, I am expecting to see some movement in the markets and mortgage rates, but nothing drastic unless we get some surprising results from the week ‘s data. The bond market will close early Wednesday and Friday and be closed all day Thursday. This means that firms that trade bonds will likely be keeping only a skeleton staff most of the week. Still, my biggest fear between now and the end of the year will be selling bonds to capture profits from the significant rally of the past several weeks. That could lead to bonds falling and mortgage rates rising.

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.

Tags: association of realtors, closing, commerce department report, downward revision, existing home sales, index of consumer sentiment, lock, mortgage credit, national association of realtors, quarter gdp, release tomorrow, report, treasury auction, U.S., Wednesday, week

Rate Lock Advisory – Thursday Sep. 25th

Rate Lock Advisory – Thursday Sep. 25th

Thursday’s bond market has opened in negative territory after the stock markets have opened with strong gains. Stocks are rallying after some of the hurdles that may have prevented the bailout plan from being approved appear to have been tackled. The result is the Dow up 202 points and the Nasdaq gaining 35 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.

The Commerce Department gave us August’s Durable Goods Orders results this morning, saying that new orders for big-ticket items fell 4.5% last month. This drop was over four times analysts’ forecasts, meaning that the manufacturing sector was much weaker than thought. This is considered to be good news for bonds and mortgage rates because slowing economic activity will likely ease inflation concerns and make long term securities such as mortgage-related bonds more attractive to investors.

Augus t’s New Home Sales were also posted this morning, showing that sale of newly constructed homes fell to their lowest level since October 1991. This strongly indicates that the housing sector is still weakening and not ready to bottom out yet. That is also good news for the bond market and mortgage rates.

There are two reports scheduled for release tomorrow. The first is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. It is expected to show a slight increase from the previous estimate of a 3.3% annual rate.

The final report of the week is Friday’s release of the University of Michigan’s Index of Consumer Sentiment. This is the revised reading for September. The preliminary reading that was released earlier this month revealed a 73 .1 reading. Analysts are expecting to see a downward revision to 70.9, meaning confidence was weaker than previously thought. A lower than expected reading should help improve mortgage rates tomorrow 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… 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.

Tags: bailout plan, big ticket items, bond, bond market, closing, durable goods orders, index of consumer sentiment, inflation concerns, lock, mortgage rates, negative territory, quarter gdp, release tomorrow

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 – 06/25/2008 3:34:00 PM EST

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.

Tags: big ticket items, bond, bond prices, closing, durable goods orders, fomc meeting, gdp data, lock, quarter gdp, release tomorrow, tomorrow, upward revision, upward revisions

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