Daily Mortgage Rate Lock Advisory

Rate Lock Advisory – Wednesday Sep. 3rd

Wednesday’s bond market has opened flat despite a stronger than expected economic news. The stock markets are showing early losses with the Dow down 20 points and the Nasdaq down 10 points. The bond market is currently nearly unchanged, but we will still likely see an improvement in this morning’s mortgage rates of approximately .250 of a discount point due to strength in bonds late yesterday. The Commerce Department released July’s Factory Orders data this morning, revealing a 1.3% increase in new orders. This report measures manufacturing sector strength and is similar to last week’s Durable Goods Orders, but includes orders for both durable and non-durable goods. Analysts’ latest forecasts were calling for an increase of 0.8% in new orders, meaning manufacturing activity was stronger than expected. However, the data’s impact on trading and mortgage rates has been fairly minimal this morning. Later today, the Federal Reserve will release its Be ige Book report. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings. It is usually released approximately two weeks prior to each FOMC meeting. If the 2:00 PM ET release reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed’s next interest rate move. Most likely though, it will be a non-event and will not lead to a change in mortgage rates. Tomorrow morning brings us the revision to the 2nd Quarter Productivity numbers, which measures employee productivity in the workplace. It is expected to show an upward change from the previous estimate of a 2.2% annual pace. Forecasts are currently calling for a reading of 3.4%, which would be good news for the bond market and possibly lead to slightly lower mortgage rates tomorrow morning. If I were considering financing/refinancin g 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: bond, bond market, closing, durable goods orders, employee productivity, fomc meeting, fomc meetings, lower mortgage, mortgage rates, quarter productivity, report, report details, strength, U.S., upward change

Rate Lock Advisory – Monday Sep. 1st

There are five relevant economic reports scheduled for release this week, but they are being posted over four days because the markets were closed today in observance of the Labor Day holiday.   The first piece of data this week comes tomorrow morning with the release of the Institute for Supply Management’s (ISM) manufacturing index at 10:00 AM ET. This index measures manufacturer sentiment and is expected to show a decline from last month’s reading of 50.0 to 49.5 in August. A reading above 50 means that more surveyed manufacturers felt business improved during the month than those who felt it worsened. An increase in the index would probably cause a rally in the stock markets and lead to mortgage rates rising tomorrow, while a reading below 49.5 should lead to lower rates. The second report of the week is July’s Factory Orders data Wednesday morning. This report measures manufacturing sector strength and is similar to last wee k’s Durable Goods Orders, but includes orders for both durable and non-durable goods. This data is expected to show a 0.4% increase in new orders. A smaller than expected rise should lead to lower mortgage rates Wednesday. Also scheduled for release is the Wednesday afternoon Federal Reserve release of its Beige Book report. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings. It is usually released approximately two weeks prior to each FOMC meeting. If the 2:00 PM ET release reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed’s next interest rate move. Most likely though, it will be a non-event and will not lead to a change in mortgage rates. Thursday morning brings us the revision to the 2nd Quarter Productivity numbers, which measures employee productivity in the wo rkplace. It is expected to show an upward change from the previous estimate of a 2.2% annual pace. Forecasts are currently calling for a reading of 2.9%, which would be good news for the bond market and possibly lead to slightly lower mortgage rates Thursday morning. The big news of the week comes Friday morning. The Labor Department will post the unemployment rate, number of new jobs added or lost and average hourly earnings for August early Friday. The ideal scenario for the bond market and mortgage rates is rising unemployment, a smaller than expected rise in new payrolls and earnings to remain unchanged. If we are that fortunate, I expect to see mortgage rates drop considerably Friday morning. Analysts are expecting to see the unemployment rate remain at 5.7% and 70,000 jobs lost in the month. Weaker then expected readings would be very good news for bonds and mortgage rates. Overall, I expect to see the most movement in rates Friday, but Tuesday s hould also be fairly active. I am holding the short-term lock recommendations for the time being as there still seems to be plenty of profit taking opportunities for traders if they choose to do so. This could lead to a spike in mortgage rates if traders sell holdings to capture those gains. This does not mean that I think rates will necessarily move higher. It means that I feel the risk versus the potential reward of continuing to float an interest rate is leaning heavily towards the risky side. Accordingly, locking seems to be the prudent position at this time. 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 b e guaranteed to be in the best interest of all/any other borrowers.

Tags: beige book report, closing, durable goods orders, employee productivity, fomc meetings, index measures, institute for supply management, ism manufacturing index, lower mortgage, quarter productivity, rate, Release, report, U.S., upward change, week

Daily Rate Lock Recommendation – 06/04/2008 12:11:00 PM EST

Wednesday’s bond market has opened in negative territory following stock gains during morning trading. The stock markets are in positive territory with the Dow up 60 points and the Nasdaq up 30 points. The bond market is currently down 7/32, but we likely will still see an improvement in this morning’s mortgage rates due to strength in bonds during afternoon trading yesterday.

The Labor Department said that this morning that the 1st Quarter Productivity and Costs reading actually rose at a 2.6% annual pace. This was slightly more than was expected, but is good news for bonds and mortgage rates. The preliminary reading showed a 2.2% pace and forecasts were calling for an upward revision to 2.5%. This means that workers were a little more productive during the quarter than what was thought. That is considered to be favorable to bonds and mortgage rates because strong levels of productivity are believed to allow the economy to grow without inflation concerns .

The second report of the day was the Institute for Supply Management’s Services Index late this morning. It revealed a reading of 51.7 that was higher than expected, but lower than last month’s 52.0 reading. Accordingly, this data has little impact on bond trading or mortgage rates this morning.

There is no relevant data scheduled for release tomorrow except for weekly unemployment figures from the Labor Department. They are expected to say that 372,000 new claims for unemployment benefits were filed last week, matching the previous week’s total. Generally speaking, this data usually does not have an impact on mortgage rates because it tracks only a week’s worth of claims. This may be the case again tomorrow, however, with Friday’s monthly report coming out any sizable surprise could influence expectations for Friday’s release and lead to changes in mortgage rates.

The Labor Department will post May’s Employment data early Friday mornin g. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate climb to 5.1% with approximately a loss of 60,000 jobs during the month. A higher than expected increase in the unemployment rate and a larger drop in payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates Friday. But, if we see stronger than expected numbers, we will likely get a spike in mortgage rates. Accordingly, proceed with caution if still floating an interest 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… 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, employment data, inflation concerns, institute for supply management, lock, negative territory, quarter productivity, rate, release tomorrow, stock gains, U.S., Unemployment, unemployment benefits, unemployment figures, upward revision

Daily Rate Lock Recommendation – 06/03/2008 11:48:00 AM EST

Tuesday’s bond market has opened in negative territory following the release of stronger than expected economic data and early stock gains. The stock markets are in positive territory with the Dow up 25 points and the Nasdaq up 20 points. The bond market is currently down 13/32, but we likely will not see much change in this morning’s mortgage rates due to strength in bonds late yesterday.

The Commerce Department reported late this morning that April’s Factory Orders rose 1.1%. This greatly exceeded forecasts of a 0.1% decline and indicated that the manufacturing sector was stronger than thought. This is considered to be negative news for bonds and mortgage rates because a growing manufacturing sector is a strong sign of overall economic growth.

Tomorrow morning brings us the release of two pieces of economic data for the markets to digest. The first is the revised 1st Quarter Productivity and Costs reading. This index measures employee output a nd employer costs for wages and benefits. It is considered to be a measurement of wage inflation. It is believed that the economy can grow with low inflationary pressures when productivity is high, so this type of data can influence trading and mortgage rates. Last month’s preliminary reading revealed a 2.2% rate, but I don’t think this revision will have much of an impact on the bond market or mortgage pricing unless it varies greatly from its forecasted reading of 2.5%.

The second report of the day may have a significant impact on the markets or be a non-factor depending on its result. The Institute for Supply Management will release its services index late Wednesday morning. It is expected to show a reading of 51.0, with the same principals as Monday’s manufacturing index. If this reading varies greatly from forecasts, we may see volatility in the markets and mortgage rates. However, if its results are in the general area of expectations, it will likely have n o influence on the markets and mortgage pricing.

There is no relevant data scheduled for release Thursday except weekly unemployment figures. However, market participants will be preparing for Friday’s key Employment report for the month of May. This report will likely lead to plenty of volatility in the markets even if its results vary slightly 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.

Tags: bond, closing, employer costs, index measures, inflationary pressures, institute for supply management, lock, negative news, negative territory, quarter productivity, Release, services index, stock gains, wage inflation

Weekly Rate Lock Advisory 6/1/2008 EST 05:30

This week brings us the release of a couple important pieces of economic data in addition to some moderately important reports. There are a total of four or five reports that are worth watching and are most likely to affect mortgage rates.

The first is the Institute for Supply Management’s (ISM) manufacturing index late tomorrow morning. This highly important index measures manufacturer sentiment. A reading below 50 means that more surveyed manufacturing executives felt that business worsened during the month than those who felt it had improved. A sub-50 reading is also considered recessionary news. Analysts are expecting to see a 48.0 reading in this month’s release, meaning that sentiment slipped slightly during May. A smaller reading will be good news for the bond market and mortgage shoppers while an unexpected increase could contribute to higher mortgage rates.

Tuesday’s only relevant news is the Commerce Department’s release of April’s Factory Orders data. This manufacturing sector report is similar to last week’s Durable Goods Orders release, but also includes orders for non-durable goods. It can cause some movement in the financial markets if it varies from forecasts by a wide margin, but it isn’t expected to cause much change in rates this month. Current forecasts are expecting to see an increase in orders of 0.1%.

The revised 1st Quarter Productivity and Costs report will be released Wednesday morning. This data measures employee output and employer costs for wages and benefits. It is considered to be a measurement of wage inflation. It is believed that the economy can grow with low inflationary pressures when productivity is high. Last month’s preliminary reading revealed a 2.2% rate, but I don’t think this piece of data will have much of an impact on the bond market or mortgage pricing unless it varies greatly from its forecasted reading of 2.5%.

The second report of the day may have a significant impact on the markets or be a non-factor depending on its result. The Institute for Supply Management will release its services index late Wednesday morning. It is expected to show a reading of 51.0, with the same principals as Monday’s manufacturing index. If this reading varies greatly from forecasts, we may see volatility in the markets and mortgage rates. However, if its results are in the general area of expectations, it will likely have no influence on the markets and mortgage pricing.

There is no relevant economic news scheduled for release Thursday, however, Friday’s sole report is arguably the single most important report that we see each month. The Labor Department will post May’s Employment data early Friday morning. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate climb to 5.1% with approximately 52,000 jobs lost during the month. A higher than expected increase in the unemployment rate and a larger drop in payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates Friday. But, stronger than expected numbers would likely lead to a spike in mortgage rates.

Overall, tomorrow or Friday are likely to be the most important days of the week as they bring us the two most important reports on the agenda. If they give us weaker than expected results, we will probably close the week with lower mortgage rates than tomorrow’s opening levels. However, if we see stronger than expected readings in those two releases, I expect mortgage rates to move higher on the week.

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: durable goods orders, employer costs, index measures, institute for supply management, ism manufacturing index, mortgage shoppers, quarter productivity, Release, report, sector report, U.S., wage inflation, week

Daily Rate Lock Recommendation – 05/07/2008 12:57:00 PM EST

Wednesday’s bond market has opened flat despite favorable economic news. The stock markets are mixed with the Dow down 20 points and the Nasdaq up 8 points. The bond market is currently nearly unchanged form yesterday’s closing level, but we will likely see a small increase in this morning’s mortgage rates as a result of weakness in bonds late yesterday.

The Labor Department gave us today’s only relevant economic news with the release of the 1st Quarter Productivity and Costs data. It showed a 2.2% increase in productivity, which exceeded forecasts by a fairly large margin. This is good news for bonds because higher levels of productivity allow the economy to expand with low levels of inflation.

The first of this week’s two most important Treasury auctions will take place today. The Treasury Department will hold a 10-year Note sale today and a 30 Year Bond sale tomorrow. Results of the auctions will be posted at 1:30 PM ET. If they were met with a strong demand from 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 this afternoon and/or possibly tomorrow.

There is no relevant economic data scheduled for release tomorrow except the weekly unemployment figures from the Labor Department. They are expected to report that 375,000 new claims for benefits were filed last week. A significantly larger number would be good news for bonds and mortgage rates, while a sizable decline could hurt rates. If they report a figure anywhere close to the 375,000, this data will likely have little impact on the markets or mortgage rates tomorrow.

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 d ays… 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: 30 year bond, bond, bond prices, closing, Float, labor department, mortgage rates, Productivity, quarter productivity, refinancing a home, release tomorrow, today, tomorrow, treasury auctions, treasury department, unemployment figures

Daily Rate Lock Recommendation – 05/06/2008 12:13:00 PM EST

Monday’s bond market has opened in positive territory even with little news to influence trading. The stock markets are mixed with the Dow down 35 points and the Nasdaq up a couple of points. The bond market is currently up 7/32, which will likely improve this morning’s mortgage rates by approximately .125 – .250 of a discount point.

There is no relevant economic news scheduled for release today. In fact there is little data scheduled to be posted this week. The Labor Department will release its 1st Quarter Productivity and Costs data early tomorrow morning. This information helps us 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 tomorrow 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 from 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.

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 market, bond prices, bond trading, closing, employee productivity, Float, inflation concerns, Productivity, quarter productivity, refinancing a home, trading, treasury auctions, U.S., week

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