Daily Mortgage Rate Lock Advisory

Wednesday’s bond market has opened in negative territory following early stock strength and concerns over today’s FOMC meeting adjournment. The stock markets are showing strong gains with the Dow up 130 points and the Nasdaq up 32 points. The bond market is currently down 12/32, which should push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point compared to yesterday’s morning rates.

This morning’s only relevant economic data was June’s Trade Balance report that revealed a $27.0 billion deficit. This was smaller than expected, but this data is not considered to be highly important to the markets so its impact on this morning’s trading and mortgage rates has been minimal.

It will likely be an active afternoon for the markets and mortgage rates. The results of today’s 10-year Treasury Note auction will be posted at 1:00 PM ET and this week’s
FOMC meeting will adjourn at 2:15 PM ET. Either of these events can lead to afternoon swings in the financial markets and mortgage rates, so expect to see some afternoon revisions today.

This report will be updated shortly after the markets have an opportunity to react to the FOMC statement, but I am holding my cautious approach towards rates into this afternoon’s events. I would not be surprised to see upward revisions to rates later today.

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.

Friday’s bond market has opened down sharply following the release of stronger than expected employment numbers. The stock markets are reacting favorably to the data with the Dow up 136 points and the Nasdaq up 32 points. The bond market is currently down 28/32, which should push this morning’s mortgage rates higher by approximately .375 – .500 of a discount point compared to yesterday’s morning rates.

The Labor Department reported this morning that only 247,000 jobs were lost last month and that the U.S. unemployment rate fell to 9.4%. Both of these readings were stronger than expected. Analysts had forecasted a job loss of 328,000 and an increase on the unemployment rate of 0.1% to bring it to 9.6%. In addition, average hourly earnings also exceeded forecasts with a 0.2% increase.

Today’s news was definitely negative for bonds and mortgage rates. It indicates that the employment sector is not as bad as many had thought. While it was still softening last month, it was at a much slower pace than expected. That helps support the theory that the recession may be nearing an end. In fact, some analysts are already stating they think it has ended. This is bad for bonds because economic growth often creates an environment with inflation concerns that make bonds less attractive to investors. The result usually ends up being higher mortgage rates as investors shift funds into a growing stock market.

Next week is another busy one for the markets and mortgage rates. There are several very important economic releases scheduled to be posted in addition to another FOMC meeting that can heavily influence bond trading and mortgage rates. None of them is due out Monday, but there is relevant data or events scheduled for every other day 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….
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.

Thursday’s bond market has opened relatively flat with no important economic data on the schedule for today. The stock markets are showing minor losses with the Dow down 15 points and the Nasdaq down 11 points. The bond market is currently nearly unchanged from yesterday’s close, but we will still see an increase in this morning’s mortgage rates of approximately .125 – .250 of a discount point due to weakness in bonds late yesterday.

Today’s only semi-relevant data was weekly unemployment claims from the Labor Department. They reported that 550,000 new claims for benefits were filed last week. This was much lower than the 580,000 that was expected, but since this data basically tracks only a week’s worth of claims it usually has a minimal impact on mortgage rates.

Tomorrow morning brings us the almighty monthly Employment report. This report gives us the U.S. unemployment rate, number of jobs added or lost during the month and the average hourly earnings reading for July. The ideal situation for the bond market is rising unemployment, a sizable loss of jobs and little change in earnings. This report is considered to be one of the single most important releases that we see each month, therefore, can heavily influence the markets and mortgage rates.

Current forecasts are calling for the unemployment rate to have risen 0.1% to 9.6% while approximately 328,000 jobs were lost. The unemployment rate probably will not be much of a factor unless it moved much more than the 0.1% that is expected. However, due to the importance of these readings, we will most likely see quite a bit of volatility in the markets and mortgage pricing tomorrow morning if they vary from forecasts. If the data shows stronger readings such as fewer jobs lost in the month or a lower than expected unemployment rate, expect to see mortgage rates move higher tomorrow. Weaker than expected
readings should push mortgage rates lower.

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.

Friday’s bond market has opened in positive territory as investors digest the week’s events. The stock markets are showing gains with the Dow up 50 points and the Nasdaq up 22 points. The bond market is currently up 4/32, but we will still see an increase in this morning’s mortgage rates due to weakness late yesterday.

There is no relevant economic data scheduled for release today. This makes it likely that bonds will be influenced mostly by changes in the stock markets today. As long as the major stock indexes remain calm, I would expect bonds and mortgage rates to follow suit. If the stock markets give back this morning’s gains, bonds may react favorably as the day goes on. However, afternoon weakness seems to be routine lately so we should go into the weekend with a cautious approach.

Next week is fairly active in terms of economic releases. There are several scheduled for release
that may influence mortgage pricing, but we also have an FOMC meeting on the calendar next week. In addition to those items, there is another round of Treasury auctions on the agenda that may also affect bond trading and mortgage rates.
None of the economic data or relevant events take place on Monday, so look for it to be a day of preparation for the week’s events. Unless something positive happens or is announced over the
weekend, there is little to lead us to believe Monday will be a strong day for bonds. But look for more details on next week’s data and relevant 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.

Thursday’s bond market has opened in negative territory as yesterday’s afternoon weakness continues into this morning’s trading. The stock markets are showing gains with the Dow up 82 points and the Nasdaq up 2 points. The bond market is currently down 17/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point over yesterday’s morning rates.

The Labor Department reported early this morning that 608,000 new claims for unemployment benefits were filed last week. This was slightly higher than what analysts had expected, but not enough of a difference to have much influence on mortgage pricing.

The Conference Board gave us today’s second piece of news with the release of its Leading Economic Indicators (LEI) for May. It revealed a 1.2% increase that exceeded forecasts and points towards a sharp increase in economic activity over the next three to six months. This is bad news for bonds because strengthening economic activity makes bonds less appealing to investors and leads to higher mortgage rates.

Yesterday’s morning rally in bonds was short-lived as trading turned sour as the day went on. What looked like a potentially wonderful day for mortgage shoppers ended up being a bad day. A combination of a couple of factors led to the selling, including a weakening dollar that makes U.S. securities less valuable to international investors. The negative tone has carried into this morning’s trading and with no important economic data this afternoon or tomorrow to stop the selling, we may see mortgage rates revise higher this afternoon and possibly tomorrow.

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…

Rate Lock Advisory – Wednesday Apr. 22nd

Wednesday’s bond market has opened in negative territory with no relevant economic news and early stock gains making bonds less attractive. The Dow is currently up 60 points while the Nasdaq has gained 28 points. The bond market is currently down 13/32, which should equate to an increase in this morning’s mortgage rates of approximately .250 of a discount point.

There is no relevant data scheduled for release again today, so look for any movement in bond prices and mortgage rates to come as a result of a swing in stock prices. Yesterday’s afternoon weakness in bonds was not a complete surprise and we may have more of it today. Accordingly, this may be a good time to lock a rate if closing in the immediate future.

We do have some relevant data scheduled for release tomorrow. The National Association of Realtors will post March’s Existing Homes Sales early tomorrow morning. They are expected to show a drop from February’s sales, but this data is not considered highly important. It can however, influence trading and lead to slight changes in mortgage rates if it varies greatly from forecasts.

Also tomorrow is the weekly release of unemployment figures from the Labor Department. They are expected to show that 639,000 new claims for benefits were filed last week. This would be an increase from the previous week’s total. The higher the number of claims, the better the news for bonds 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… 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 – Friday Mar. 20th

Friday’s bond market has opened in negative territory this morning with no relevant economic news to drive the markets. The stock markets are relatively flat with the Dow up a few points and the Nasdaq down the same. The bond market is currently down 6/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point over yesterday’s morning rates.

As expected, we saw some pressure in bonds late yesterday and this morning. This by no means is a point of concern for me. The selling or balancing of portfolios is common after such a drastic move in such a short period of time. I am still quite optimistic that mortgage rates still have more room to improve in the near future.

There are no relevant economic reports being released today. Fed Chairman Bernanke is giving a speech at noon today to a bankers’ conference in Phoenix, Arizona. It is not considered to be an important speech that will likely affect the markets or mortgage rates. Whenever he speaks publicly there is always a possibility of the markets reacting, but the likelihood of seeing any reaction that will change mortgage rates is minimal in my opinion.

Next week is fairly busy with economic releases, but none are considered to be of extreme importance. There are reports scheduled for several days of the week, including Monday’s posting of February’s Existing Home Sales data. Look for more details on next week’s events in Sunday evening’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 b est interest of all/any other borrowers.
©Mortgage Commentary 2009

Rate Lock Advisory – Friday Mar. 13th

Friday’s bond market has opened in negative territory following a strong open in stocks and comments made by China that raised concerns of potential selling in bonds. However, stocks have since given back their earlier gains. The Dow is now nearly unchanged while the Nasdaq is now down 7 points. The bond market is currently down 26/32, but strength yesterday will likely keep this morning’s mortgage rates close to yesterday’s levels.

The first of today’s two economic reports was January’s Goods and Services Trade Balance report. It showed that the U.S. trade deficit fell to $36.0 billion in January. This was lower than forecasts of a $38.0 billion deficit, but this data usually does not have a major influence on bonds or mortgage rates.

The second report of the morning was the University of Michigan’s Index of Consumer Sentiment for March. It showed a reading of 56.6 that was a little higher than the 55.0 that was expected and a slight increase f rom February’s final reading. This means that consumer confidence was a little stronger than expected. That can be considered bad news for mortgage rates, but since the variance was minor it has not impacted trading this morning.

The comments made by China has some traders believing that they may begin to sell holdings in the near future. Since they hold approximately $727 billion of U.S. debt, or 6% of the total outstanding debt, a selling campaign would likely drive prices lower. Accordingly, traders are taking a cautious approach this morning.

Next week brings us the release of several important reports, including key inflation readings and another FOMC meeting. There is relevant data scheduled for release Monday when February’s Industrial Production data will 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… 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 – Wednesday Mar. 11th

Wednesday’s bond market has opened down slightly with no relevant economic news and only small gains in stocks. The Dow is currently up 20 points while the Nasdaq has gained 6 points. The bond market is currently down 4/32, which should keep this morning’s mortgage near yesterday’s levels.

There is no relevant economic data scheduled for release again today. Tomorrow brings us the first relevant data of the week. The 10-year Note sale is being held today while the 30-year Bond auction will be done tomorrow. Results will be posted at 1:00 PM each day. It is fairly common to see weakness in bonds right before the sales as trading firms prepare for them. If the auctions are met with a strong demand, that weakness is usually erased almost immediately. Therefore, is today’s sale is met with a strong demand, we may see movement in bonds and rates this afternoon.

February’s Retail Sales data will be released tomorrow morning. This report is extreme ly important to the financial markets because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, data that is related usually has a big impact on the financial markets. This month’s report is expected to show a decline in sales of approximately 0.4%. If it reveals a larger decline in sales, the bond market should rise and mortgage rates will likely fall. If it reveals an increase, I expect to see bond prices fall and mortgage rates rise tomorrow morning.

We also will get weekly unemployment claims from the Labor Department tomorrow morning. They are expected to say that 640,000 new claims for benefits were filed last week. This would be little change from the previous week’s total, but this data is not nearly important as the sales data is and will likely have little impact on the markets or rates.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 d ays… 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 – Friday Mar. 6th

Friday’s bond market has opened in positive territory after this morning’s major economic news failed to hurt the recent enthusiasm in bonds. The stock markets are in negative ground, but were showing strong gains during early trading. The Dow is currently down 19 points while the Nasdaq has lost 12 points as the opening rally has fizzled. The bond market is currently up 5/32, which with yesterday’s gains should improve this morning’s mortgage rates by approximately .375 of a discount point.

The Labor Department reported this morning that the unemployment rate spiked to a 25-year high of 8.1% last month. This was higher than the 7.9% rate that was expected, which can be considered good news for bonds. The reports also revealed that 651,000 jobs were lost during the month, but that was very close to forecasts. It also revised February’s job loss higher by 57,000 jobs. The hourly earnings reading matched forecasts of a 0.2% increase.

Overall, t he unemployment rate was an attention magnet, but the other portions of the report are a non-factor in this morning’s trading and mortgage rates. The early rise then fall in stocks indicates that further weakness in them could be likely. That may benefit bonds as investors seek shelter from the volatility. However, if stocks can hold any type of a rally, the bond market could see considerable weakness, likely driving mortgage rates higher.

Next week is pretty light in terms of economic releases. There are only a couple of relevant reports scheduled to be posted, but one of them is highly important. None of the relevant news will be posted until mid-week, so look for a relative calm day for mortgage rates Monday unless the stock markets rally or sell-off again. Sunday’s weekly preview will have more details on next week’s events.

If I were considering financing/refinancing a home, I would…. Float if my closing was taking place within 7 days… Fl oat 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.