Daily Mortgage Rate Lock Advisory

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.

Rate Lock Advisory – Monday Feb. 2nd

Monday’s bond market has opened up slightly following the release of mixed economic data. The stock markets are mixed with the Dow down 59 points and the Nasdaq up 9 points during early trading. The bond market is currently up 4/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

There were two pieces of relevant economic data posted this morning. The first was December’s Personal Income and Outlays report that revealed a 0.2% decline in income and a 1.0% drop in spending.

Forecasts were calling for a 0.4% decline in income and a 0.9% drop in spending. In other words, income didn’t drop as much as expected, but spending was slower than forecasted. These readings, along with downward revisions to November’s results have prevented this report form influencing this morning’s mortgage pricing.

The Institute of Supply Management’s (ISM) manufacturing index was today’s other releas e. It showed a reading of 35.6, up from December’s revised 32.9 reading. This indicates that surveyed manufacturers were more optimistic about business conditions the last two months than many had thought. This is considered negative news for bonds because rising levels of sentiment could mean that the manufacturing sector may have reached bottom. However, this was the 12th consecutive month of a reading below 50 that means more surveyed business executives felt business worsened than those who felt it had improved, which is a recession sign.

There is no relevant news scheduled for release tomorrow. There is a report Wednesday that has the potential to influence the markets and mortgage rates but quite often is a non-factor. The ISM will release their services sector index late Wednesday morning. It is similar to today’s manufacturing index but tracks the service sector. If it shows a significant surprise, it may affect bond trading enough to slightly chan ge mortgage rates. However, more times than not its results do not affect rates.

Overall, look for a fairly active week in the markets and mortgage rates. Friday will likely be the most important day of the week due to the influence the Employment report has on the markets. But, as we have seen lately we don’t necessarily need economic news for mortgage rates to move significantly. Therefore, it would be a good idea to maintain contact with your mortgage professional the next few days.

Rate Lock Advisory – Friday Jan. 2nd

Friday’s bond market has opened flat despite weaker than expected economic news. The stock markets are starting the new year in positive ground with the Dow up 122 points and the Nasdaq up 22 points. The bond market is currently almost unchanged from Wednesday’s close, but we will likely still see an increase in this morning’s mortgage rates of approximately .250 of a discount point.

Today’s only economic news was the Institute for Supply Management’s (ISM) manufacturing index. It showed a reading of 32.4, which was its lowest reading since June 1980. Analysts were expecting to see a reading of 35.4, meaning that manufacturer sentiment was weaker than many had thought. This is favorable news for bonds but due partly to this morning’s stock gains, this data has failed to push mortgage rates lower.

The bond market will close early again today, therefore, I don’t believe we will see much of an improvement in today’s rates. In fact, we may see so me additional pressure on bonds as traders close the shortened week. This may lead to upward revisions to mortgage rates before today’s 2:00 PM close.

Next week is fairly busy in terms of economic releases. There is no relevant news scheduled for release Monday, but the rest of the week brings us the release of several reports that may affect mortgage rates including December’s Employment report next Friday. 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… 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.

Wednesday’s bond market has opened in negative territory as investors prepare for today’s FOMC minutes. The stock markets are posting another round of losses with the Dow down 97 points and the Nasdaq down 8 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.

There was no relevant economic news posted today. The only relevant news we really need to worry about are the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about what the Fed’s next move will be. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.

Tomorrow brings us no relevant economic data except for weekly unemployment claims from the Labor Department. T hey are expected to report that 372,000 new claims for benefits were filed last week. However, since this data tracks only a week’s worth of numbers, it likely will not influence mortgage rates unless it varies greatly from forecasts.

I would not be surprised to see stock prices continue to fall over the next few days. They seem to be reacting to high oil prices. If this is true, we should see funds shift into bonds as a safe haven, leading to improvements in mortgage rates. Accordingly, I am holding the float recommendations for short and longer periods for the time being.

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 o nly 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 following early stock weakness. The stock markets are showing losses with the Dow down 106 points and the Nasdaq down 8 points. The bond market is currently up 9/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

March’s Goods and Services Trade Balance report was today’s only economic data on the calendar. It revealed a $58.2 billion trade deficit that was well below forecasts. However, this data is not considered to be of high importance to the bond market or mortgage rates and therefore has had little impact on the markets today.

This was a light week for economic releases, so I did not expect to see much fluctuation in the markets and mortgage rates. I still feel bond yields are at the upper end of a cycle and that stock prices have more room to fall. I am expecting stocks to move lower, making bonds more attractive to investors. This shou ld lead to funds shifting out of stocks and into bonds in the near future. Accordingly, I am holding the float recommendations for the time being.

Next week is busier in terms of economic reports than this week was. Generally speaking, it will be an average week with five relevant reports on tap. However, two of those are considered to be very important to the markets and mortgage rates. There is no relevant news scheduled for release Monday, but look for details on next week’s event 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 inter est of all/any other borrowers.