Daily Mortgage Rate Lock Advisory

This week brings us the release of four reports that may influence mortgage rates, but only one of them is considered to be highly important. With no relevant auctions or speeches on tap, I suspect we will see much less movement in mortgage rates this week compared to the past couple of weeks. There is no relevant data scheduled for release tomorrow, so look for the stock markets to drive bond trading and mortgage rates.

There are two reports scheduled to be posted Tuesday morning. The first is July’s Producer Price Index (PPI) that gives us an indication of inflation at the producer level of the economy. There are two readings in the report- the overall index and the core data reading. The core data is more important because it excludes more volatile food and energy prices that can change significantly from month to month. Current forecasts call for a decline of 0.2% in the overall and a 0.1% increase in the core data reading. A larger increase in the core data could push mortgage rates higher Tuesday morning. If it reveals weaker than expected readings, we may see mortgage rates improve as a result.

The second report of the day is July’s Housing Starts data. This report gives us an indication of housing sector strength and mortgage credit demand. However, it isn’t considered to be of high importance to the bond market or mortgage pricing and usually doesn’t cause much movement in mortgage rates unless it varies greatly from forecasts. It is the least important of the week’s reports and is e= xpected to show an increase in construction starts of new homes. The lower the number of starts the better the news for bonds as it would indicate a weaker than expected housing sector.

The Conference Board will give us the its Leading Economic Indicators (LEI) for July late Thursday morning. This index attempts to measure economic activity over the next three to six months and is considered to be moderately important. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening more than thought. However, a weaker than expected reading means that the economy may not grow as much as predicted, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates Thursday if the stock markets remain calm. Current forecasts are calling for an increase of 0.6% in the index, indicating economic growth over the next couple of months.

July’s Existing Home Sales will close out the week’s data Friday morning. The National Association of Rea= ltors will release this report, giving us a measurement of housing sector strength. It covers approximately 85% of home sales in the U.S., but usually does not have a major influence on bond trading and mortgage rates unless it varies greatly from analysts’ forecasts. It is expected t= o show an increase from June’s sales, meaning the housing sector is strengthening.

Overall, look for Tuesday to be the busiest day of the week with the PPI being released. The rest of the week will likely be influenced more by stock prices than anything else, which may be quite volatile. Therefore, keep an eye on the markets and maintain contact with your mortgage professional if you have not locked an interest rate yet.
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.

Thursday’s bond market has opened in positive territory following much weaker than expected consumer spending news. The stock markets are showing minor gains with the Dow up 27 points and the Nasdaq up 10 points. The bond market is currently up 15/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point. Preventing a slightly larger improvement in rates was weakness late yesterday after the FOMC meeting.

The Commerce Department announced this morning that retail level sales fell 0.1% last month. This was well off forecasts of a 0.7% increase, meaning that consumers were spending much less than expected. Even if volatile auto-related sales are excluded, sales fell much more than expected. This is very good news for the bond market and mortgage rates because consumer spending makes up two-thirds of the U.S. economy. If consumer spending is still falling, the broader economic recovery cannot be close. Generally speaking, a weak economy is a better environment for bonds and makes mortgage-related bonds more attractive to investors.

Also posted this morning were weekly unemployment figures from the Labor Department. They reported that 558,000 new claims for benefits were filed last week. This was an increase from the previous week, but more importantly, analysts were expecting to see a decline in new claims. However, since this data basically tracks only a week’s worth of claims, it usually has little impact on mortgage rates and has not influenced trading this morning.

Early this afternoon we will get the results of today’s 30-year Bond auction. This sale is not as important to mortgage rates as yesterday’s 10-year sale was. But if the auction is met with an overly strong demand from investors or a particularly weak interest, we may see bond prices move enough during afternoon trading to cause revisions to mortgage rates. The results will be posted at 1:00 PM ET.

Tomorrow morning brings us the release of three reports. The first is July’s Consumer Price Index (CPI) at 8:30 AM. The CPI is one of the most important reports we see each month. It measures inflation at the consumer level of the economy. There are two readings in the report- the overall index and the core data reading. The more important of the two is the core data because it excludes more volatile food and energy prices. Current forecasts call for no change in the overall index and a 0.1% increase in the core data reading. Declines in the readings, especially in the core data, should lead to a bond rally and lower mortgage rates. However, stronger than expected readings will likely cause a spike in mortgage pricing tomorrow.

The remaining two pieces of data are relevant to mortgage rates but not nearly important as the CPI is. The second report of the day is Industrial Production data for July. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be of moderately high importance and may cause movement in mortgage rates. Analysts are currently expecting to see a 0.4% increase in production between June and July. A larger increase in output could lead to higher mortgage rates tomorrow, but only if the CPI’s results are a non-factor in rates.

The last report of the day will come from the University of Michigan who will release its Index of Consumer Sentiment for August at 9:45 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably help boost bond prices. If the index rises, indicating that confidence is rising and spending is likely to continue, we may see mortgage rates move higher Friday morning. However, this is the least important of the day’s three reports and will probably have the least impact on 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.

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.

Wednesdays bond market has opened in negative territory as yesterday’s selling carries into today. The stock markets are showing losses with the Dow down 76 points and the Nasdaq down 20 points. The bond market is currently down 5/32, which with yesterday’s weakness should push this morning’s mortgage rates higher by approximately .375 of a discount point.

The Commerce Department said this morning that June’s Factory Orders data rose 0.4%. This was a little stronger than revised forecasts had called for, but has had little impact on today’s trading. The data is not considered to be highly important and traders are looking towards Friday’s release for major news on the economy.
There is no relevant monthly or quarterly economic news scheduled for release tomorrow. The Labor Department will give us last week’s unemployment figures early tomorrow morning, but this data is considered to be of low importance to the markets. It will not impact bond trading or mortgage rates unless we see a significant variance from the 580,000 new claims for benefits that analysts are expecting to see.

The most important piece of data this week and arguably each month is the monthly Employment report that will be posted Friday morning. This report gives usthe 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.  While the GDP is arguably the single most important report in general, it is posted quarterly rather than monthly like the Employment report. Friday’s report is expected to show that the unemployment rate rose to 9.6% last month 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 Friday morning if they vary 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…

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 – Tuesday Mar. 24th

Tuesday’s bond market has opened in negative territory with no relevant data scheduled for release today. The stock markets are showing minor losses compared to yesterday’s significant rally with the Dow down 42 points and the Nasdaq down 14 points. The bond market is currently down 9/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

Today’s selling does not completely surprise me. After the size of last week’s rally, there is still room for profit taking so that traders can capture the gains from that rally. They also need to prepare for upcoming economic reports, beginning with next week’s highly important data. With this being a fairly uneventful week in terms of expected announcements and the level of importance of the economic news on tap, traders are taking the opportunity to reposition their portfolios and prepare for the next few weeks.

There are two reports scheduled for release tomorrow. The first is the week’s most important and comes from the Commerce Department. They will release February’s Durable Goods Orders early tomorrow morning. This 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 2.4%. A smaller decline would be considered a negative for bonds and could lead to higher mortgage rates tomorrow morning.

The second of the day will be released at 10:00 AM ET. February’s New Home Sales report is expected to show a small decline in sales of newly constructed homes. But with tomorrow’s report covering only approximately 15% of all home sales, its result will likely have less of an impact on mortgage rates than yesterday’s Existing Home Sa les report did.

Thursday and Friday bring us the release of a couple of moderately important reports. Thursday’s final reading to the 4th Quarter GDP will likely not influence trading or mortgage rates much. Friday’s Personal Income and Outlays data, along with the revised reading to this month’s University of Michigan Index of Consumer Sentiment are a little more important to rates than Thursday’s report is, but both are generally considered to be only moderately important. In other words, it will likely take a large variance from forecasts for them cause a noticeable change in mortgage rates.

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 fin ancing 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 – Monday Mar. 23rd

Monday’s bond market has opened fairly flat despite an early stock rally. The stock markets are reacting favorably to the release of details of the Fed’s plan for relieving banks of their bad holdings in mortgage related securities. The result is the Dow currently up 283 points and the Nasdaq up 52 points. The bond market is nearly unchanged from Friday’s close, which will likely keep this morning’s mortgage rates close to Friday’s levels.

The National Association of Realtors announced late this morning that home resales rose 5.1% last month, greatly exceeding analysts’ forecasts. This report was expected to show a small decline in sales, meaning that the housing market was much more active than many had thought. However, offsetting that news was a large decline in sales prices. This means that even though sales activity rebounded, home prices are still falling. Regardless, this data is not considered to be of high importance and therefore has had little impact on this morning’s trading or mortgage pricing.

There is no relevant economic data scheduled for release tomorrow. Wednesday’s important report comes from the Commerce Department, who will post February’s Durable Goods Orders. This 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 2.4%. A smaller decline would be considered a negative for bonds and could lead to higher mortgage rates Wednesday morning.

Also scheduled for release Wednesday is February’s New Home Sales report. It is expected to show a small decline in sales of newly constructed homes, but some analysts are revising forecasts after seeing this morning’s Existing Home figures. But with tom orrow’s report covering only approximately 15% of all home sales, its result will likely have less of an impact on mortgage rates than today’s data did.

Overall, it is difficult to label one particular day as the most important of the week. The single most important report will likely be tomorrow’s Durable Goods Orders, but none of the week’s data has the potential to be a major market mover. I would like to say that this may be a relatively calm week for mortgage rates, but as we have seen recently, a lack of important releases does not mean we will not see volatility in the markets and rates. Therefore, I recommend not letting our guard down, particularly 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… 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 closin g 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 – 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

Rate Lock Advisory – Thursday Mar. 5th

Thursday’s bond market has opened strong following early stock weakness. The major stock indexes are showing significant losses after yesterday’s rally. The Dow is currently down 230 points while the Nasdaq is down 42 points. The bond market is currently up 34/32, but we will likely see an improvement in this morning’s mortgage rates of only .125 – .250 of a discount point.

This morning’s economic news gave us results that were not favorable to bonds and mortgage rates. The Productivity revision revealed a much lower level of worker output than was expected. Today’s report showed a decline in output of 0.4% compared to the increase of 1.0% that was forecasted and the 3.2% gain that was estimated last month. It also showed a significant upward revision to the Unit Labor Costs portion of the report that raises wage inflation concerns. Even though this report is of medium importance to the markets, the revised readings are somewhat surprising.

The second report of the morning wasn’t much better either. The Commerce Department reported that Factory Orders fell 1.9% in January. This was stronger than analysts’ revised forecasts of a 3.5% decline, but today’s reports also revised December’s orders lower by 1.0%. That seemed to have offset the higher than expected reading, but this report is also considered to be of medium importance so its impact has been relatively minimal.

The Labor Department reported that 639,000 new claims for benefits were filed last week. This was lower than expected and a decline from the previous week’s total.

Tomorrow morning brings us February’s Employment report at 8:30 AM ET tomorrow. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a large drop in pa yrolls and little or no increase in earnings. Current forecasts are calling for 0.3% increase in the unemployment rate to 7.9% and approximately 650,000 jobs lost during the month.

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.

Rate Lock Advisory – Sunday Mar. 1st

This week brings us the release of six economic reports to be concerned with. Two of the reports are considered to be very important, but nearly all of the week’s releases have the potential to affect mortgage rates. With reports being posted each day except Tuesday, we will likely see a fairly active week in mortgage rates.

The week’s first data comes tomorrow morning with the release of two relevant reports. The first is January’s Personal Income ad Outlays data at 8:30 AM ET, which gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for a decline in income of 0.2% while spending is expected to rise 0.42%. A larger than expected increase in spending would be bad news for the bond market and could drive mortgage rates higher. Weaker than forecasted numbers should help push mortgage rates slightly lower tomorrow.

The Institute for Supply Management (ISM) will release their manuf acturing index for February late tomorrow morning. This index measures manufacturer sentiment and can have a pretty large impact on the financial and mortgage markets if it varies from forecasts. It is expected to show a decline from January’s 35.6 to 34.0 last month. This is important because a reading below 50.0 is a recession indicator, meaning that more surveyed manufacturers felt business worsened during the month than those who felt it had improved. If we see a weaker than expected reading, the bond market could rally. However, a higher than forecasted reading could lead to major selling in bonds, causing mortgage rates to rise.

The Fed Beige Book is the next report scheduled for release and it will be posted Wednesday afternoon. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading Wednesday. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

There two reports scheduled for release Thursday morning. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed an annual rate of 3.2% increase in worker output. Analysts are expecting to see a sizable downward revision to the initial reading. It is expected to be cut to a 1.6% increase in output, meaning workers were not as productive as previously thought during the quarter. Employee productivity is watched fairy closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns.

January’s Factory Orders will be posted late Thursday morning, which will give us a measurement of manufacturing sector strength. This data is similar to last week’s Durable Goods, except this report covers orders for both durable and non-durable goods. Current forecasts are calling for a drop in new orders of approximately 2.1%. A larger than expected drop would be good news for the bond market and could lead to an improvement in mortgage rates.

The biggest news of the week comes Friday morning when one of the single most important monthly reports we see will be posted. The Labor Department will release February’s Employment report at 8:30 AM ET Friday. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a large drop in payrolls and little or no increase in earnings. Current forecasts are calling for 0.3% increase in the unemployment rate to 7.9% and approximately 615,000 jobs lost during the month.

Overall, look for a fairly active week for mortgage rates. I suspect there will be some optimism leading up to Friday’s Employment report, which is of concern to me. I believe the market is expecting to see very weak numbers Friday morning and has already built that into current pricing. The problem is that if it meets forecasts, or is even slightly stronger than expected, we could see bonds drop and mortgage rates rise. Because of this, I may be extending the lock recommendation to longer periods before Friday’s data. Friday is undoubtedly the biggest day of the week, but tomorrow may also bring noticeable movement in mortgage rates. Please be careful this week 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… 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 m y 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 – Sunday Feb. 15th

There are five economic reports worth watching this week that are likely to affect mortgage rates in addition to the minutes from the last FOMC meeting. The financial markets are closed tomorrow in observance of the President’s Day Holiday and will reopen Tuesday morning. You may find some lenders to be open for business tomorrow, but I would not expect to see new rates issued until Tuesday.

Wednesday brings us three releases, including the week’s least important of the five economic reports. January’s Housing Starts will be posted early Wednesday morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless it varies greatly from forecasts. Current forecasts are calling for a decline in starts of new housing.

January’s Industrial Production data will be released mid-morning Wednesday. It gives us a measurement of manufacturing sector strength by tracking ou tput at U.S. factories. Mines and utilities and can have a moderate impact on the financial markets. Analysts are expecting to see 1.4% decline in production from December to January. A larger than expected decline in output would be good news and should push bond prices higher, lowering mortgage rates Wednesday.

The minutes from last FOMC meeting will be released Wednesday afternoon. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. However, with little likelihood of the Fed making a change to key short-term rates anytime soon, these minutes will likely not heavily influence trading or lead to a change in mortgage rates Wednesday afternoon.

The Labor Department will post their Producer Price Index (PPI) for January early Thursday morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. It is expected to show small increases in both readings, indicating that inflation is not a threat. Good news for bonds would be a decline in both readings, particularly the core data.

Also Thursday morning will be the release of the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show no change, meaning that economic activity may be flat in the near future. A decline would be good news for the bond market and mortgage rates.

The Labor Department will release January’s Consumer Price Index (CPI) at 8:30 AM ET Friday, which measures inflationary pressures at the very important consumer le vel of the economy. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially long-term securities such as mortgage-related bonds. It is expected to show a 0.3% increase in the overall index and a 0.1% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall.

Overall, the most important day of the week will likely be Friday with the CPI being released, but Wednesday and Thursday may also be active days for mortgage rates. Tuesday’s opening will also be interesting with it being the first trading day since the approval of the President’s economic stimulus package. In other words, be prepared for an active week in the markets and mortgage rates.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking pla ce 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.