Speech at the Cleveland Clinic "Ideas for Tomorrow" Series, Cleveland, Ohio

Daily Rate Lock Advice for 12/30/2011

Thursday’s bond market has opened in depressing territory following the release of much stronger than expected trade and industry data. The stock markets have had little answer to the news with the Dow up 9 points and the NASDAQ down 2 points. The bond market is currently down 9/32, but we will still see a noticeable step up in this morning’s mortgage interest rates due to strength late yesterday. If comparing to yesterday’s morning interest rates, we should see an increase of approximately .375 of a discount point.

The Labor Department said early this morning that 388,000 new claims for joblessness reimbursement were filed last week. This was well below forecasts of 416,000 and the lowest total since July 2008. At first appearance, the headline number could be concerning for the bond market and good news for stocks. The size of the drop and the number of new claims hints at a strengthening employment sector. In fact, the number of weekly new claims has risen only once in the past 6 weeks.

That said the markets have not had a significant reaction to the data for a couple of reasons. First and primarily, the data covers only a single week’s worth of new claims. Another portion of the report showed that the number of continuing claims for reimbursement (claims that are not new) rose during the week when analysts were expecting them to remain flat. Also, the reason for the drop in new claims could be the Christmas Holiday last week where state offices were closed at least one of the five days. So, while the headline number of 388,000 does draw attention, it comes from a report that does not carry significant importance because of the short term it covers and were statistics from a holiday-shortened week.

We saw bonds rally late in the day yesterday, partly as a result of a 7-year Note auction that went surprisingly well. Several of the measurements we use to gauge the success of the auctions showed fairly strong investor demand, especially if comparing to Tuesday’s 5-year Note sale. After the results of yesterday’s sale were posted, bonds moved higher causing some lenders to revise mortgage interest rates lower.

There is no relevant monetary data scheduled for release tomorrow. It is the last trading day of the year, so we may see a little unpredictability as investors look to finalize their year-end holdings. We may actually see some of that take place this afternoon, so don’t be surprised to see movement in the markets this afternoon. But there is not much disquiet that we will see sizable changes to mortgage interest rates. Keep in mind that the bond market will close at 2:00 PM ET tomorrow and will reopen Monday for regular hours. The stock markets will not be recognizing the holiday with regular trading hours both tomorrow and Monday.

If you are considering financing/refinancing a home, you should…. Lock if your closing takes place within 7 days… Lock if your closing takes place between 8 and 20 days… Float if your closing takes place between 21 and 60 days… Float if your closing takes place over 60 days from now…

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.

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 – 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 – Tuesday Mar. 17th

Tuesday’s bond market has opened up slightly despite stronger than expected economic news. The stock markets have fluctuated between positive and negative territory during early morning as they look for direction. They are currently showing small gains with the Dow up 20 points and the Nasdaq up 17 points. The bond market is currently up 5/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

Today’s big news came from the Labor Department who reported that February’s Producer Price Index (PPI) rose only 0.1% compared to a forecast of 0.4%. That was the good news because it means that inflationary pressures at the producer level of the economy were lower than thought. The bad news came from the core reading that excludes more volatile food and energy prices. It was expected to rise only 0.1% last month but actually rose 0.2%. This means that core prices were higher than analysts thought, but fortunately n ot enough to create a sell atmosphere in the bond market.

February’s Housing Starts were also released this morning, revealing an unexpected spike in construction starts of new homes. Today’s report showed a 22% jump in starts of new homes when analysts were expecting to see a decline for the ninth consecutive month. This surprise is good news for the housing market, which can be translated as bad news for bonds, but since it is considered one of the less important reports we see each month, its impact on today’s trading and mortgage rates has been minimal.

Tomorrow morning brings us the release of February’s Consumer Price Index (CPI), which measures inflationary pressures at the very important consumer level of the economy. Its results can definitely 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 impor tant core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall tomorrow.

The FOMC meeting that began today and will adjourn at 2:00 PM ET tomorrow. With key short-term interest rates practically at 0% already, there is not much the Fed can do with monetary policy at this meeting. They have previously stated that they expect rates to remain near zero for some time. Therefore, the anxiety of the post-meeting statement should be minimal and the likelihood of a major market reaction to the statement is reduced significantly. If the statement references a time frame of an economic recovery, we may see the markets react if it reveals any surprises. Other than that, I am not expecting too much movement in mortgage rates tomorrow afternoon.

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 2 0 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 – Monday Mar. 16th

Monday’s bond market has opened flat with the stock markets mixed during early trading. The Dow is currently up 48 points while the Nasdaq has lost 9 points. The bond market is currently nearly unchanged from Friday’s close, but we will still likely see an increase in this morning’s mortgage rates of approximately .250 of a discount point due to weakness Friday.

Today’s only relevant economic news was February’s Industrial Production report. It showed a drop in output at U.S. factories, mines and utilities of 1.4% last month. This was a little weaker than expected but indicates that manufacturing activity was slightly softer than thought. That is good news for bonds and mortgage rates, but not enough to spur a bond rally.

The Labor Department will post February’s Producer Price Index (PPI) early tomorrow morning. This index measures inflationary pressures at the producer level of the economy. There are two portions of the index- the overall rea ding and the core data. The core data is more important and watched more closely because it excludes more volatile food and energy prices. If the index shows a large increase, inflation concerns may rise, making long-term investments such as mortgage-related bonds less attractive to investors. This would lead to higher mortgage rates tomorrow morning. Current forecasts are calling for a 0.4% rise in the overall reading and a 0.1% increase in the core data.

Also tomorrow is the release of February’s Housing Starts, but it will likely not have much of an impact on mortgage rates. It gives us a measurement of housing sector strength and future mortgage credit demand, but is usually considered to be of low importance to the financial markets. It is expected to show a decline in new starts from January to February.

Overall, look for Wednesday to be the most important day of the week due to the CPI release. Tomorrow may also be an active day for rates with t he PPI on tap. But the wildcard is whether stocks continue last week’s gains or if they move lower again. Stock strength would likely draw funds from bonds and lead to higher mortgage rates. However, if the major indexes fall again, funds may shift into bonds, leading to lower 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 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 – Wednesday Mar. 4th

Wednesday’s bond market has opened well into negative territory following a strong opening in stocks. The stock markets are rallying with the Dow up 150 points and the Nasdaq up 32 points. The bond market is currently down 28/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

There were no important economic reports scheduled for release this morning. The Fed will release its Beige Book at 2:00 PM ET today. 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 tomorrow. 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 are two important reports scheduled for release tomorrow m orning. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed a 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. The Unit Labor Costs reading is expected to be revised higher to 3.4%. Employee productivity and costs are watched fairy closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns, while increases in employee costs do raise inflation fears.

January’s Factory Orders will be posted late tomorrow 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.

We also will get weekly unemployment numbers from the Labor Department, but I am not expecting them to heavily influence bond trading or 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 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 Feb. 17th

Tuesday’s bond market has opened up sharply as economic concerns and strong stock weakness has brought bonds into favor this morning. The Dow is currently down 243 points while the Nasdaq has lost 43 points. The bond market is currently up 58/32, but we will likely see an improvement of .250 – .375 in this morning’s mortgage rates.

There are no relevant economic reports scheduled for release today. 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. Tomorrow brings us three of those releases, including the week’s least important. January’s Housing Starts will be posted early tomorrow 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 da ta will be released mid-morning tomorrow. It gives us a measurement of manufacturing sector strength by tracking output 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 tomorrow.

The minutes from last FOMC meeting will be released tomorrow 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 during afternoon trading.

Overall, the most important day of the week will likely be Friday with the CPI being released, but tomorrow and Thursday may also be active days for mortgage rates. There is a strong likelihood of seeing an active week for mortgage rates.

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.

Rate Lock Advisory – Monday Feb. 9th

Monday’s bond market has opened in negative territory as investors prepare for this week’s sales and speeches by President Obama and Fed Chairman Bernanke. The stock markets are showing losses with the Dow down approximately 15 points and the Nasdaq down 3 points. The bond market is currently down 10/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

There are only three pieces of economic data scheduled to be posted this week along with a couple of Treasury auctions and relevant speeches from highly important speakers. Only one of the three reports are considered to be of high importance while one is moderately important. The third is not considered to be of much importance unless it varies greatly from forecasts.

None of the economic reports were posted today. However, President Obama will address the nation on national television this evening. He will likely speak about his economic r ecovery plan amongst other important topics. What he says may heavily influence trading tomorrow morning. It is very difficult to predict whether the markets are likely to react favorably to his words or negatively. But I am expecting to see volatility tomorrow morning.

Fed Chairman Bernanke will be speaking before the House Financial Services Committee tomorrow at 1:00 PM ET. He is expected to testify and update the panel on the Fed’s liquidity injections and future plans. His words could create movement in the markets and possibly mortgage pricing during afternoon trading.

There is no relevant data scheduled for release until Wednesday morning. This is when the week’s least important data, December’s Goods and Services Trade Balance, will be posted. This report measures the U.S. trade deficit and can affect the value of the U.S. dollar versus other currencies, but it usually does not cause enough movement in bond prices to affect mortgage rates.

Overall, it is difficult to peg a particular day as the most important of the week. Tomorrow will be quite interesting with the reaction to President Obama’s words from tonight and Fed Bernanke’s testimony on the Fed’s attempts to stabilize the financial system. The single most important piece of economic news comes Thursday, so that day needs to be given much weight also. Throw in the fact that there is an early close Friday due to the President’s Day holiday next Monday, and we have the makings of an interesting week ahead of us.

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 b e in the best interest of all/any other borrowers.

Rate Lock Advisory – Wednesday Feb. 4th

Wednesday’s bond market has opened in negative territory again as investors prepare for the upcoming debt sales the Treasury announced. The stock markets are showing moderate gains with the Dow up 23 points and the Nasdaq up 25 points. The bond market is currently down 9/32, which will likely push this morning’s mortgage rates slightly higher.

Today’s only economic news was the Institute for Supply Management’s (ISM) service index. It showed a reading of 42.9 that was higher than expected, meaning the service sector was more optimistic about business conditions last month than in December. It also was a higher reading than was expected, but fortunately not enough to affect this morning’s mortgage rates.

There are two pieces of important data scheduled for release tomorrow. The first is December’s Factory Orders data and is similar to last week’s Durable Goods Orders report except this one tracks new orders for both durable and non-durable goods . Current forecasts are calling for a decline in new orders of 3.0%. A large variance from forecasts could lead to changes in mortgage pricing.

The second report of the day is Productivity and Costs data for the 4th Quarter. Since a high level of productivity is thought to allow economic growth without inflationary concerns, this data can cause enough movement in the bond market to affect mortgage rates. If it varies greatly from analysts’ forecasts of a 1.0% increase, we may see some movement in mortgage rates tomorrow.

Also on tap for tomorrow are weekly unemployment claims from the Labor Department. With January’s monthly statistics due out Friday morning, traders will be watching the data to help predict Friday’s monthly numbers. Current forecasts are calling for 592,000 new claims. The larger the number the better scenario for mortgage rates.

If I were considering financing/refinancing a home, I would…. Lock if my closing was takin g 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 – Thursday Jan. 29th

Thursday’s bond market has opened in negative territory, continuing yesterday afternoon’s selling. The stock markets are also showing losses as they give back a good portion of yesterday’s gains. The Dow is currently down 154 points while the Nasdaq has lost 36 points. The bond market is currently down 8/32, which will push this morning’s mortgage rates approximately .125 – .250 higher than yesterday’s revised rates. This should equate to approximately .500 of a discount point higher than yesterday’s morning rates.

This morning’s economic data actually gave us favorable results. The Commerce Department said that new orders for big-ticket items, or Durable Goods, fell 2.6% last month. This was a larger than expected decline, but making the news even better was a significant reduction to November’s orders that was revised from down 1.0 to down 3.7%. This means that orders for products that are expected to last or more years were lower than expected. This is considered good news for bonds because it indicates a still weakening manufacturing sector.

December’s New Home Sales report was also posted this morning, revealing a sharp decline in sales of newly constructed homes. The 14.7% drop in December’s sales were the weakest level of sales since records started being kept on them in 1963. This indicates a still softening housing sector that is generally good news for bonds.

There are three reports scheduled for release tomorrow. The first is one of the most important reports that we see regularly. The initial reading of the 4th Quarter Gross Domestic Product (GDP) will be posted early tomorrow morning. This data is so important because it is considered to be the best measure of economic growth. The GDP itself is the total sum of all goods and services produced in the United States. Its’ results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. There are three readings to each quarter’s activity, each released approximately one month apart. The first, which usually carries the most volatility, is expected to be a decrease of 5.4%. A weaker reading would be great news for the bond market, but the 5.4% decline would be the biggest quarterly drop in 26 years.

The 4th Quarter Employment Cost Index (ECI) is also scheduled for release early tomorrow morning. It measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. It usually has more of an effect on the bond market than the stock markets. Current forecasts are showing an increase of 0.7%. A lower than expected reading would be favorable to bonds and mortgage rates, but the GDP reading will be the biggest influence on trading and rates tomorrow morning.

The last report of the week is the revised reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer co nfidence, which is thought to indicate consumer willingness to spend. I don’t see this data having much of an impact on the markets or mortgage rates due to the importance of the employment index and GDP figures. It is expected to show no change from the preliminary reading of 61.9.

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 – Wednesday Jan. 28th

WEDNESDAY AFTERNOON UPDATE:

Today’s FOMC meeting adjourned with no change to key short-term interest rates, keeping the benchmark Fed Funds Rate near 0%. The stock markets rallied following the adjournment, pushing the Dow up 200 points and the Nasdaq higher by 53 points on the day. The bond market soured though, driving bond prices lower that pushed yields and mortgage rates higher. Overall, we can expect to see an increase in tomorrow’s mortgage rates of approximately .375 of a discount point unless the morning’s data offsets those losses or pushes them higher.

The post meeting statement did give us some insight into what actions the Fed may take to help boost economic activity since this rate can’t be lowered any further. They indicated that they were ready to buy longer-term government securities such as the 10-year Treasury Note and 30 year Bond if they felt that it would generate lending. This is actually good news as it creates another buyer for all the debt that could some to market to pay for the stimulus package currently being considered. Unfortunately, the statement was not very definitive, more or less saying that it is an option available not a commitment to do so.

The statement also hinted at the Fed’s forecast for the economy, saying that significant risks still remain but that a ?gradual recovery? could begin late this year. In other words they expect the economy to continue to slow for most of the year before slowly rebounding. That is actually fairly favorable news for bonds, but traders apparently were disappointed by the lack of solid details of what the Fed will do, particularly regarding the possibility or likelihood of buying government securities. The result was a weak afternoon for bonds and a likely upward revision to mortgage pricing.

Tomorrow morning brings us the release of December’s Durable Goods Orders. This data helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show a decline in orders of 2.0%. A larger than expected drop would be good news for bonds and mortgage rates.

December’s New Home Sales report, the sister release to Monday’s Existing Home Sales, will be posted late tomorrow morning. It is expected to show another decline in sales of new homes, but is not important enough to heavily influence mortgage pricing.

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 guaran teed to be in the best interest of all/any other borrowers.

Rate Lock Advisory – Monday Jan. 26th

Monday’s bond market has opened in negative territory following stronger than expected economic news and early stock gains. The Dow and Nasdaq are kicking the week off in positive ground with the Dow up 65 points and the Nasdaq up 18 points. The bond market is currently down 9/32, but we will likely see an improvement in this morning’s rates of approximately .125 – .250 of a discount point due to strength late Friday.

There were two reports posted this morning that are somewhat relevant to mortgage pricing. The first was December’s Existing Home Sales from the National Association of Realtors. It showed an unexpected increase of 6.5% in the number of home resales last month, but it also indicated that home prices continue to fall. These are mixed results for the bond market, but since the data is not considered to be of high importance, its impact on this morning’s mortgage rates has been minimal.

December’s Leading Economic Indicators (LEI) was also posted this morning, revealing an increase of 0.3% in the index. This means that the indicators are pointing towards an increase in economic activity over the next three to six months. This is considered bad news for bonds because it was expected to show that economic activity would continue to fall.

Tomorrow morning brings us the release of January’s Consumer Confidence Index (CCI). It is considered to be of high-importance to the bond market and therefore can move mortgage rates. It is an indicator of consumer sentiment, which is important because a decline would be construed as a sign that consumers may be less willing to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, market participants are very attentive to related data. A reading smaller than the expected 39.0 would be ideal for the bond market and mortgage rates.

There is no factual economic data scheduled for release Wednesday, bu t we will get the results of this year’s first FOMC meeting. It will begin tomorrow and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to short-term interest rate, but as is often the case, traders will be looking for any indication of the Fed’s next move. However, I am not expecting this meeting to have a major impact on the markets or mortgage rates because the Fed can’t lower key rates much more. There is little chance of indicating a possible rate hike in the near future, so I don’t believe that this meeting will have the influence they usually do.

Overall, look for tomorrow or Friday to be the biggest days for mortgage rates. Friday’s GDP is the single most important piece of data this week, but we may see quite a bit of movement in rates tomorrow also. If we see weaker than expected results from the most important reports, we should see rates close the week much lower than last Friday’s closing levels. If the data shows stronger than ex pected results, we may see mortgage rates move higher again this week. This is of course, assuming that the Fed meeting doesn’t reveal any surprises. I strongly recommend that fairly constant contact is maintained with your mortgage professional this week if still floating an interest rate.

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.

Rate Lock Advisory – Wednesday Jan. 21st

Wednesday’s bond market has opened in negative territory again as investors continue to fret about upcoming debt sales. The stock markets are rebounding somewhat from yesterday’s sell-off with the Dow up 77 points and the Nasdaq up 20 points. The bond market is currently down 15/32, which will likely push this morning’s mortgage rates higher by another .250 of a discount point.

There is no relevant economic news scheduled for release today. Tomorrow brings us the release of both of this week’s only reports. Neither are considered to be of high importance to the markets, but they are the week’s only factual releases. Therefore, they may influence trading enough to slightly affect mortgage pricing.

The first is December’s Housing Starts report early tomorrow morning. It gives us an indication of housing sector strength and future mortgage credit demand, but it is not considered to be a heavy influence on bond trading. It is expected to show a d ecline in starts of new homes from November’s level.

The second is weekly unemployment figures from the Labor Department. They are expected to say that 548,000 new claims for benefits were filed. This would be an increase from the previous week, which would be considered favorable for bonds. If the report shows a much smaller number of claims, we may see bond prices fall and mortgage rates move higher again. However, a larger than expected number may lead to slightly lower mortgage rates tomorrow morning.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… 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 a ll/any other borrowers.

Rate Lock Advisory – Sunday Jan. 18th

This holiday-shortened week brings us the release of only one monthly economic report for the markets to digest and it is not considered to be of high importance. This will likely leave the stock markets to be a major influence on bond trading and mortgage rates a good part of the week. Whether this is good or bad news for bonds depends if stocks rally or fall. If stocks move higher, bonds will likely suffer, leading to higher mortgage rates. However, if stocks show weakness, funds may shift into bonds, driving mortgage rates lower.

The financial markets are closed tomorrow in observance of the Martin Luther King Holiday. They will reopen Tuesday morning for regular trading hours. I don’t believe many mortgage lenders will be open tomorrow, but any that are will likely use Friday’s rates or not allow a rate to be locked tomorrow.

Tuesday is Inauguration Day and while I don’t believe the ceremony or President Obama’s speech will directly affect the m arkets or mortgage rates, it does bring in the new administration, new policies and new theories. Those changes could come into play in the coming weeks and likely influence mortgage rates. Issues such economic stimulus and recovery along with tax and deficit news could create significant volatility in the markets and therefore mortgage pricing.

The week’s only relevant monthly economic data is December’s Housing Starts report early Thursday morning, but I don’t see it causing much movement in mortgage rates. This report gives us an indication of housing sector strength and future mortgage credit demand, but it is not considered to be a heavy influence on bond trading.

Also Thursdays is the Labor Department’s weekly update on unemployment filings. They are expected to show that 548,000 new claims were filed last week. A smaller number is considered negative for bonds while a larger than expected rise is positive. But, this data is also not considered t o be of high importance. Since it is one of the only two reports released at all, it may influence trading some but not enough to greatly affect mortgage rates.

Overall, I am expecting a relatively quiet week in the mortgage market. As long as the stock markets remain fairly calm, mortgage rates will probably close the week close to Tuesday’s opening levels.

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.

Rate Lock Advisory – Thursday Jan. 15th

Thursday’s bond market has opened fairly flat despite another round of sizable stock losses. The stock markets are continuing yesterday’s selling with the Dow down 171 points and the Nasdaq down 25 points. The bond market is currently down 2/32, which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

The Labor Department gave us two pieces of economic news this morning. The first was the Producer Price Index (PPI) for December that revealed a decline of 1.9% in the overall reading. This matched forecasts, but the more important core reading that excludes more volatile food and energy prices rose 0.2% when it was expected to rise 0.1%. This indicates that prices at the producer level of the economy that do not include food or energy rose more than expected. That basically is bad news for the bond market because rising prices raises inflation concerns and makes long-term securities such as mortgage-rela ted bonds less attractive to investors. However, tomorrow’s CPI reading that measures inflation at the consumer level of the economy is considered to be of more importance to the markets.

The second Labor Department release today was last week’s initial unemployment claims filings. They reported that 524,000 new claims for benefits were filed last week, exceeding forecasts of 503,000. But since this data is a weekly reading, its results usually do not have much of an impact on the markets or mortgage pricing.

There are three relevant reports on the agenda for tomorrow. The first is December’s Consumer Price Index (CPI). This is also one of the most important monthly reports that we see since it measures inflationary pressures at the consumer level of the economy. The overall index is expected to fall 1.0% while the core data is expected to increase 0.1%. Weaker than expected readings should lead to bond improvements and lower mortgage rates tomorrow since this is the most important of the three.

December’s Industrial Production report is the second report to be posted tomorrow. It will be released at 9:15 AM ET and measures output at U.S. factories, mines and utilities. This gives us a good indication of manufacturing sector strength or weakness. Current forecasts are calling for a decline of 0.8% from November’s production. A larger than expected drop would be good news and should lead to lower mortgage rates Friday as long as the CPI doesn’t reveal any surprises.

The final report of the week is January’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates. Good news would be if it shows a reading weaker than the 60.0 that is expected. However, it is the week’s least important of the five releases and probably will have little im pact on tomorrow’s mortgage rates due to the importance of the CPI and production reports.

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.

Rate Lock Advisory – Monday Jan. 5th

Monday’s bond market has opened well into negative territory despite early stock losses. The stock markets are giving back some of Friday’s new year gains with the Dow down 68 points and the Nasdaq down 7 points. The bond market is currently down 28/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point.

There is no relevant economic news scheduled for release today. This morning’s bond weakness can be attributed to economic stimulus news that has traders concerned. The concern comes from two angles with the first being that an economic recovery will likely be bad news for bonds as stocks will likely become the investment of choice. This could lead to significant selling that would push yields and mortgage rates higher.

The second concern is that any stimulus package will require a large amount of new debt to be issued by the government. The additional supply weakens demand for existing debt, which in turns drives bond prices lower and their yields higher. Even though hard figures or estimates have not been released, traders are assuming that it will create an unfavorable situation for current bonds and Treasury notes.

The rest of the week brings us the release of only two monthly reports that are relevant to the bond market and mortgage rates. However, in addition to those two reports, we also will see the minutes from the last FOMC meeting and a couple of Treasury auctions that may influence bond trading and possibly mortgage rates.

The first of the two reports will be posted late tomorrow morning when the Commerce Department releases November’s Factory Orders data. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted late last month, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see a decline of 2.6% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates.

Also tomorrow will be the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed’s thinking and concerns regarding inflation and monetary policy. It may also help form opinions of the Fed’s future moves toward interest rates, even though the Fed appears to be running out of options. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they shouldn’t affect the markets or mortgage rates until afternoon hours.

There are two Treasury auctions that are worth watching also. The 10-year TIPS Notes (inflation-indexed securities) will be auctioned tomorrow while the traditional 10-year Treasury Note will be sold Thursday. If investor demand for these sales is strong, we should see bonds strengthen during afternoon trading those days and possibly improve mortgage rates slightly. However, a lackluster interest in the sales could cause bond prices to fall and mortgage rates to move higher following the announcement of the sale results.

Overall, the key data of the week will be Friday’s Employment report, but look for tomorrow to also be important with the economic data, FOMC minutes and one of the two more important Treasury auctions. If they give us favorable results, mortgage rates will likely move lower for the week. But if not, we will probably see mortgage rates move higher again.

If I were considering financing/refinancing a home, I wo uld…. 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.

Rate Lock Advisory – Monday Dec. 22nd

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

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

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

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

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

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

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Float if my closing was taking pl ace over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Rate Lock Advisory – Monday Dec. 15th

Monday’s bond market has opened in positive territory following early stock losses and slightly weaker than expected economic data. The Dow and Nasdaq are kicking the week off in negative ground with losses of 70 points and 30 points respectively. The bond market is currently up 8/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

This week is moderately busy in terms of the number of economic releases scheduled for release with four on the agenda, but the biggest news will likely be the last Federal Open Market Committee (FOMC) meeting of the year tomorrow. Only one of the four economic reports is considered to be of high importance, so the data may not be the biggest influence eon the markets and mortgage rates this week.

November’s Industrial Production data was posted mid-morning today, revealing a 0.6% decline in output at U.S. factories, mines and utilities. This was a slightly larger decline than the 0.5% that was expected, indicating that manufacturing activity was a little softer than thought. That is good news for bonds and mortgage rates.

Tomorrow morning brings us the release of November’s Consumer Price Index (CPI). It is similar to last week’s Producer Price Index, except it tracks inflationary pressures at the consumer level of the economy. It is also one of the most important monthly reports we see. Current forecasts call for a decline of 1.3% in the overall index and a 0.1% rise in the core data reading. The core data is watched more closely because it excludes more volatile food and energy prices, giving a more stabile reading for analysts to consider.

November’s Housing Starts report will also be released tomorrow morning, but I don’t see it causing much movement in mortgage rates. This report, which is expected to show a decline in starts of new homes, gives us an indication of housing sector strength and future mortgage cred it demand. But, it can be considered the least important of this week’s news.

The last FOMC meeting of the year is tomorrow and will adjourn at 2:15 PM ET. There is much debate about what the Fed will do at this meeting, but the general consensus is that another rate cut is coming. Some think that the Fed will reduce key short-term interest rates by another .750 of a discount point, but most think the Fed will make a half-point move and wait until early next year before making another change. The post meeting statement also may a significant influence on the markets and mortgage rates as investors look for any indication of what and when the Fed may do next.

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.

Rate Lock Advisory – Thursday Dec. 11th

Thursday’s bond market has opened in positive territory following weaker than expected numbers in some minor economic reports and a fairly uneventful morning in stocks. The stock markets are flat with the Dow currently nearly unchanged and the Nasdaq down 6 points. The bond market is currently up 11/32, which will likely improve this morning’s mortgage rates by approximately .375 of a discount point.

Neither of today’s reports are considered to be market movers, so their results have had little impact on this morning’s mortgage pricing. The first was October’s Goods and Services Trade Balance report that showed a trade deficit of $57.2 billion. This was much larger than the $53.5 billion deficit that was expected. However, we have not seen this news affect trading or mortgage rates today.

The second was last week’s unemployment claims figures by the Labor Department. They reported that 573,000 new claims for benefits were filed last week, grea tly exceeding forecasts. This is also a 26 year high for new claims, meaning that the employment sector may still be weakening. This is generally good news for bonds and mortgage rates, but since the data tracks only a week’s worth of claims it usually does not heavily influence the markets.

Also worth mentioning is the 10-year Treasury Note auction today that may hurt or help boost bond prices, depending on how strong of a demand there is in the sale. Results will be posted at 1:00 PM ET. If there was a strong demand for the sale, we may see bonds move higher and mortgage rates revise lower during afternoon trading. However, a lackluster interest could lead to higher mortgage pricing.

Tomorrow morning brings us the release lf November’s Retail Sales report. This data is very important to the financial markets because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely. Current forecasts call for it to show a 2.0% decline in sales from October’s levels. If it reveals weaker than expected sales, the bond market should thrive and mortgage rates should fall as a result. A stronger than expected reading could fuel stock market gains and push mortgage rates higher tomorrow morning.

Also tomorrow and just as important as the sales data, the Labor Department will release November’s Producer Price Index (PPI). This index measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If tomorrow’s release reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and should drive mortgage rates higher. If we see in-line or weaker tha n expected numbers, the bond market should fair well and mortgage rates should fall. Current forecasts are showing a 2.0% drop in the overall index and a 0.1% rise in the core data.

The fourth and final report of the week is December’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly. However, with the Retail Sales and PPI reports out before this data, I don’t expect it to affect mortgage rates much. It is expected to show a reading of 55.0, which would be a small decline from last month’s final reading.

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 c losing 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 Nov. 25th

Tuesday’s bond market has opened sharply higher following more bailout news from the Fed that is being received as very favorable for bonds and mortgage rates. The stock markets are in negative territory with the Dow down 5 points and the Nasdaq down 18 points. The bond market is currently up 50/32, which will likely improve this morning’s mortgage rates by approximately .750 of a discount point over yesterday’s rates.

There were two important pieces of economic data released this morning, giving us mixed results. The first revision to the 3rd Quarter Gross Domestic Product (GDP) came in at ?0.5%, which was close to latest forecasts. This means that economic activity during the 3rd quarter was weaker than analysts had predicted last month but close to their latest projections. Accordingly, this data has not had much of an impact on this morning’s mortgage rates.

November’s Consumer Confidence Index (CCI) was also released this morning, showing a reading of 44.9. This was much higher than the 39.5 reading that was expected, indicating that consumers were more optimistic about their own financial situations than many had thought. This is considered negative news for bonds and mortgage rates because rising confidence usually means consumers are more apt to make large purchases in the near future.

Today’s news from the Fed amounts to a more direct support of the mortgage market than the previous moves. In short, the Fed is going to pump $600 billion directly into mortgage lending that should significantly increase cash flow to make new loans to homeowners and homebuyers. The previous announcements were directed more at shoring up the banking side of financial system and somewhat ignored the mortgage side. Today’s news is being considered great for future mortgage activity, and therefore, hopefully will help stabilize home prices.

There are four important reports scheduled to be posted tomorrow morning. October’s Durable Goods Orders is the first and will be posted early morning. This data helps us measure manufacturing strength by tracking orders for big-ticket items. It is expected to show a 2.5% drop in new orders. A larger decline would be good news for the bond market and mortgage rates.

The second is October’s Personal Income and Outlays data. This data is thought to measure consumers’ ability to spend and their current spending habits. It is expected to show that income rose 0.1% and that spending fell 0.7%. Smaller than expected readings would be good news for bonds and could lead to improvements in mortgage rates.

The revised November reading to the University of Michigan Index of Consumer Sentiment will also be posted late tomorrow morning. Analysts are expecting to see little change to the preliminary reading of 57.9. Unless we see a significant variance from the forecasted reading, I don’ t think this data will cause much movement in mortgage rates tomorrow.

The fourth is October’s New Home Sales, but I don’t expect it to have any impact on the bond or mortgage markets. Keep in mind that the bond market will close early tomorrow ahead of the Thanksgiving Day holiday, so we may see additional volatility as traders protect themselves over the long weekend. Many traders will by keeping a skeleton staff Friday, meaning tomorrow is really the last relevant trading day until Monday morning.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… 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 Nov. 24th

Monday’s bond market has opened well into negative territory as investor interest turns back towards stocks. The stock markets are posting strong gains during morning trading with the Dow up 289 points and the Nasdaq up 52 points. The bond market is currently down 14/32, which will likely push this morning’s mortgage rates up slightly from Friday’s levels.

The National Association of Realtors reported this morning that home resales in the U.S. fell more than analysts had expected last month. This is fairly good news for bonds but since this data is not considered to be of high importance it has had little impact on today’s rates.

The first important data of the week comes early tomorrow morning when we will get the first revision to the 3rd Quarter Gross Domestic Product (GDP) reading. The GDP revision is expected to show a downward revision from last month’s preliminary reading of -0.3%. Current forecasts call for a reading of approximately -0.6 %, meaning that there was less economic growth during the third quarter than previously thought. This would be good news for the bond market and mortgage rates.

Late tomorrow morning, November’s Consumer Confidence Index (CCI) will be posted. The Conference Board will release the CCI for the month of November at 10:00 AM ET, giving us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This raises inflation concerns and usually pushes mortgage rates higher. Analysts are expecting a small increase from last month’s 38.0 reading to somewhere around 39.5. A weaker than expected reading should be good news for mortgage rates, but a stronger than expected reading could push mortgage rates higher tomorrow.

Overall, I believe that it is going to be an active week for the mortgage market. Today or Friday will be the least i mportant day of the week and either tomorrow or Wednesday will be the most important. The bond market will close early Wednesday and remain closed Thursday in observance of the Thanksgiving Day holiday. I still expect to see plenty of movement in rates the remaining days, so please be careful 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… 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 – Tuesday Nov. 18th

Tuesday’s bond market has opened in positive territory again, despite early stock gains. The stock markets are rebounding from yesterday’s 223 point loss in the Dow with fairly strong gains during morning trading. The Dow is currently up 181 points while the Nasdaq has gained 11 points. The bond market is currently up 9/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

The Labor Department gave us the first of the week’s two key inflation readings. They reported that the PPI fell a whopping 2.8% that was a much larger drop than analysts had forecasted. However, the more important core data reading that excludes more volatile food and energy prices rose 0.4% when analysts were expecting to see a 0.1% rise. This means that prices for non food and energy costs rose more than expected, which is considered bad news for bonds and mortgage rates.

Today’s markets are being boosted by favorable comme nts by Treasury Secretary Paulson that the Fed bailout program was making progress. Many lawmakers had questioned the usage of the money for the program but market participants liked what they heard, helping to fuel this morning’s buying in stocks and bonds.

Tomorrow’s only data is October’s Housing Starts. This data gives us an indication of housing sector strength, but usually does not have a noticeably impact on mortgage rates. I don’t expect this month’s version to be any different unless it varies greatly from analysts forecast. It is expected to show a decline in starts of new homes.

Tomorrow afternoon brings us the release of the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates highe r tomorrow afternoon. However, if they indicate a likelihood of another rate cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.

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.

Rate Lock Advisory – Tuesday Nov. 4th

Tuesday’s bond market has opened up slightly despite sizable stock gains during early trading. The stock markets are strong this morning with the Dow up 262 points and the Nasdaq up 42 points. The bond market is currently up 2/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.

Today’s only relevant data came from the Commerce Department who posted September’s Factory Orders report. It showed a decline of 2.5% that was an improvement from August’s 4/3% drop, but was also much weaker than the 0.8% decline that was expected. This means that new orders at U.S. factories fell much more than thought and indicates a rapidly slowing manufacturing sector. This is good news for bonds and mortgage rates.

There is no important data scheduled for release tomorrow. Thursday’s sole important report is the 3rd Quarter Productivity reading. The productivity index is expected to show a level of worker productivi ty during the third quarter much lower than last quarter’s final reading of 4.3%. Analysts have forecasted a 1.0 rise in worker output. A larger increase would be good news for the bond market because high levels of productivity helps the economy to expand without inflationary pressures being a concern.

We also will get weekly unemployment figures from the Labor Department early tomorrow morning. It is expected to show that new claims for benefits fell slightly to 476,000 last week. While this data usually does not have much of an impact on the markets because it tracks only a week’s worth of claims, tomorrow’s release may be a little more influential than usual. This is because the release will cover the last full week of October and with Friday’s monthly report coming out for the entire month, traders will be looking for any significant change in claims that may alter their estimates for the monthly report.

If I were considering financing/refinanci ng 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.

Rate Lock Advisory – Tuesday Oct. 28th

Tuesday’s bond market has opened well in negative territory despite a new record low reading on consumer confidence. The stock markets are showing sizable gains as investors speculate about another Fed rate cut tomorrow. The Dow is currently up 115 points while the Nasdaq has gained 9 points. The bond market is currently down 22/32, which with yesterday’s late weakness will push this morning’s mortgage rates higher by approximately .750 of a discount point.

The Conference Board reported late this morning that their Consumer Confidence Index (CCI) fell this month to its lowest reading ever. The reading of 38.0 was significantly lower than the 52.0 that was forecasted and indicates that consumers are too concerned about their own financial situations to make large purchases in the near future. This is actually favorable data for the bond market and mortgage rates, but traders are preparing for tomorrow’s FOMC meeting and reacting to this morning’s stock gain s. This has prevented bonds from moving higher as a result of this report.

The week’s FOMC meeting began today and will adjourn tomorrow afternoon. There is now a pretty large consensus that the Fed will lower key short-term interest rates at this meeting, but what is being debated is the size of the cut. Some analysts are calling for a .750 cut while the majority think a half-point reduction is coming. This makes the post meeting statement even more important than usual as traders will try to figure out if the Fed thinks this is the last cut or if they are prepared to make another in the future. The meeting will adjourn at 2:15 PM ET, so look for any reaction to come during afternoon trading.

Tomorrow also brings us the release of some important economic data. The Commerce Department will post Durable Goods Orders for September at 8:30 AM tomorrow. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factor ies for big-ticket items. Analysts are currently calling for a drop in new orders of approximately 1.0%. If we see a smaller than expected decline in orders, mortgage rates will probably rise as bond prices fall. A weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast.

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.

Rate Lock Advisory – Monday Oct. 27th

Monday’s bond market has opened fairly flat with the stock markets mixed and despite stronger than expected economic news. The stock markets are in another volatile session after the international markets that had another significant sell-off. The Dow is moving in a range of 250 points between its high and low of the morning, but currently stands up 30 points. The Nasdaq is also fluctuating between positive and negative ground and is currently down 6 points. The bond market is up 2/32, but we will likely see an increase in this morning’s mortgage rates of approximately .125 – .250 of a discount point due to movements late Friday.

Today’s only economic data is the week’s least important. September’s New Home Sales report was posted late this morning, showing an increase in sales of 2.7% when it was expected to reveal another decline. However, offsetting that increase was a downward revision to August’s sales figures. Still, this data is not considered to be of high importance and has not influenced bond trading or mortgage rates today.

Tomorrow morning brings us the release of the Consumer Confidence Index (CCI) for the month of October. This Conference Board index will be posted at 10:00 AM and gives us a measurement of consumer willingness to spend. It is expected to show a sizable decline in confidence from last month’s 59.8 reading, indicating that consumers are less likely to make large purchases in the near future. As long as the reading doesn’t exceed the forecasted 52.0, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

The week’s FOMC meeting is a two-day meeting that begins tomorrow and adjourns Wednesday afternoon. Assuming the Fed stands pat and leaves rates unchanged, traders will be looking at the post-meeting statement for any indication of the Fed’s next move. Since there is a fair amount of uncertainty and a lack of a strong consensus of what the Fed will do here, the move itself, if it happens, will likely cause plenty of volatility in addition to the post-meeting statement. The meeting will adjourn at 2:00 PM Wednesday, so look for quite a bit of volatility during afternoon hours.

Overall, it is difficult to peg a single day of the week as being the most important but I am expecting to see plenty of movement in rates this week. The data being posted tomorrow, Wednesday and Thursday is all very important to the markets. The FOMC meeting is the single most important event of the week, but we may see noticeable movement in mortgage rates several days this week. Accordingly, please maintain contact with your mortgage professional.

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 clo sing 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 Oct. 19th

There are only two pieces of data scheduled for release this week that may affect mortgage rates along with testimony by Fed Chairman Bernanke. Neither of the reports are considered to be of high importance to the markets, so I am expecting the stock markets to again play a significant role in bonds swings and changes to mortgage rates.

The first report is will be posted late tomorrow morning when the Conference Board posts September’s Leading Economic Indicators (LEI). This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for a decline of 0.3% from August?s reading. This would indicate that economic activity is likely to slow moderately. That would be good news for the bond market and mortgage rates.

Chairman Bernanke will speak before the House Budget Committee late tomorrow morning regarding the status of the economic recovery plan. As usual, market participants will be watching his words carefully. We may see them cause fluctuations in the markets while he is speaking, however, I suspect he will not say anything drastically surprising to anyone.

The middle part of the week is very calm in terms of economic releases and related events. Accordingly, look for significant movement in the stock markets to lead to any sizable movements in bonds or mortgage pricing.

September’s Existing Home Sales that will be posted at 10:00 AM ET Friday. This report gives us an indication of housing sector strength and mortgage credit demand. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.

Overall, I am expecting to see a fairly quiet week for mortgage rates, assuming the stock markets are not wild agai n. The most important day will likely be tomorrow with the more important of the two releases scheduled and the testimony from Chairman Bernanke. However, just because it is a light week in terms of economic news, we should not let our guard down as the markets can implode or rally at anytime these days.

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 – Monday Sep. 15th

Monday’s bond market has opened up sharply following a steep sell-off in stocks during early trading. The stock markets are reacting to news that Lehman Brothers filed for bankruptcy and other related financial sector news. This has pushed the Dow lower by 250 points and the Nasdaq down 33 points. The bond market is currently up 48/32, which should improve this morning’s mortgage rates by approximately .500 of a discount point.

The news the Lehman was unable to find buyers for its businesses and filed for bankruptcy protection has significantly raised concerns that the financial sector of the market is nowhere near stabilizing and has many fearing that more collapses may be coming in the near future. There are concerns about other banks and financial services companies on the verge of collapse that could create turmoil in international markets also. The benefactor to this news and concern is the bond market as investors seek safe-haven from the volatili ty. Whether this spike in bond prices will hold is unknown at this time, but what is a safe bet is that more news like this weekend’s reports could make mortgage-related bonds much more attractive to investors and may lead to a downward trend in mortgage rates.

Also contributing to this morning’s bond gains was a much larger decline in industrial production than analysts had expected. This morning’s release of August’s Industrial Production report revealed a 1.1% decline in factory output. This was much weaker than analysts’ forecasts of a 0.3% decline and indicates that the manufacturing sector was weaker than thought in August. This is good news for bonds and mortgage rates because slowing economic activity eases inflation concerns.

Tomorrow morning brings us the release of August’s Consumer Price Index (CPI). This is one of the most important reports we see each and every month. It is considered to be a key indicator of inflation at the consumer le vel of the economy. There are two readings in the report- the overall index and the core data reading. Current forecasts are calling for 0.1% decline in the overall reading and a 0.2% rise in the core data reading. A larger increase in the core data would likely lead to higher mortgage rates tomorrow, while a smaller increase would be good news.

The FOMC meeting will adjourn at 2:15 PM tomorrow. There is little debate about a possible change to key short-term interest rates at this meeting. The overwhelming consensus is that there will be no change to rates at this meeting. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find the Fed’s expected next move. The wild card is how the markets react to the statement. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates tomorrow afternoon and Wednesday morning.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Rate Lock Advisory – Wednesday Sep. 10th

Wednesday’s bond market has opened in negative territory as investors sell holdings to capture profits from the recent rally. Stock gains are also contributing to the weakness in bonds with the Dow up 80 points and the Nasdaq up 12 points. The bond market is currently down 20/32, but we will likely see a slight improvement in mortgage rates due to strength in bonds late yesterday.

There is no relevant economic news scheduled for release today. Tomorrow brings us the the release of the first economic report of the week but it is not considered to be of high importance. July’s Goods and Services Trade Balance data will be posted tomorrow morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $58.0 billion, which would be an increase from June’s $56.8 billion. However, I would consider this the least important of this week’s releases, meaning it will likely have little impact on bond trading or mortgage rates. < br />
Also tomorrow is the release of weekly unemployment figures. The Labor Department is expected to show that 440,000 new claims for benefits were filed last week. A significantly higher or lower number may influence trading enough to affect mortgage rates. However, it is more likely that this release will have little impact on rates, especially with the important data that is scheduled for release Friday morning.

We will see three relevant reports posted Friday, two of which are very important to the markets. They are August’s Retail Sales report and Producer Price Index (PPI) and September’s University of Michigan Index of Consumer Sentiment. This makes Friday the most important day of the week, meaning we may see plenty of movement in rates Friday.

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 cl osing 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.

Monday’s bond market has opened in positive territory after the stock markets kicked the week off in selling mode. The stock markets are showing fears of the banking crisis after another bank failed over the weekend. This has the Dow down 127 points and the Nasdaq down 34 points. The bond market is benefiting as investors seek safe-haven in bonds. This has pushed the bond market up 28/32, which will likely improve this morning’s mortgage rates by .125 – .250 of a discount point.

Today’s only economic data was July’s Existing Home Sales report that showed a larger increase in home resales than was expected. This could be considered bad news for bonds and mortgage rates, however, this data is not considered to be of high importance to the markets. Therefore, the stock losses are influencing bond trading more than this data is.

The Conference Board will post this month’s Consumer Confidence Index (CCI) at 10:00 AM tomorrow. This index measures co nsumer willingness to spend, which is important because consumer spending makes up two thirds of the U.S. economy. A decline would indicate that consumers may not be making large purchases in the immediate future. That sign of economic weakness should drive bond prices higher, leading to lower mortgage rates tomorrow. It is expected to show a reading of 53.0, which would be an increase from July’s 51.9.

Also scheduled for release tomorrow is July’s New Home Sales data. This report is the least important release of the week. It will give us an indication of housing sector strength and mortgage credit demand like Monday’s Existing Home Sales report does and also usually doesn’t have a major impact on bond prices or mortgage rates.

The third and final event for tomorrow is the release of the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show so me divisiveness by its members. It will be interesting to see some of the Fed member’s views on the economy and inflation and if they will hint what the Fed’s next move may be.

Overall, it is a shortened week and will probably be a very busy week for mortgage rates. The bond market is expected to close at 2:00 PM ET Friday ahead of the Monday holiday. We will likely see the most activity in rates tomorrow morning, but Wednesday and Thursday are also important. If we manage to get weaker than expected results in the key reports and the Fed minutes don’t show any surprises, we should see mortgage rates close the week lower than tomorrow’s opening levels.

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… T his 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.

Monday’s bond market has opened up slightly following a negative open in stocks. The stock markets are starting the week in the red with the Dow down 56 points and the Nasdaq down 12 points. The bond market is currently up 3/32, which should keep this morning’s mortgage rates near Friday’s levels.

There is no relevant economic news scheduled for release today. However, there are two reports scheduled to be posted tomorrow 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 an increase of 0.6% in the overall and 0.2% in the core data reading. A larger increase may renew inflation concerns and push mortgage rates higher tomorrow morning. If it reveals smaller than expected increases, we could see mortgage rates improve as a result.

The Conference Board will give us the first data late tomorrow morning when it releases its Leading Economic Indicators (LEI) for July. This index attempts to measure economic activity over the next three to six months. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening. However, a weaker than expected reading means that the economy may slow in the near future, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates tomorrow if the stock markets remain calm.

The second 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 expected to show a sizable drop in new starts.

The Conference Board will give us the last piece of data for the week late Thursday morning when it releases its Leading Economic Indicators (LEI) for July. This index attempts to measure economic activity over the next three to six months. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening. However, a weaker than expected reading means that the economy may slow in the near future, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates tomorrow if the stock markets remain calm. Current forecasts are calling for a decline of 0.2% in the index.

Overall, look for tomorrow 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…. 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.

Wednesday’s bond market has opened in positive territory again as investors continue to worry about the economy and what this month’s Employment report is going to show. The stock markets are showing losses this morning with the Dow down 36 points and the Nasdaq down 21 points. The bond market is currently up 7/32, but we will still see an increase in this morning’s mortgage rates of approximately .250 of a discount point due to weakness in bonds late yesterday.

The Commerce Department reported this morning that new orders at U.S. factories rose 0.6% in May. This was slightly higher than forecasts but not enough to influence bond trading or mortgage rates during morning trading. They also revised April’s sales higher by 0.2% but it also has not had an impact on mortgage pricing.

Tomorrow morning brings us the release of June’s Employment report that will give us the U.S. unemployment rate, number of new payrolls added or lost and average hourly earnings. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets.

The ideal scenario for the bond market is rising unemployment, a decline in payrolls and no change in earnings. Weaker than expected readings should help boost bond prices and lower mortgage rates. However, stronger than forecasted readings could be disastrous for mortgage pricing. Analysts are expecting to see the unemployment rate to slip 0.1% to 5.4%, while 60,000 jobs were lost and a 0.3% rise in earnings.

The bond market will close early tomorrow ahead of Friday’s Independence Day holiday and will reopen Monday morning. This may add to the volatility following tomorrow’s release as investors move to protect themselves over the long weekend.

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.

Monday’s bond market has opened up slightly, following a mixed open in stocks and no relevant economic news scheduled for release today. The Dow is currently showing a 35 points loss while the Nasdaq is up 3 points. The bond market is currently up 3/32, but due to selling in bonds late Friday, we will likely still see an increase of approximately .250 of a discount point in this morning’s mortgage rates.

This week is moderately busy with four economic reports scheduled to be released. Only one of the four is considered to be of high importance to the markets and mortgage rates. The remaining three are of interest to the markets but likely will not cause a large change in mortgage rates unless they vary greatly from forecasts.

Tomorrow brings us the release of three of the week’s four reports. May’s Producer Price Index (PPI) will be the first early tomorrow morning. It helps us measure inflationary pressures at the producer level of the economy and is the sister report to last week’s Consumer Price Index (CPI). There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food and energy prices. A large increase could add fuel to the theory that inflation is a real threat to the economy because the higher prices will likely be passed on to the consumer in the near future. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond’s future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 1.0% in the overall index and a 0.2% rise in the core data.

The second of three reports being posted tomorrow is May’s Housing Starts report. This report gives us a measurement of housing sector strength, but is the week’s least important. It usually doesn’t have a major impact on the bond market or mortgage rates and I see no reason for this month’s results to be any different. Analysts are expecting to see a drop in starts of new homes between April and May.

The third and final piece of data is May’s Industrial Production. This report will be released at 9:15 AM ET. It measures output at U.S. factories, mines and utilities, giving us an important measurement of manufacturing sector strength. If it reveals that production is rising, concerns of manufacturing strength may come into play in the bond market. A decline would indicate that the manufacturing sector is weaker than expected and should help push mortgage rates lower. Current forecasts are calling for an increase of 0.1%.

Overall, look for tomorrow to be the biggest day of the week. Not just because it brings the release of three of the four reports, but because it brings us the PPI that is considered to be a key inflation reading. I am still not sure that we have seen the end of the recent bond selling. Therefore, I am holding the lock recommendations for the time being.

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.

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.

Tuesday’s bond market has opened in positive territory despite a stronger than expected economic reading. The stock markets are showing early losses with the Dow down 50 points and the Nasdaq down 9 points. The bond market is currently up 10/32, which with yesterday’s late strength should improve this morning’s mortgage rates by approximately .250 – .375 of a discount point.

The Conference Board gave us April’s Consumer Confidence Index (CCI) late this morning, revealing a stronger than expected reading of 62.3. However, an upward revision to March’s reading has actually worked favorably for bonds. The difference between forecasts and the previous March reading is extremely close to the difference between today’s reading and the revised March reading. This means that even though confidence was a little higher than thought in March, it dropped as much as it was expected to in April. The result is little impact on bond trading or mortgage rates.

Tomorrow is going to be a very interesting day as brings us the release of two important reports along with the FOMC meeting results. The first is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets tomorrow and therefore the mortgage market also. Analysts are expecting to see output at an annual rate of 0.5%. A smaller increase would be ideal for mortgage rates a sit would fuel recession concerns. But, a larger increase would almost certainly cause inflation concerns in the bond market that would push mortgage rates higher tomorrow morning.

The next report of the day is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we may see inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.8%.

This week’s FOMC meeting will began today but will not adjourn until tomorrow afternoon. It will likely adjourn with an announcement of another rate cut to key short term interest rates. Just how much of a reduction is open for debate. Look for another round of volatility following the 2:15 PM ET post-meeting statement.

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 onl y 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 turn their attention towards stocks and earnings. The stock markets are showing gains with the Dow up 88 points and the Nasdaq up 30 points. The bond market is currently down 6/32, which will likely push this morning’s mortgage rates high by approximately .125 of a discount point.

There is no relevant economic news scheduled for release today. Tomorrow morning brings us the release of March’s New Home Sales report that will likely be of little importance to traders. It is expected to show another decline in sales of newly constructed homes.

The big news tomorrow will be March’s Durable Goods Orders. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for a small increase in orders. A decline in news orders could help boost bond prices and cause mortgage rates to drop tomorrow morning. However, a stronger than expected reading would indicate that the manufacturing sector is gaining strength and would probably help drive mortgage rates higher.

The Labor Department will give us weekly unemployment claims figures tomorrow also. They are expected to say that 375,000 new claims for benefits were filed last week. A higher number could be considered positive for bonds, but this data usually doesn’t influence mortgage rates unless it varies greatly from forecasts.

This week’s 5-year Treasury Note auction is scheduled for tomorrow too. These sales sometimes bring volatility to the bond market ahead of the actual sales as investors prepare for them. However, that weakness is usually only temporary and will correct itself after the sale is complete as long as it was met with a decent demand from investors. Results of the sale will be posted at 1:00 PM ET. If there was a strong demand, bond prices should rise during afternoon trading. But, lackluster interest could lead to weakness and upward revisions to 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 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 2008