Daily Mortgage Rate Lock Advisory

Weekly Mortgage Rate Lock Advisory – Sunday Feb. 22nd

Rate Lock Advisory – Sunday Feb. 22nd

This week brings us the release of six pieces of economic data for the bond market to digest along with some very important testimony from Fed Chairman Bernanke. Two of the reports are considered to be of low importance, but since we have data being posted every day of the week except for tomorrow, it is likely that we will see plenty of movement in mortgage rates the next few days.

Tuesday morning brings us the first of this week’s data with the release of February’s Consumer Confidence Index (CCI) during late morning trading. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. Since consumer spending makes up two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from 37.7 in January to 36.0 this month. A lower reading would be considered good news for bonds and mortgage rates.

Mr. Bernanke will deliver the Fed’s semi-annual testimony on the status of the economy late Tuesday morning. He will be speaking to the Senate Banking Committee and market participants will watch his words very closely. The Fed Chairman is required to deliver this testimony twice a year, which is considered to be of extreme importance to the financial markets. We almost always see the markets move as a result of what he says during this testimony. Look for him to address the banking and housing crises specifically and their impact on the overall economy. His testimony begins at 10:00 AM ET with a prepared statement then is followed by Q & A with committee members. I am expecting to see the markets fluctuate during this session, possibly affecting mortgage rates also.

January’s Existing Home Sales report will be posted late Wednesday morning. This is one of the least important reports of the week, along with Thursday’s New Home Sales report. They measure housing sector strength and mortgage credit demand, but usually do not have a significant impact on bond trading or mortgage rates. The Existing Home Sales report is expected to show an increase in sales but new home sales are expected to fall slightly.

The only important data scheduled for release Thursday is January’s Durable Goods Orders data. This data gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. A larger drop than the 2.3% that is expected would be good news for the bond market and mortgage rates. This data is quite volatile from month-to-month, so large swings are fairly normal.

The first of two revisions to the 4th Quarter GDP reading is scheduled for release Friday morning. Analysts’ forecasts currently call for a decline of 5.4%, indicating that the economy was weaker in the last quarter of the ye ar than initially thought. It will be interesting to see where this figure falls and what its impact on the markets will be. Generally speaking, higher levels of activity are bad news for the bond market.

The last piece of data scheduled for release this week is the University of Michigan’s revision to their Index of Consumer Sentiment for February. Current forecasts show this index revising slightly higher than previously thought. The preliminary reading was 56.2 and is now expected to stand at 56.5, indicating that consumer sentiment was slightly stronger than previously thought. This index is important because it helps us measure consumer confidence that translates into consumer willingness to spend.

Overall, look for plenty of movement in bond prices and mortgage rates this week. I think we will see the most movement either Tuesday or Thursday, but Friday may be fairly active also. This would be a good week to maintain contact with your mortgage professional.

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

Tags: bond, Chairman Bernanke, consumer confidence index, consumer confidence index cci, existing home sales, existing home sales report, fed chairman bernanke, index measures, market participants, Mr. Bernanke, personal financial situations, Release, senate banking committee, Testimony, tuesday morning, U.S., week

Rate Lock Advisory – Sunday Oct. 26th

Rate Lock Advisory – Sunday Oct. 26th

This week is packed with economic releases and major events that will likely lead to a fair amount of volatility in the markets and mortgage pricing. There are seven reports scheduled for release along with another FOMC meeting. The first of the week’s news comes late tomorrow morning with the release of September’s New Home Sales. This data covers the remaining 15% of home sales that last week’s Existing Home Sales report tracked and is this week’s least important data. It is expected to show a decline in sales, but regardless of its results I am not expecting it to have a significant impact on mortgage rates tomorrow.

The first important data will be posted Tuesday morning with 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, ind icating 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 Tuesday 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.

Wednesday morning, the Commerce Department will post Durable Goods Orders for September. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories 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.

The next relevant data is the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) early Thursday morning. The GDP is considered to be the benchmark measurement of economic growth because it is the sum of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Thursday’s release is the first and usually h as the biggest impact on the markets. Current forecasts call for a decline of approximately 0.5% in the GDP. If this report does show a decline, I am expecting to see the bond market rally and mortgage rates to fall.

There are three reports scheduled for release Friday. The first is the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.7%. A smaller than expected increase would be good news for bonds and mortgage rates.

September’s Personal Income and Outlays report will also be posted early Friday. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making econ omic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see an increase of 0.1% in income and decline in outlays of 0.2%.

The week’s last report comes at 10:00 AM ET Friday when the University of Michigan updates their Index of Consumer Sentiment for this month. Current forecasts show this index remaining nearly unchanged from this month’s preliminary reading of 57.5. This index is important because it helps us measure consumer confidence, which is believed to indicate consumers’ willingness to spend. Since consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be important.

Overall, it is difficult to peg a single day of the week as being the most important. The data being posted Tuesday, Wednesday and Thursday is a ll 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 closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: afternoon hours, board index, bond, consumer confidence index, consumer confidence index cci, decline, durable goods orders, economic releases, existing home sales, fomc meeting, mortgage rates, Release, tuesday morning, U.S., week

Rate Lock Advisory – Sunday Sep. 14th

Rate Lock Advisory – Sunday Sep. 14th

There are only four pieces of economic news scheduled for release this week and one of them is a highly important inflation reading. We also have another Federal Open Market Committee (FOMC) meeting, which likely will not bring a change to key short-term interest rates. There is a pretty good possibility of seeing a fair amount of volatility in the markets and likely mortgage rates the next several days.

The first report of the week is August’s Industrial Production data tomorrow morning. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important but could cause movement in mortgage rates. Analysts are currently expecting to see a 0.3% decline in production. A higher level of output could lead to higher mortgage rates, while a weaker than expected figure should help push rates slightly lower.

August’s Consumer Price Ind ex (CPI) will be released Tuesday morning at 8:30 am ET. The CPI 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 level of the economy. There are two readings in the report- the overall index and the core data reading. Current forecasts are calling for no change 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 Tuesday, while a smaller increase would be good news.

The FOMC meeting will adjourn at 2:15 PM Tuesday. 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 ma rkets 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 Tuesday afternoon and Wednesday morning.

August’s Housing Starts report will be released early Wednesday morning. This report will probably not have much of an impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand, but is usually considered to be of low importance to the financial markets.

Late Thursday morning, the Conference Board will release its Leading Economic Indicators (LEI). This index attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market will probably fall and mortgage rates will rise slightly. If it shows weaker than expected readings, the bond market may rally and mortgage rates should fall. Current forecasts are calling for a 0.2% decline from July’s reading.

Overall, I expect to see some pressure in bonds tomorrow as investors prepare for Tuesday’s events. Tuesday will most likely be the most important day of the week with the CPI release and the FOMC meeting. If the CPI eases inflation concerns and the Fed statement doesn’t reveal any negative surprises, we will most likely see mortgage rates move lower for the week.

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

Tags: bond, core data, cpi, federal open market committee, fomc meeting, key indicator of inflation, LEI, manufacturing sector, mortgage rates, open market committee, overwhelming consensus, term interest, Tuesday, tuesday morning, U.S., week

Rate Lock Advisory – Friday Aug. 29th

Friday’s bond market has opened in negative territory despite sizable stock losses. The stock markets in selling mode with the Dow down 145 points and the Nasdaq down 40 points. The bond market is currently down 3/32, which will likely keep this morning’s mortgage rates at yesterday’s levels. July’s Personal Income and Outlays was the first piece of economic data posted this morning. It showed that spending rose 0.2% as it was expected to, but a surprising drop of 0.7% in income was the largest decline in three years. This indicates that consumers have less income to spend than thought, which will likely translate into slower consumer spending. That is considered good news for bonds and mortgage rates. August’s revision to the University of Michigan’s Index of Consumer Sentiment was also posted, showing a 63.0 reading. That was a full point higher than analysts had predicted, meaning that consumers were more optimistic about their own financia l situations than many had thought. This is considered bad news for bonds and mortgage pricing because increasing sentiment usually means consumers are more willing to make large purchases in the near future. The bond market will close at 2:00 PM ET today ahead of the Labor Day holiday. It will remain closed Monday and reopen Tuesday morning. The stock markets will be closed Monday also. It does not appear that this early close is going to affect trading much, but I have extended the lock recommendation to short-term period closings as a precautionary move. Next brings us the release of a couple of important reports, including Tuesday’s release of August’s ISM manufacturing index that measures manufacturer sentiment. We also will get August’s employment figures next week along with a couple of other relevant releases. Look for more details on next week’s events in Sunday’s weekly preview. If I were considering financing/refinancing a hom e, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, closing, employment figures, index of consumer sentiment, ism manufacturing index, mortgage rates, negative territory, precautionary move, sentiment, stock, stock losses, stock markets, term period, tuesday morning

Daily Rate Lock Recommendation – 06/29/2008 12:04:00 AM EST

This week brings us the release of very few economic reports for the markets to digest. There are only three monthly reports scheduled for release that are likely to affect mortgage rates, but one of them is arguably the most influential single piece of data that we see each month. This is a shortened trading week with the markets closed Friday and an early bond market close Thursday in observance of the Independence Day holiday. The first of the week’s three reports is of fairly high importance to the bond market. The Institute of Supply Management (ISM) will release their manufacturing index for June late Tuesday morning. This index measures manufacturer sentiment by surveying trade executives on current business conditions. A reading below 50 means that more surveyed executives felt business improved than those who felt it had worsened. Analysts are expecting another reading below 50.0. That would indicate that manufacturers felt business remained close to unchanged from the previous month. Good news would be a weaker than expected reading. The Commerce Department post May’s Factory Orders data late Wednesday morning, which is similar to the Durable Goods Orders report that was released last week. The biggest difference being that this week’s report covers both durable and non-durable goods. It usually doesn’t have as much of an impact on the bond market as the durable goods data does, but can lead to changes in mortgage pricing if it varies from forecasts. Current expectations are showing a 0.6% rise in new orders from April’s levels. A smaller than expected rise in orders would be considered good news for the bond market and should help lower mortgage rates slightly Wednesday. The only other important release of the week comes early Thursday morning. The Labor Department will give us June’s unemployment rate, number of new payrolls added and average hourly earnings. These are considered to be very impo rtant 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 50,000 jobs were lost and a 0.3% rise in earnings. Overall, I am expecting to see the most movement in rates the latter part of the week. Tuesday morning should bring some volatility with the ISM index, but Thursday’s report is definitely the most important of the week and can single handily lead to an improvement or increase in mortgage rates for the week. If I were considering financing/refinancing a home, I would…. Float if my closing was taking place within 7 days… Float if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: average hourly earnings, bond, closing, commerce department post, durable goods orders, economic reports, Float, index measures, institute of supply management, lower mortgage, mortgage rates, Release, Thursday, tuesday morning, unemployment rate, week

Weekly Rate Lock Recommendation – 05/25/2008 12:16:00 AM EST

This holiday shortened week brings us the release of six important economic reports or news releases. Two of the six are considered to be of high importance to the bond market and mortgage pricing with one being of low importance. The remaining reports are considered to be of moderate importance to the markets. The financial and mortgage markets are closed tomorrow in observance of the Memorial Day holiday and will reopen Tuesday morning.

The Conference Board will start the week’s releases by posting their Consumer Confidence Index (CCI) at 10:00 AM Tuesday. This is a very important release that measures consumer willingness to spend. If the index rises, it indicates that consumers feel better about their personal financial situations and are more apt to make large purchases. If confidence is sliding, analysts think consumer spending may slow in the near future. The latter is good news for the bond market because it should ease concerns about inflationary pr essures, making bonds more attractive to investors. This should boost bond prices and push mortgage rates lower Tuesday morning. It is expected to show a reading of 61.0 after April’s 62.3 reading.

April’s New Home Sales data will be released late Tuesday morning. This report gives us a measurement of housing sector strength and future mortgage credit demand. However, it is actually the least important release of the week and probably will not have much of an impact on mortgage pricing. It is expected to show another decline in sales.

Wednesday morning we will see April’s Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show a decline in new orders of approximately 0.7%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a large r than expected drop, we should see rates improve Wednesday morning.

The first of two revisions to the 1st quarter Gross Domestic Product (GDP) will be released at 8:30 AM Thursday. The second revision to this report comes next month but isn’t expected to have much of an impact on the financial markets. The GDP is the sum of all goods and services produced in the U.S. and is considered to be the best indicator of economic growth. Last month’s preliminary reading revealed a 0.6% annual rate of growth. Analysts expect an upward revision to this reading with the consensus being a .9% annual rate. If true, we may see the bond market react negatively and mortgage rates move higher.

Friday brings us the release of two pieces of data with the first being April’s Personal Income and Outlays data at 8:30 AM. This report gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.4% rise in income and a 0.4% increase in spending. Weaker readings would be considered good news for bonds and mortgage rates.

The last report of the day and the last important data of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. An upward revision would be considered a negative for bonds.

Overall, I think we have a busy week ahead of us. With the markets closed tomorrow, Tuesday’s data will set the tone for the first part of the week. The big reports of the week are Tuesday’s CCI and Wednesday’s Durable Goods. If Thursday’s GDP revision varies greatly from forecasts, it can also lead to sizable changes in rates.

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

Tags: bond, consumer confidence index, consumer confidence index cci, durable goods orders, economic reports, moderate importance, mortgage credit, mortgage markets, mortgage rates, personal financial situations, Release, report, spending, Tuesday, tuesday morning, U.S., week

Weekly Rate Lock Recommendation – 04/27/2008 10:17:00 PM EST

This week is packed with relevant pieces of economic news in addition to another FOMC meeting. All seven of the reports are considered to be at least moderately important while several are considered very important to the markets and mortgage rates. This makes it likely that we will see plenty of movement in mortgage pricing over the next several days.

The first report comes late Tuesday morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to continue to spend. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in sp ending would ease inflation concerns. But, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday. It is expected to show a reading of 62.0, which would be a decline from March’s 64.5 reading.

Wednesday brings us the release of two important reports along with the FOMC meeting. 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 Wednesday and therefore the mortgage market also. Analysts are expecting to see output at an annual rate of 0.4%. 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 b ond market that would push mortgage rates higher Wednesday 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 begin on Tuesday but will not adjourn until Wednesday 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.

March’s Personal Income & Outlays is the first of two reports due to be posted Thur sday morning. This data helps us measure consumers’ ability to spend and current spending habits, which is important to the mortgage market due to the influence that consumer spending related information has on the financial markets. If a consumer’s income is rising, they are more likely to make additional purchases. This raises inflation concerns and has a negative affect on the bond market and mortgage rates. Current forecasts are calling for a 0.4% increase in income and a 0.2% rise in spending.

The Institute for Supply Management (ISM) will post their manufacturing index late Thursday morning. This is one of the first important economic reports released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. But , if we see a drop from last month’s reading of 48.6, the bond market should thrive and mortgage rates will probably fall. It is expected to show a reading of 48.0.

The week’s most important release is being saved for nearly last. The almighty Employment report will be released Friday at 8:30AM, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be an increase in the unemployment rate and fewer than expected new payrolls. Just how much of an improvement or worsening depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for a 5.2% unemployment ra te and approximately 80,000 jobs lost during the month.

Friday’s second report and the last of the week is March’s Factory Orders data at 10:00AM. This is a fairly important release because it measures manufacturing sector strength. It is similar to last week’s Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report usually has more of an impact on the financial markets than the Factory Orders report does. Still, a smaller increase than the 0.4% that is expected could push mortgage rates slightly lower, while a larger increase will likely lead to higher rates. But, the employment numbers are of much more importance to the markets than this data is.

Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday or Friday will likely be the most important day of the week with the GDP and Employment numbers being posted along with the FOMC adjournment, but we may see noticeable changes to rates Tuesday also. If this week’s reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.

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

Tags: bond, consumer confidence index, consumer confidence index cci, fomc meeting, inflation concerns, mortgage market, mortgage rates, personal financial situations, relevant pieces, report, sizable increase, spending, tuesday morning, U.S., week

Weekly Rate Lock Recommendation – 04/20/2008 10:13:00 PM EST

This week is fairly light in terms of economic news scheduled for release. There are four reports scheduled, but only one of them is likely to cause much movement in mortgage rates. Accordingly, there is a fairly decent possibility of seeing a fairly calm week in the mortgage market.

The week’s first piece of data is one of the least important of all four. The National Association of Realtors will post March’s Existing Homes Sales numbers Tuesday morning, which are expected to show a drop from February. A similar report to this one and actually the week’s least important data- March’s New Home Sales will be released Thursday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts forecasts, I don’t think they will cause much movement in mortgage rates.

March’s Durable Goods Orders will be posted early Thursday morning. This report gives us an indicatio n 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 smaller than expected increase could help boost bond prices and cause mortgage rates to drop Thursday morning. However, a stronger than expected reading would indicate that the manufacturing sector is gaining strength quicker than many had thought. This would be negative news and would probably help drive mortgage rates higher.

Also Thursday is a 5-year Treasury Note auction. 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.

The last important data of the week is the University of Michigan’s update to their Index of Consumer Sentiment for April. This report gives us an indication of consumer sentiment. I don’t expect it to have a significant impact on bonds and mortgage pricing unless it varies greatly from forecasts Current forecasts are calling for an upward revision to 64.2.

Overall, look for Thursday to be the most important day of the week with the Durable Goods report being posted and the Treasury auction. The rest of the week will likely be heavily influenced by the stock markets. If the major stock indexes continue to rally, bonds will likely suffer and mortgage will move higher. If stocks pull back, we could see mortgage rates move lower this week.

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.

©Mortgage Commentary 2008

Tags: association of realtors, closing, durable goods orders, existing homes sales, Float, lackluster interest, mortgage credit, mortgage market, mortgage rates, national association of realtors, report, Thursday, tuesday morning, U.S., upward revisions, week