Daily Mortgage Rate Lock Advisory

Rate Lock Advisory – Thursday Oct. 30th

Rate Lock Advisory – Thursday Oct. 30th

Thursday’s bond market has opened in negative territory following the release of a stronger than expected GDP reading and early stock gains. The Dow has risen 132 points while the Nasdaq has gained 30 points. The bond market is currently down 17/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point.

This morning’s big news was the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP). 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. It revealed a decline of 0.3%, its worst reading in seven years. It also was only the fifth time in 17 years that the quarterly GDP has fallen. However, analysts were expecting to see a 0.5% decline, therefore, the numbers weren’t as bad as expected. Also contributing to this morning’s losses was a key inflation reading in the data that showed a larger than expected inc rease. This raised some inflation concerns and contributed to the weak opening in bonds.

The Labor Department posted weekly unemployment figures this morning, saying that 479,000 new claims were filed last week. This was nearly unchanged from the previous week, but was slightly higher than forecasts. However, there is no comparison between the importance of this data and the GDP. With the GDP being considered a very highly important report, the markets ignored the weekly claims figures.

There are three reports scheduled for release tomorrow. 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 tomor row. 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 economic 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 tomorrow 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.

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, closing, employer costs, GDP, inflation concerns, negative territory, quarter employment, quarterly gdp, release tomorrow, stock gains, U.S., U.S. It, unemployment figures, wage inflation

Rate Lock Advisory – Tuesday Sep. 23rd

Rate Lock Advisory – Tuesday Sep. 23rd

Tuesday’s bond market has opened up slightly as the markets try to stabilize. The stock markets are showing gains with the Dow up 36 points and the Nasdaq up 10 points. The bond market is currently up 7/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.

There is no relevant economic news scheduled for release again today. The rest of the week brings us the release of five economic reports for the markets to digest. Three of them are considered to be of low importance and likely will have little impact on mortgage rates. With none of the data being released until Wednesday, we will likely see the most activity in rates the latter part of the week.

The first piece of data comes tomorrow morning with the release of August’s Existing Home Sales report. The National Association of Realtors posts this data, giving us an indication of housing sector strength by tracking home resales in the U.S. It is expected to show a decline from July’s sales, however, this data is not considered to be of high importance to the bond market.

August’s Durable Goods Orders will be posted early Thursday morning. 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 drop in orders in the neighborhood of 1.3%. A larger decline could help bond prices and cause mortgage rates to drop Thursday. However, a smaller than expected decrease would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

Also Thursday morning will be the release of August’s New Home Sales. It is expected to show that sales of new homes rose slightly in August. As with Wednesday’s Existing Home Sales data, this report will likely not have a significant impact on 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… 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

Tags: association of realtors, big ticket items, bond, closing, durable goods orders, economic reports, existing home sales, existing home sales data, home resales, lock, national association of realtors, refinancing a home, Release, U.S., U.S. It

Rate Lock Advisory – Monday Sep. 22nd

Rate Lock Advisory – Monday Sep. 22nd

Monday’s bond market has opened in negative territory despite another round of stock market losses. The major stock indexes are kicking the week off with sizable losses. The Dow is currently down 160 points while the Nasdaq has fallen 30 points. The bond market is currently down 15/32, 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. The rest of the week brings us the release of five economic reports for the markets to digest. Three of them are considered to be of low importance and likely will have little impact on mortgage rates. With none of the data being released until Wednesday, we will likely see the most activity in rates the latter part of the week.

The first piece of data comes Wednesday morning with the release of August’s Existing Home Sales report. The National Association of Realtors posts this data, giving us an indi cation of housing sector strength by tracking home resales in the U.S. It is expected to show a decline from July’s sales, however, this data is not considered to be of high importance to the bond market.

August’s Durable Goods Orders will be posted early Thursday morning. 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 drop in orders in the neighborhood of 1.3%. A larger decline could help bond prices and cause mortgage rates to drop Thursday. However, a smaller than expected decrease would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

Also Thursday morning will be the release of August’s New Home Sales. It is expected to show that sales of new homes rose slightly in August. As with Wednesday’s Existing Home Sales data, this report will likely not have a significant impact on mortgage ra tes.

The first of Friday’s two releases is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. It is expected to show a slight increase from the previous estimate of a 3.3% annual rate.

The final report of the week is Friday’s release of the University of Michigan’s Index of Consumer Sentiment. This is the revised reading for September. The preliminary reading that was released earlier this month revealed a 73.1 reading. Analysts are expecting to see a downward revision, meaning confidence was not as higher as previously thought. A lower than expected reading should help improve mortgage rates Friday morning.

Overall, this will likely be a fairly active week for mortgage rates. The most important day will either be today or Thursday. We may see last week’s market volatility continue today and Thursday’s data is the most important of the week. Until the markets appear to have stabilized, I am holding the lock recommendations as it makes it difficult to predict what mortgage rates will do when we see such wild swings.

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.

Tags: association of realtors, bond, durable goods orders, existing home sales, existing home sales data, home resales, lock, major stock indexes, national association of realtors, negative territory, Release, stock market losses, Thursday, U.S., U.S. It, week

Daily Rate Lock Recommendation – 06/26/2008 11:41:00 AM EST

Thursday’s bond market has opened in positive territory as stock prices are showing significant losses during early trading. The stock markets are reacting to downgrades and fears of future problems in the banking sector. This has led to the Dow dropping 214 points and the Nasdaq falling 59 points. The bond market is the benefactor as investors seek safe haven from the volatility. With the bond market currently up 8/32, we will likely see an improvement in mortgage rates of approximately .125 – .250 of a discount point. There were a couple of pieces of economic data released this morning, but none are considered to be of high importance. The final reading to the 2nd quarter GDP matched forecasts at up 1.0%. This was slightly higher than the previous estimate that was announced last month. An important inflation component of the data also was revised higher by 0.1%, but has not impacted bond trading or mortgage rates. The National Association o f Realtors released May’s Existing Home Sales report that tracks home resales in the U.S. It showed an increase in sales compared to April’s numbers, but this data usually is of low importance to the markets and mortgage rates. The Labor Department gave us weekly unemployment figures from last week, saying that new claims for benefits rose to 384,000, when analysts were expecting to see a drop in claims. This brings the total back near the important benchmark of 400,000. However, this data also usually has little influence on mortgage rates. But, if the number of claims continues to move higher, this release will likely be watched more closely. Also worth noting is today’s 5-year Treasury Note auction. This sale can affect bond prices and therefore mortgage rates if investor interest in the sales are met with a strong or poor demand. The results will be posted at 1:00 PM ET today. If demand was strong, we should see bond prices improve during afte rnoon trading. However, a lackluster interest in the sale could lead to bond weakness later today and possibly higher mortgage rates. May’s Personal Income and Outlays data will be posted early tomorrow morning. This report gives us an indication of consumer ability to spend and current spending activity. Analysts are expecting to see an increase of 0.4% in income and a 0.7% rise in the spending portion of the report. Smaller than expected increases should be good news for the bond market 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… 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.

Tags: bond, bond prices, bond trading, closing, existing home sales, existing home sales report, home resales, inflation component, investor interest, lock, mortgage rates, quarter gdp, today, trading, U.S. It, unemployment figures