Daily Mortgage Rate Lock Advisory

Thursday’s bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday’s sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday’s record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.

This morning’s economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August’s level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were below forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.

The biggest surprise came from September’s Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.

The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week’s worth of claims, it had little impact on trading this morning.

The remaining two reports are both scheduled for release tomorrow morning. September’s Housing Starts is the first, but is the week’s least important piece of monthly data. It gives us an indication of housing sector strength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.

The last report of the week is October’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September’s final of 70.3.

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.

Thursday’s bond market has opened on positive territory following another round of early stock losses. The stock markets are posting sizable losses during early trading with the Dow down 220 points and the Nasdaq down 40 points. The bond market is currently up 7/32, which with yesterday’s late gains should improve this morning’s mortgage rates by approximately .250 – .375 of a discount point.

Yesterday afternoon’s release of the Fed Beige Book report indicated that the economy continues to slow and that inflationary pressure still remain elevated. Neither of those points really come as a surprise, but the comments about the economy slowing and words used such as soft and weak, helped bonds prices to move higher yesterday afternoon.

The 2nd Quarter Productivity numbers were posted this morning, showing a surprising jump in worker output. The 4.3% rise was well above forecasts and is good news for bonds and mortgage rates because higher levels of p roductivity allow the economy to grow without inflation fears.

The Labor Department reported that 444,000 new claims for unemployment benefits were filed last week. This was a sizable increase from the previous week, especially when analysts were expecting to see a decline in claims.

The Labor Department will also post August’s Employment report tomorrow morning. This report will give us the unemployment rate, number of new jobs added or lost and average hourly earnings during August. The ideal scenario for the bond market and mortgage rates is rising unemployment, a smaller than expected rise in new payrolls and earnings to remain unchanged. If we are that fortunate, I expect to see mortgage rates drop considerably tomorrow morning. Analysts are expecting to see the unemployment rate remain at 5.7% and 75,000 jobs lost in the month. Weaker then expected readings would be very good news for bonds and mortgage rates.

If I were considering f inancing/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.

Thursday’s bond market has opened in negative territory after this morning’s GDP reading fueled a stock rally. The stock markets are showing gains with the Dow up 143 points and the Nasdaq up 19 points. The bond market is currently down 5/32, but we will still see an improvement in this morning’s mortgage rates of approximately .125 of a discount point due to strength in bonds late yesterday.

Today’s update to the 2nd Quarter Gross Domestic Product (GDP) reading revealed a higher level of growth than what was expected. Last month’s preliminary reading revealed a 1.9% pace, but today’s revision showed a 3.3% annual rate. Analysts were expecting to see a 2.7% rate, meaning that the economy grew at a rate that was faster than what analysts had forecasted. That is bad news for bonds because it raises inflation concerns that drive bond prices lower.

The Labor Department said that 425,000 new claims for unemployment benefits were filed last week. This was the third straight week that new claims have dropped, but analysts were expecting to see this number.

There are two pieces of economic data scheduled for release tomorrow. The first is July’s Personal Income and Outlays and the second is the University of Michigan’s Index of Consumer Sentiment. The income and spending data measures consumer ability to spend and current spending habits. It is expected to show a decline of 0.2% in income and a 0.2% increase in spending. Weaker than expected numbers would be good news for the bond market and mortgage rates.

August’s revision to the University of Michigan’s Index of Consumer Sentiment is the second. It gives us a measurement of consumer willingness to spend. It is expected to show an upward revision from August’s preliminary reading of 61.7. If it revises lower, consumers were less confident about their personal financial situations than previously thought. This would be good news for the bond market and mortgage rates.

Also worth noting is that the bond market will close at 2:00 PM ET tomorrow ahead of the Labor Day holiday. It will remain closed Monday and reopen Tuesday morning. The stock markets will be closed Monday also. This may create a little more volatility during afternoon hours as traders prepare for the long weekend. However, I don’t think it will affect mortgage pricing.

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

Thursday’s bond market has opened in positive territory following favorable economic news and mixed stock reactions. The Dow is currently down 85 points while the Nasdaq has gained 11 points. The bond market is currently up 20/32, which should improve this morning’s mortgage rates by approximately .375 of a discount point..

The first piece of news posted this morning was the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic growth. It revealed a 1.9% annual rate of growth that was lower than forecasts. Today’s release also revised the previous two quarters readings lower than previously announced, which dropped the last quarter of 2007 into negative growth. That was the first quarter of negative growth since 2001. Furthermore, today’s release also showed a much weaker than expected reading in a key inflation reading of the data. Overall, this report was very f avorable for bonds and mortgage rates.

The second report of the day was the 2nd Quarter Employment Cost Index (ECI) that matched forecasts of a 0.7% rise. This index measures employers’ costs for wages and benefits and is considered to be an important measurement of wage inflation. Since it met forecasts its result shave had little impact on the bond market or mortgage pricing this morning.

Also worth noting was the Labor Department’s posting of last week’s new claims for unemployment benefits. They were expected to say that 395,000 new claims for benefits were filed but announced that 448,000 we filed. That number is well above the benchmark 400,000 and the second consecutive week of being above it. That raises concerns in the market that the employment sector is weakening, especially with tomorrow’s major report coming. If true, it would be very good news for the bond market and mortgage rates.

Tomorrow mornings brings us the release of two important reports, including one of the most important reports we see each month. This report gives us the U.S. unemployment rate, number of new jobs added to the economy and the average hourly earnings reading. The ideal situation for the bond market is rising unemployment, a loss of new jobs and little increase in earnings. This report is considered to be one of the single most important releases that we see each month.

While the today’s GDP release can be considered the single most important report in general, it is posted quarterly rather than monthly like the Employment report. Tomorrow’s Employment report is expected to show that the unemployment rate rose to 5.6% last month while approximately 75,000 new jobs were lost and a 0.3% increase in average earnings. The unemployment rate probably will not be much of a factor if the new jobs number varies from forecasts. However, due to the importance of the payroll numbers, we will undoubtedly see quite a bit of volatility in the markets and mortgage pricing.

Also scheduled for release tomorrow is the Institute for Supply Management’s (ISM) Manufacturing Index for July. This index measures manufacturer sentiment by surveying trade executives about business conditions during the previous month. A reading above 50.0 means that more surveyed executives felt that business improved than those who said it had worsened. It is expected to show a decline to a reading of 49.2. A smaller than expected reading would be great news for the bond market and would likely improve mortgage rates tomrorow, assuming that the Employment report doesn’t give us an major surprises.

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.

Thursday’s bond market has opened in positive territory following sizable stock losses and weaker than expected economic news. The Dow is down 110 points and the Nasdaq has lost 16 points. The bond market is currently up 12/32, which should improve this morning’s mortgage rates by approximately .250 – .375 of a discount point.

Neither of today’s economic releases ere considered to be high importance to the markets unfortunately, or we may have seen more of an improvement to mortgage rates. The National Association of Realtors said that home resales in the U.S. fell 2.6% last month. This was a larger drop than was forecasted. In addition, the Labor Department reported that 406,000 new claims for unemployment benefits were filed last week. This was a much larger increase than was expected and again crosses the important 400,000 benchmark.

Yesterday afternoon’s Beige Book release showed that economic activity slowed in most regions and that infla tion continued to rise. The slowing economic activity is good news for bonds, but the inflationary pressures are a threat to bonds and could drive prices lower and mortgage rates higher if they continue to rise. Overall, it didn’t reveal any significant surprises.

The results of today’s 5-year Treasury Note auction will be posted at 1:00 PM ET. If the auction was met with a strong demand from investors, bond prices may rise during afternoon trading and could lead to lower mortgage rates. However, if the sale was met with a poor demand, we could see bond prices fall and mortgage rates rise revise higher.

Tomorrow morning brings us the release of two of the week’s most important reports. The first will come from the Commerce Department when they will post June’s Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a decline of 0.3% after showing little change in new orders during May. This data gives us an indication of manu facturing sector strength by tracking orders at U.S. factories for big-ticket items. These are products that are expected to last at least three years. A stronger than expected number may lead to higher mortgage rates tomorrow morning. If it reveals a larger than expected drop, mortgage rates should improve tomorrow.

Also being released tomorrow is the final revision to July’s University of Michigan Index of Consumer Sentiment. Unless we see a drastic revision to the preliminary estimate of 56.6, I think the markets will probably shrug this news off.

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

Thursday’s bond market has opened in negative territory as stocks continue their upward move and inflation concerns make bonds less attractive to investors. Yesterday’s rally in bonds seem to be carrying over into this morning’s trading with the Dow up 58 points and the Nasdaq up 7 points. The bond market is currently down 5/32, which with yesterday’s late selling will likely push this morning’s mortgage rates higher by approximately .500 of a discount point compared to yesterday’s morning rates.

The minutes from the last FOMC meeting did raise some concern in the bond market yesterday and helped fuel the stock rally. Some of excerpts included indications that the Fed’s next move would likely be an increase to key short-term interest rates rather than another rate cut. This means that the Fed is more worried about inflation than a slowing economy. Since inflation erodes the value of a bond’s future fixed interest payments, this news sent mortgage related bon ds lower and mortgage rates higher.

Today’s only relevant data was June’s Housing Starts report that surprised many by showing an increase in starts of new homes. It was expected to show another decline in starts. However, this data is not considered to be of high importance and has not had much influence on today’s trading or mortgage pricing.

The Labor reported that 366,000 new claims for unemployment benefits were filed last week. This was an increase from the previous week, but not as high as analysts had expected. However, since this data tracks only a week’s worth of claims it also hasn’t affected mortgage rates this morning.

There is no relevant economic data scheduled for release tomorrow, meaning that stocks will likely heavily influence bond trading and mortgage rates. With this week’s volatility, we could see traders adjust portfolios ahead of the weekend. That could lead to further volatility in bonds and mortgage rates agai n tomorrow.

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.