The $8,000 first-time buyer tax credit program ends November 30 of 2009. Just 4 months away. That means buyers need to CLOSE on their homes by NOVEMBER 30th in order to receive the tax break.
Details: The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.
The American Recovery and Reinvestment Act of 2009 replaces The Housing and Economic Recovery Act of 2008 which only offered a $7500 tax credit. Also under the previous Housing and Economic Recovery Act of 2008, Home buyers were required to repay the tax credit to the government, without interest, over 15 years or when they sell the house, if there was sufficient capital gain from the sale. If there was insufficient profit, then the remaining credit payback would have been forgiven.
What is the home buyer tax credit? It is a tax refund for 10% of a primary home’s purchase price (up to $8K). The amount not used on your 2009 tax return will be refunded directly to you.
Who is eligible to receive the credit? First-time home buyers and those who have not owned a principal residence in the last three years prior to purchase.
Do income limits apply? Yes. The full amount is given to individuals who make up to $75K and married couples who make up to $150K per year (adjusted gross annual income). The credit amount phases out between $75K and $95K for individuals; $150K and $170K for joint filers.
If you want to take advantage of the home buyer tax credit, contact me to get prequalified for a a mortgage and to discuss your plans. Keep in mind it’s typically 45-60 days to close on a traditional real estate transaction (short sales can take much longer).
Friday, July 31, 2009
Thursday, July 30, 2009
Mortgage Rate Advice 07-30-2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Thursday’s bond market has opened in negative territory following strong stock gains and renewed fears about the amount of debt the government is selling. The stock markets are rallying around fairly positive earnings reports that have the Dow up 129 points and the Nasdaq up 35 points. The bond market is currently down 11/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point compared to yesterday’s morning rates.
Today’s only economic news was weekly unemployment claims from the Labor Department. They reported that 584,000 new claims for unemployment benefits were filed last week. This nearly matched forecasts and therefore has had no impact on this morning’s bond trading or mortgage rates.
Neither of yesterday’s afternoon events were favorable to bonds. The Fed Beige Book indicated that the economy is stabilizing in several regions of the U.S., which is bad for bonds because economic strength makes long-term securities such as mortgage-related bonds less attractive to investors. Yesterday’s 5-year Note sale did not go too well, leading many to believe there is little chance of a strong demand in today’s 7-year Note sale. If we do get another lackluster interest in today’s auction, we most likely will see further weakness in bonds this afternoon. That may cause upward revisions to mortgage rates after the results are posted at 1:00 PM ET.
There are two important releases scheduled to be posted tomorrow morning. The first is the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic activity. It is the sum of all goods and services produced in the U.S. and usually has a great deal of influence on the financial markets. This reading is arguably the single most important piece of data we get regularly. Current forecasts are estimating that the economy shrank at a 1.5% annual rate during the second quarter. A smaller decline will probably hurt bond prices, leading to higher mortgage rates tomorrow. But a larger than expected decline could fuel a bond market rally and lead to lower mortgage pricing.
The second report of the day is the 2nd Quarter Employment Cost Index (ECI) that measures employers’ costs for wages and benefits. It is considered to be an important measurement of wage inflation and can have a pretty big impact on the bond market and mortgage rates if it varies much from forecasts. If it shows a rapid increase, raising inflation concerns, the bond market may drop and mortgage rates rise. It is expected to reveal an increase of 0.3%.
I would not be surprised to see afternoon revisions to mortgage rates this afternoon and a sizable move tomorrow. If today’s auction does not show a fairly strong interest from investors, particularly international buyers, and tomorrow’s GDP reading gives us a stronger than expected reading, those changes will probably reflect higher rates. Accordingly, please proceed cautiously if still floating an interest rate.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Massachusetts borrowers should call me 800-941-5616 or email me with questions: jeff@starmortgage.com
Thursday’s bond market has opened in negative territory following strong stock gains and renewed fears about the amount of debt the government is selling. The stock markets are rallying around fairly positive earnings reports that have the Dow up 129 points and the Nasdaq up 35 points. The bond market is currently down 11/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point compared to yesterday’s morning rates.
Today’s only economic news was weekly unemployment claims from the Labor Department. They reported that 584,000 new claims for unemployment benefits were filed last week. This nearly matched forecasts and therefore has had no impact on this morning’s bond trading or mortgage rates.
Neither of yesterday’s afternoon events were favorable to bonds. The Fed Beige Book indicated that the economy is stabilizing in several regions of the U.S., which is bad for bonds because economic strength makes long-term securities such as mortgage-related bonds less attractive to investors. Yesterday’s 5-year Note sale did not go too well, leading many to believe there is little chance of a strong demand in today’s 7-year Note sale. If we do get another lackluster interest in today’s auction, we most likely will see further weakness in bonds this afternoon. That may cause upward revisions to mortgage rates after the results are posted at 1:00 PM ET.
There are two important releases scheduled to be posted tomorrow morning. The first is the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic activity. It is the sum of all goods and services produced in the U.S. and usually has a great deal of influence on the financial markets. This reading is arguably the single most important piece of data we get regularly. Current forecasts are estimating that the economy shrank at a 1.5% annual rate during the second quarter. A smaller decline will probably hurt bond prices, leading to higher mortgage rates tomorrow. But a larger than expected decline could fuel a bond market rally and lead to lower mortgage pricing.
The second report of the day is the 2nd Quarter Employment Cost Index (ECI) that measures employers’ costs for wages and benefits. It is considered to be an important measurement of wage inflation and can have a pretty big impact on the bond market and mortgage rates if it varies much from forecasts. If it shows a rapid increase, raising inflation concerns, the bond market may drop and mortgage rates rise. It is expected to reveal an increase of 0.3%.
I would not be surprised to see afternoon revisions to mortgage rates this afternoon and a sizable move tomorrow. If today’s auction does not show a fairly strong interest from investors, particularly international buyers, and tomorrow’s GDP reading gives us a stronger than expected reading, those changes will probably reflect higher rates. Accordingly, please proceed cautiously if still floating an interest rate.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Massachusetts borrowers should call me 800-941-5616 or email me with questions: jeff@starmortgage.com
Wednesday, July 29, 2009
Massachusetts Mortgage Rate Commentary 7/29/2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Wednesday’s bond market has opened in positive ground following the release of weaker than expected economic data and another soft opening in stocks. The Dow is currently down 37 points while the Nasdaq has slid 10 points. The bond market is currently up 11/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point over yesterday’s morning rates.
The Commerce Department reported this morning that new orders for durable goods fell 2.5% last month. This was much weaker than the 0.5% decline that was expected, indicating that manufacturing activity for big-ticket items is slowing. That is good news for bonds and mortgage rates because a slowing manufacturing sector makes an economic recovery less likely anytime soon. However, a secondary reading that tracks new orders excluding the most volatile transportation-related orders showed a 1.1% increase. That was much higher than analysts were expecting, but fortunately bond traders have ignored the news.
We have an afternoon release that may affect bond trading and mortgage rates. The Federal Reserve will release its Beige Book report at 2:00 ET today. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke’s testimony to Congress last week gave us a recent update, I don’t think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates this afternoon as a result of this report, but the possibly does exist.
Also today is the 5-year Treasury Note auction. Results of the sale will be posted at 1:00 PM ET. If it was met with a strong demand, we may see bond prices rise and mortgage rates fall during afternoon trading. However, a lackluster interest could lead to higher mortgage rates later today.
There is no relevant monthly or quarterly economic data scheduled for release tomorrow. The Labor Department will give us last week’s unemployment figures, but this data is not considered to be of high importance because it basically tracks only a week’s worth of new claims. It is expected to show that 585,000 new claims for unemployment benefits were filed last week. The larger the number, the better the news for bonds and mortgage rates. But, unless it varies greatly from forecasts, I don’t see this news having much of an influence on bond trading or mortgage rates 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Call me 800-941-5616 or email me with questions: jeff@starmortgage.com
Wednesday’s bond market has opened in positive ground following the release of weaker than expected economic data and another soft opening in stocks. The Dow is currently down 37 points while the Nasdaq has slid 10 points. The bond market is currently up 11/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point over yesterday’s morning rates.
The Commerce Department reported this morning that new orders for durable goods fell 2.5% last month. This was much weaker than the 0.5% decline that was expected, indicating that manufacturing activity for big-ticket items is slowing. That is good news for bonds and mortgage rates because a slowing manufacturing sector makes an economic recovery less likely anytime soon. However, a secondary reading that tracks new orders excluding the most volatile transportation-related orders showed a 1.1% increase. That was much higher than analysts were expecting, but fortunately bond traders have ignored the news.
We have an afternoon release that may affect bond trading and mortgage rates. The Federal Reserve will release its Beige Book report at 2:00 ET today. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke’s testimony to Congress last week gave us a recent update, I don’t think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates this afternoon as a result of this report, but the possibly does exist.
Also today is the 5-year Treasury Note auction. Results of the sale will be posted at 1:00 PM ET. If it was met with a strong demand, we may see bond prices rise and mortgage rates fall during afternoon trading. However, a lackluster interest could lead to higher mortgage rates later today.
There is no relevant monthly or quarterly economic data scheduled for release tomorrow. The Labor Department will give us last week’s unemployment figures, but this data is not considered to be of high importance because it basically tracks only a week’s worth of new claims. It is expected to show that 585,000 new claims for unemployment benefits were filed last week. The larger the number, the better the news for bonds and mortgage rates. But, unless it varies greatly from forecasts, I don’t see this news having much of an influence on bond trading or mortgage rates 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Call me 800-941-5616 or email me with questions: jeff@starmortgage.com
Tuesday, July 28, 2009
Mass Mortgage Rate Commentary 07.28.2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Tuesday’s bond market has opened in positive ground following early stock weakness and a weaker than expected consumer confidence reading. The stock markets are showing losses with the Dow down 34 points and the Nasdaq down 6 points. The bond market is currently up 14/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.
The Conference Board gave us today’s important data with the release of their Consumer Confidence Index (CCI) for July. This index measures consumer sentiment about their personal financial situations, giving us an idea of consumer willingness to spend. It showed a reading of 46.6 that fell short of forecasts by a couple of points. This is good news for bonds and mortgage rates because a less optimistic consumer is less likely to make a large purchase in the near future, limiting economic growth.
Tomorrow brings us two reports that may influence mortgage rates. The first will come from the Commerce Department when they post June’s Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a decline in news orders of 0.5% from May to June. This data gives us an indication of manufacturing 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 much larger than expected decline, mortgage rates should drop. It should be noted that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not move mortgage rates much.
The Federal Reserve will release its Beige Book report at 2:00 PM ET tomorrow afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke’s testimony to Congress last week gave us a recent update, I don’t think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates tomorrow afternoon as a result of this report, but the possibly does exist.
Also worth mentioning are a couple of Treasury auctions that may affect bond trading and mortgage rates this week. The two most important are tomorrow’s 5-year and Thursday’s 7-year Note sales. The last auctions of the 5-year and 7-year securities were met with very good demand from investors, leading to bond strength following the sales. But there is a record amount of debt being sold this week, so we need to proceed with caution over the next few days. Results of the sales will be posted 1:00 PM ET each day. If investor interest is strong again in Wednesday and Thursday’s sales, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates during afternoon trading those 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Call me 800-941-5616 or email me with questions: jeff@starmortgage.com
Tuesday’s bond market has opened in positive ground following early stock weakness and a weaker than expected consumer confidence reading. The stock markets are showing losses with the Dow down 34 points and the Nasdaq down 6 points. The bond market is currently up 14/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.
The Conference Board gave us today’s important data with the release of their Consumer Confidence Index (CCI) for July. This index measures consumer sentiment about their personal financial situations, giving us an idea of consumer willingness to spend. It showed a reading of 46.6 that fell short of forecasts by a couple of points. This is good news for bonds and mortgage rates because a less optimistic consumer is less likely to make a large purchase in the near future, limiting economic growth.
Tomorrow brings us two reports that may influence mortgage rates. The first will come from the Commerce Department when they post June’s Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a decline in news orders of 0.5% from May to June. This data gives us an indication of manufacturing 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 much larger than expected decline, mortgage rates should drop. It should be noted that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not move mortgage rates much.
The Federal Reserve will release its Beige Book report at 2:00 PM ET tomorrow afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke’s testimony to Congress last week gave us a recent update, I don’t think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates tomorrow afternoon as a result of this report, but the possibly does exist.
Also worth mentioning are a couple of Treasury auctions that may affect bond trading and mortgage rates this week. The two most important are tomorrow’s 5-year and Thursday’s 7-year Note sales. The last auctions of the 5-year and 7-year securities were met with very good demand from investors, leading to bond strength following the sales. But there is a record amount of debt being sold this week, so we need to proceed with caution over the next few days. Results of the sales will be posted 1:00 PM ET each day. If investor interest is strong again in Wednesday and Thursday’s sales, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates during afternoon trading those 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Call me 800-941-5616 or email me with questions: jeff@starmortgage.com
S&P Says Home Prices Improve for Fourth Straight Month
S&P Says Home Prices Improve for Fourth Straight Month
Home prices across the nation improved for their fourth consecutive month in May but remain about 17% lower than one year ago, according to the S&P Case-Shiller Home Price Index.
The 10-City and 20-City Composites are 16.8% and 17.1% lower, respectively, compared to May 2008. Historically, those are major declines, but in the current context they represent the slowest annual price drops in close to a year. Just one month before…
To view the rest of the story and see charts and graphs click here
Home prices across the nation improved for their fourth consecutive month in May but remain about 17% lower than one year ago, according to the S&P Case-Shiller Home Price Index.
The 10-City and 20-City Composites are 16.8% and 17.1% lower, respectively, compared to May 2008. Historically, those are major declines, but in the current context they represent the slowest annual price drops in close to a year. Just one month before…
To view the rest of the story and see charts and graphs click here
Monday, July 27, 2009
Mortgage Regulation Change for 7/30/2009
The Mortgage Disclosure Improvement Act
On July 30th, 2009 the Mortgage Disclosure Improvement Act will become effective. The underlying initiative of the MDIA is to provide ample time for a borrower who makes a written application for a home mortgage to review a Truth In Lending Disclosure in advance of incurring any expenses, excluding reasonable credit report fees. The Truth In Lending Disclosure is better know as a TIL.
The Mortgage Disclosure Improvement Act has a major impact on the timing of the TIL that can effect the closing date of residential mortgage loans. The intention of this article is to help all parties of a purchase or refinance mortgage loan transaction understand how the MDIA can affect a closing date.
No fees, other than a credit report fee, may be paid by the consumer until after the consumer has received the initial TIL. The TIL is considered received by the consumer three business days after it has been mailed, not including the day of mailing, then the appraisal fee and any other up front fees may be collected for further processing of the loan application.
This is very important for the timing of a loan closing since an application must include income and asset verification at the time of signing a loan application for a TIL to be produced. Any delay of this information up front will likely affect the time necessary to order an appraisal to make the application complete for a timely closing.
Furthermore, if the Annual Percentage Rate (better known as the APR) should change prior to closing then a new TIL must be produced and a 3 day mail time and 3 day review time must be allotted to the consumer. Under this circumstance a closing can take place on the 7th business day from mailing. Some of the factors that could effect the APR changing from the initial TIL being issued is a consumer locking a rate after the application is made, (Example maybe the borrower changes from a loan with no points to paying points to lower the rate) any rate lock extension fees should a loan not meet the closing date anticipated at the time of the initial rate lock, and any closing agent fees that may change prior to closing.
Business days are defined as Monday through Saturday excluding federal holidays. As an example lets assume a loan application is made and a TIL is produced on a Monday. Tuesday would be day 1 of the 3 day mail time required. Friday would be the first day the appraisal and any other up front fees necessary for processing the loan application can be collected.
Here is another example and why it will be very important to consider all variables when locking a mortgage rate. The application is taken at 6PM on a Friday evening. Although we may be ale to send the application that night to the lender they are most likely not working on Saturday or Sunday to receive the application and send the TIL. The earliest the TIL would be created and sent would be Monday. Leaving 3 business days for the receipt of the TIL, the earliest possible day for ordering the appraisal would be the following Friday. One week has past since the time of application.
Star Mortgage is taking a proactive approach to the MDIA by suggesting to all consumers to make application on purchase transactions as early as possible, lock in the terms of their loan as early as possible, and requiring closing agents to provide preliminary HUD settlement statements at the time of the title order being placed by Star Mortgage that will list all their fees.
Knowing that not all transactions are alike, if all parties to a purchase or refinance transaction can understand the possible timing implications; my hope is that your loans will still continue to close as smoothly as you would expect them to.
Please feel free to call Jeff Drew at Star Mortgage at 1-800-941-5616 should you need further clarification. Thank you for your continued business.
On July 30th, 2009 the Mortgage Disclosure Improvement Act will become effective. The underlying initiative of the MDIA is to provide ample time for a borrower who makes a written application for a home mortgage to review a Truth In Lending Disclosure in advance of incurring any expenses, excluding reasonable credit report fees. The Truth In Lending Disclosure is better know as a TIL.
The Mortgage Disclosure Improvement Act has a major impact on the timing of the TIL that can effect the closing date of residential mortgage loans. The intention of this article is to help all parties of a purchase or refinance mortgage loan transaction understand how the MDIA can affect a closing date.
No fees, other than a credit report fee, may be paid by the consumer until after the consumer has received the initial TIL. The TIL is considered received by the consumer three business days after it has been mailed, not including the day of mailing, then the appraisal fee and any other up front fees may be collected for further processing of the loan application.
This is very important for the timing of a loan closing since an application must include income and asset verification at the time of signing a loan application for a TIL to be produced. Any delay of this information up front will likely affect the time necessary to order an appraisal to make the application complete for a timely closing.
Furthermore, if the Annual Percentage Rate (better known as the APR) should change prior to closing then a new TIL must be produced and a 3 day mail time and 3 day review time must be allotted to the consumer. Under this circumstance a closing can take place on the 7th business day from mailing. Some of the factors that could effect the APR changing from the initial TIL being issued is a consumer locking a rate after the application is made, (Example maybe the borrower changes from a loan with no points to paying points to lower the rate) any rate lock extension fees should a loan not meet the closing date anticipated at the time of the initial rate lock, and any closing agent fees that may change prior to closing.
Business days are defined as Monday through Saturday excluding federal holidays. As an example lets assume a loan application is made and a TIL is produced on a Monday. Tuesday would be day 1 of the 3 day mail time required. Friday would be the first day the appraisal and any other up front fees necessary for processing the loan application can be collected.
Here is another example and why it will be very important to consider all variables when locking a mortgage rate. The application is taken at 6PM on a Friday evening. Although we may be ale to send the application that night to the lender they are most likely not working on Saturday or Sunday to receive the application and send the TIL. The earliest the TIL would be created and sent would be Monday. Leaving 3 business days for the receipt of the TIL, the earliest possible day for ordering the appraisal would be the following Friday. One week has past since the time of application.
Star Mortgage is taking a proactive approach to the MDIA by suggesting to all consumers to make application on purchase transactions as early as possible, lock in the terms of their loan as early as possible, and requiring closing agents to provide preliminary HUD settlement statements at the time of the title order being placed by Star Mortgage that will list all their fees.
Knowing that not all transactions are alike, if all parties to a purchase or refinance transaction can understand the possible timing implications; my hope is that your loans will still continue to close as smoothly as you would expect them to.
Please feel free to call Jeff Drew at Star Mortgage at 1-800-941-5616 should you need further clarification. Thank you for your continued business.
Mortgage Market Commentary 07/27/2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Monday’s bond market has opened in negative territory as investors prepare for this week’s events. The stock markets are showing losses with the Dow down 41 points and the Nasdaq down 14 points. The bond market is currently down 17/32, which should push this morning’s mortgage rates higher by approximately .250 of a discount point over Friday’s morning rates.
Today’s only relevant economic news was June’s New Home Sales that revealed a surprising jump of 11% in sales of newly constructed homes. This was a much larger than expected increase and put sales at their highest level since last November, hinting that the housing sector may be stabilizing. This is negative news for bonds and mortgage rates, but today’s weak opening in bonds has more to do with the amount of government debt being sold this week (over $200 billion) than this data.
Tomorrow’s key report is July’s Consumer Confidence Index (CCI) at 10:00 AM ET. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. This is important because consumer spending makes up two-thirds of the U.S. economy. If the CCI reading is weaker than expected, we may see bond prices rise and mortgage rates drop Tuesday. Current forecasts are calling for a reading of 48.7, which would be a lightly lower reading than June’s reading.
Also worth mentioning are a couple of Treasury auctions that may affect bond trading and mortgage rates this week. The two most important are Wednesday’s 5-year and Thursday’s 7-year Note sales, but there are auctions everyday except Friday. The last auctions of the 5-year and 7-year securities were met with very good demand from investors. That led to bond strength following the sales. But this is a record amount of debt being sold this week, so we need to proceed with caution over the next few days. Results of the sales will be posted 1:00 PM ET each day. If investor interest is strong again in Wednesday and Thursday’s sales, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates during afternoon trading those days.
Overall, it likely will be a fairly active week in the mortgage market. With several important economic reports on tap, we will likely see noticeable movement in mortgage rates more than one day. The most important report of the week is Friday’s preliminary GDP reading, making it one of the most important days of the week. But it is difficult to say which day we can expect to see the most movement in rates as several of releases and scheduled events have the potential to influence 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Call me 800-941-5616 or email me with questions: jeff@starmortgage.com
Monday’s bond market has opened in negative territory as investors prepare for this week’s events. The stock markets are showing losses with the Dow down 41 points and the Nasdaq down 14 points. The bond market is currently down 17/32, which should push this morning’s mortgage rates higher by approximately .250 of a discount point over Friday’s morning rates.
Today’s only relevant economic news was June’s New Home Sales that revealed a surprising jump of 11% in sales of newly constructed homes. This was a much larger than expected increase and put sales at their highest level since last November, hinting that the housing sector may be stabilizing. This is negative news for bonds and mortgage rates, but today’s weak opening in bonds has more to do with the amount of government debt being sold this week (over $200 billion) than this data.
Tomorrow’s key report is July’s Consumer Confidence Index (CCI) at 10:00 AM ET. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. This is important because consumer spending makes up two-thirds of the U.S. economy. If the CCI reading is weaker than expected, we may see bond prices rise and mortgage rates drop Tuesday. Current forecasts are calling for a reading of 48.7, which would be a lightly lower reading than June’s reading.
Also worth mentioning are a couple of Treasury auctions that may affect bond trading and mortgage rates this week. The two most important are Wednesday’s 5-year and Thursday’s 7-year Note sales, but there are auctions everyday except Friday. The last auctions of the 5-year and 7-year securities were met with very good demand from investors. That led to bond strength following the sales. But this is a record amount of debt being sold this week, so we need to proceed with caution over the next few days. Results of the sales will be posted 1:00 PM ET each day. If investor interest is strong again in Wednesday and Thursday’s sales, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates during afternoon trading those days.
Overall, it likely will be a fairly active week in the mortgage market. With several important economic reports on tap, we will likely see noticeable movement in mortgage rates more than one day. The most important report of the week is Friday’s preliminary GDP reading, making it one of the most important days of the week. But it is difficult to say which day we can expect to see the most movement in rates as several of releases and scheduled events have the potential to influence 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Call me 800-941-5616 or email me with questions: jeff@starmortgage.com
The Mortgage Market for week of 7/26/200
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
There are several important reports scheduled for release this week that are likely to affect mortgage pricing. The first is tomorrow’s release of June’s New Home Sales that gives us a measurement of housing sector strength and mortgage credit demand. It is expected to show an increase in sales of newly constructed homes, indicating that the housing sector gained some strength. That would be considered negative news for bonds, but since this data tracks only 25% of all home sales it usually has little impact on the bond market and mortgage rates unless it varies greatly from forecasts.
The Conference Board will post their Consumer Confidence Index (CCI) for July late Tuesday morning. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. This is important because consumer spending makes up two-thirds of the U.S. economy. If the CCI reading is weaker than expected, we may see bond prices rise and mortgage rates drop Tuesday. Current forecasts are calling for a reading of 48.7, which would be a lightly lower reading than June’s reading.
Wednesday brings us two events that are relevant to mortgage rates. 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 in news orders of 0.5% from May to June. This data gives us an indication of manufacturing 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 Wednesday morning. If it reveals a much larger than expected decline, mortgage rates should drop. It should be noted that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not move mortgage rates much. The Federal Reserve will release its Beige Book report Wednesday afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke’s testimony to Congress last week gave us a recent update, I don’t think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates Wednesday afternoon as a result of this report.
There is no relevant monthly or quarterly data scheduled for release Thursday, but there are two releases scheduled to be posted Friday morning. The first is the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic activity. It is the sum of all goods and services produced in the U.S. and usually has a great deal of influence on the financial markets. This reading is arguably the single most important we get regularly. Current forecasts are estimating that the economy shrank at a 1.5% annual rate during the second quarter. A smaller decline will probably hurt bond prices, leading to higher mortgage rates Friday. But a larger than expected decline would likely fuel a bond market rally and lead to lower mortgage pricing. The second report of the day Friday is the 2nd Quarter Employment Cost Index (ECI) that measures employers’ costs for wages and benefits. It is considered to be an important measurement of wage inflation and can have a pretty big impact on the bond market and mortgage rates if it varies much from forecasts. If it shows a rapid increase, raising inflation concerns, the bond market may drop and mortgage rates rise. It is expected to reveal an increase of 0.3%.
Also worth mentioning are a couple of Treasury auctions that may affect bond trading and mortgage rates this week. The two most important are Wednesday’s 5-year Note and Thursday’s 7-year Note sales. The last auctions of these securities were met with very good demand from investors. That led to bond strength following the sales. Results of this week’s auctions will be posted 1:00 PM ET each day. If investor interest is strong again, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates Wednesday and Thursday afternoons.
Overall, it likely will be a fairly active week in the mortgage market. With several important economic reports on tap, we will likely see noticeable movement in mortgage rates more than one day. The most important report of the week is Friday’s preliminary GDP reading, making it one of the most important days of the week. But it is difficult to say which day we can expect to see the most movement in rates as several of releases and scheduled events have the potential to influence 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Call me 800-941-5616 or email me with questions: jeff@starmortgage.com
There are several important reports scheduled for release this week that are likely to affect mortgage pricing. The first is tomorrow’s release of June’s New Home Sales that gives us a measurement of housing sector strength and mortgage credit demand. It is expected to show an increase in sales of newly constructed homes, indicating that the housing sector gained some strength. That would be considered negative news for bonds, but since this data tracks only 25% of all home sales it usually has little impact on the bond market and mortgage rates unless it varies greatly from forecasts.
The Conference Board will post their Consumer Confidence Index (CCI) for July late Tuesday morning. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. This is important because consumer spending makes up two-thirds of the U.S. economy. If the CCI reading is weaker than expected, we may see bond prices rise and mortgage rates drop Tuesday. Current forecasts are calling for a reading of 48.7, which would be a lightly lower reading than June’s reading.
Wednesday brings us two events that are relevant to mortgage rates. 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 in news orders of 0.5% from May to June. This data gives us an indication of manufacturing 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 Wednesday morning. If it reveals a much larger than expected decline, mortgage rates should drop. It should be noted that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not move mortgage rates much. The Federal Reserve will release its Beige Book report Wednesday afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke’s testimony to Congress last week gave us a recent update, I don’t think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates Wednesday afternoon as a result of this report.
There is no relevant monthly or quarterly data scheduled for release Thursday, but there are two releases scheduled to be posted Friday morning. The first is the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic activity. It is the sum of all goods and services produced in the U.S. and usually has a great deal of influence on the financial markets. This reading is arguably the single most important we get regularly. Current forecasts are estimating that the economy shrank at a 1.5% annual rate during the second quarter. A smaller decline will probably hurt bond prices, leading to higher mortgage rates Friday. But a larger than expected decline would likely fuel a bond market rally and lead to lower mortgage pricing. The second report of the day Friday is the 2nd Quarter Employment Cost Index (ECI) that measures employers’ costs for wages and benefits. It is considered to be an important measurement of wage inflation and can have a pretty big impact on the bond market and mortgage rates if it varies much from forecasts. If it shows a rapid increase, raising inflation concerns, the bond market may drop and mortgage rates rise. It is expected to reveal an increase of 0.3%.
Also worth mentioning are a couple of Treasury auctions that may affect bond trading and mortgage rates this week. The two most important are Wednesday’s 5-year Note and Thursday’s 7-year Note sales. The last auctions of these securities were met with very good demand from investors. That led to bond strength following the sales. Results of this week’s auctions will be posted 1:00 PM ET each day. If investor interest is strong again, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates Wednesday and Thursday afternoons.
Overall, it likely will be a fairly active week in the mortgage market. With several important economic reports on tap, we will likely see noticeable movement in mortgage rates more than one day. The most important report of the week is Friday’s preliminary GDP reading, making it one of the most important days of the week. But it is difficult to say which day we can expect to see the most movement in rates as several of releases and scheduled events have the potential to influence 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. See testimonials. Call me 800-941-5616 or email me with questions: jeff@starmortgage.com
Monday, July 13, 2009
Mortgage Commentary week of 7-12-2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
This week brings us the release of five important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting.
The first piece of data comes Tuesday morning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.8% increase in the overall reading and a 0.1% rise in the core data reading. The core reading is the more important of the two because it excludes more volatile food and energy prices. The bond market should react quite favorably if we get weaker than expected readings, but a larger than expected jump in the core reading could send mortgage rates higher Tuesday. June’s Retail Sales report will also be posted Tuesday. The Commerce Department is expected to say that sales at retail establishments rose 0.5% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.
Next on tap is Wednesday’s release of June’s Consumer Price Index (CPI). It is a mirror of Tuesday’s PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.6% increase in the overall index and a 0.1% rise in the core data. The core data is also considered to be the key reading because it gives us a more stable measure of inflation. Higher than expected readings could raise inflation fears and push mortgage rates higher both days. June’s Industrial Production data will also be posted Wednesday morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.6% decline in production, indicating that the manufacturing sector showed weakening conditions during the month. That is basically good news for bonds, however, with seasonal shutdowns and auto-related weakness likely included, a sizable decline should not surprise many.
Also worth noting about Wednesday is the release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting or give any indication of the Fed’s possible next move with monetary policy.
There is no relevant monthly or quarterly data scheduled for release Thursday. Friday’s only relevant data is June’s Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a small decline in new starts of housing projects. However, I don’t see this data having much of an impact on mortgage rates Friday unless it varies greatly from forecasts.
Overall, I think we will probably see the most movement in mortgage pricing Tuesday or Wednesday due to the importance of the economic releases those days. The week’s corporate earnings also have the potential to heavily influence bond trading and mortgage rates via stock market swings. If the major earnings reports show better than expected results, we can expect to see the major stock indexes rally. This would lead to a shift of funds from bonds to stocks and in the process bonds will fall. The results would be higher mortgage rates. The other possibility is weaker than expected results from the key companies that would lead to stock selling and a bond market rally. One thing is safe bet though- it will likely be an active week for the markets and mortgage rates. Accordingly, please proceed cautiously if still floating an interest rate.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com
This week brings us the release of five important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting.
The first piece of data comes Tuesday morning with the release of June’s Producer Price Index (PPI). The PPI is very important because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.8% increase in the overall reading and a 0.1% rise in the core data reading. The core reading is the more important of the two because it excludes more volatile food and energy prices. The bond market should react quite favorably if we get weaker than expected readings, but a larger than expected jump in the core reading could send mortgage rates higher Tuesday. June’s Retail Sales report will also be posted Tuesday. The Commerce Department is expected to say that sales at retail establishments rose 0.5% last month. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. A smaller than expected increase in sales could help fuel a bond rally and lead to lower mortgage rates, depending on the results of the PPI report.
Next on tap is Wednesday’s release of June’s Consumer Price Index (CPI). It is a mirror of Tuesday’s PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.6% increase in the overall index and a 0.1% rise in the core data. The core data is also considered to be the key reading because it gives us a more stable measure of inflation. Higher than expected readings could raise inflation fears and push mortgage rates higher both days. June’s Industrial Production data will also be posted Wednesday morning. This data measures output and U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.6% decline in production, indicating that the manufacturing sector showed weakening conditions during the month. That is basically good news for bonds, however, with seasonal shutdowns and auto-related weakness likely included, a sizable decline should not surprise many.
Also worth noting about Wednesday is the release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting or give any indication of the Fed’s possible next move with monetary policy.
There is no relevant monthly or quarterly data scheduled for release Thursday. Friday’s only relevant data is June’s Housing Starts report. This data gives us an indication of housing sector strength, but is not considered to be of high importance. Analysts are currently expecting to see a small decline in new starts of housing projects. However, I don’t see this data having much of an impact on mortgage rates Friday unless it varies greatly from forecasts.
Overall, I think we will probably see the most movement in mortgage pricing Tuesday or Wednesday due to the importance of the economic releases those days. The week’s corporate earnings also have the potential to heavily influence bond trading and mortgage rates via stock market swings. If the major earnings reports show better than expected results, we can expect to see the major stock indexes rally. This would lead to a shift of funds from bonds to stocks and in the process bonds will fall. The results would be higher mortgage rates. The other possibility is weaker than expected results from the key companies that would lead to stock selling and a bond market rally. One thing is safe bet though- it will likely be an active week for the markets and mortgage rates. Accordingly, please proceed cautiously if still floating an interest rate.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... 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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com
Wednesday, July 8, 2009
Mortgage Rate Advice 07-08-09
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Wednesday’s bond market has opened flat again as investors prepare for the events of the next couple of days. The stock markets are showing minor gains after yesterday’s afternoon sell-off. The Dow is currently up 28 points while the Nasdaq is nearly unchanged. The bond market is currently up 3/32, which will likely keep this morning’s mortgage rates near yesterday’s morning rates.
There is no relevant economic data scheduled for release yet again today. But we do have two issues that are quite relevant to bond trading and mortgage rates. The first is today’s 10-year Treasury Note auction. Results of the sale will be posted at 1:00 PM ET. If the sale was met with a strong demand from investors, particularly international buyers, we could see bonds rally during afternoon trading. The flip side is that a weak demand would indicate a waning interest in U.S. securities, making current bonds less appealing to investors. That likely would drive bond prices lower and mortgage rates higher this afternoon.
The second event is the release of quarterly earnings from Dow component Alcoa after the stock markets close today. They traditionally are the first major company to release earnings each quarter. If their results and forecasts fall short of expectations, we can expect to see stocks fall during after-hours trading and early tomorrow morning. The stock weakness could drive bonds higher as traders seek safe-haven in bonds. But if they beat forecasts, we will probably see stocks move higher, drawing funds from bonds and leading to higher mortgage rates in the morning.
The only semi-relevant economic data scheduled for release tomorrow morning are weekly unemployment figures from the Labor Department. They are expected to say that 600,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week’s total. However, this data usually has a limited impact on bond trading and mortgage rates since it gives us only a week’s worth of new claims. With no other relevant economic data on the calendar tomorrow and little news already posted this week, we may see a slightly stronger than usual reaction to the results. But I don’t see this data being a market mover tomorrow or significantly affecting mortgage rates.
Also tomorrow is the Treasury’s sale of 30-year Bonds. This sale is less likely to affect mortgage rates than today’s 10-year Note sale does, but that doesn’t mean we can ignore its results. The same principals apply as today’s sale—a strong demand is favorable for bonds while a lackluster interest could lead to bond weakness and potential increases to mortgage rates.
Friday morning gives us some factual monthly economic data for the markets to digest. Neither of the two reports are considered to be of high importance to the financial markets or mortgage rates, but do carry enough weight to cause some movement if their results vary greatly from forecasts. We will touch more on those in tomorrow’s commentary.
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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com
Wednesday’s bond market has opened flat again as investors prepare for the events of the next couple of days. The stock markets are showing minor gains after yesterday’s afternoon sell-off. The Dow is currently up 28 points while the Nasdaq is nearly unchanged. The bond market is currently up 3/32, which will likely keep this morning’s mortgage rates near yesterday’s morning rates.
There is no relevant economic data scheduled for release yet again today. But we do have two issues that are quite relevant to bond trading and mortgage rates. The first is today’s 10-year Treasury Note auction. Results of the sale will be posted at 1:00 PM ET. If the sale was met with a strong demand from investors, particularly international buyers, we could see bonds rally during afternoon trading. The flip side is that a weak demand would indicate a waning interest in U.S. securities, making current bonds less appealing to investors. That likely would drive bond prices lower and mortgage rates higher this afternoon.
The second event is the release of quarterly earnings from Dow component Alcoa after the stock markets close today. They traditionally are the first major company to release earnings each quarter. If their results and forecasts fall short of expectations, we can expect to see stocks fall during after-hours trading and early tomorrow morning. The stock weakness could drive bonds higher as traders seek safe-haven in bonds. But if they beat forecasts, we will probably see stocks move higher, drawing funds from bonds and leading to higher mortgage rates in the morning.
The only semi-relevant economic data scheduled for release tomorrow morning are weekly unemployment figures from the Labor Department. They are expected to say that 600,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week’s total. However, this data usually has a limited impact on bond trading and mortgage rates since it gives us only a week’s worth of new claims. With no other relevant economic data on the calendar tomorrow and little news already posted this week, we may see a slightly stronger than usual reaction to the results. But I don’t see this data being a market mover tomorrow or significantly affecting mortgage rates.
Also tomorrow is the Treasury’s sale of 30-year Bonds. This sale is less likely to affect mortgage rates than today’s 10-year Note sale does, but that doesn’t mean we can ignore its results. The same principals apply as today’s sale—a strong demand is favorable for bonds while a lackluster interest could lead to bond weakness and potential increases to mortgage rates.
Friday morning gives us some factual monthly economic data for the markets to digest. Neither of the two reports are considered to be of high importance to the financial markets or mortgage rates, but do carry enough weight to cause some movement if their results vary greatly from forecasts. We will touch more on those in tomorrow’s commentary.
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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com
Thursday, July 2, 2009
Mortgage Rate Commentary
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Thursday’s bond market has opened in positive territory following a weak opening on stocks. The stock markets are posting sizable losses with the Dow down 174 points and the Nasdaq 43 points. The bond market is currently up 9/32, which, with yesterday's late strength, should improve this morning’s mortgage rates by approximately .375 of a discount point compared to yesterday’s morning rates.
This morning’s economic data gave us mixed results, beginning when the Labor Department reported that the U.S. unemployment rose 0.1% last month to stand at 9.5%. This was slightly lower than the 9.6% that many analysts and market traders had expected and can be considered negative for bonds because it fell short of forecasts. However, the other two headline numbers from this report gave us favorable results and are making the biggest impact on bond trading this morning. The report showed that 467,000 jobs were lost during the month, exceeding forecasts of approximately 365,000. In addition, the reading that gives average hourly earnings showed no change from May’s level. This means that earnings did not rise when they were expected to move higher 0.1%. While the earnings data may not be good for workers, it shows that wage inflation is little threat at this time.
May’s Factory Orders data was released late this morning by the Commerce Department. It showed that combined orders for durable and non-durable goods rose 1.2% last month. This was also stronger than analysts’ forecasts and hints that manufacturing activity was better than expected. Fortunately, this data is not one of the most important reports we see each month and has not derailed this morning’s momentum from the employment figures.
Overall, the Employment report was favorable for bonds with the larger than expected decline in jobs taking center stage. The unemployment rate was somewhat of a disappointment, but it was still an increase from May’s rate. The average hourly earnings reading is the least important of the three but still gave us favorable results. The Factory Orders report was not favorable to bonds or mortgage rates, but it also has nowhere near the level of importance as the monthly Employment report. Therefore, today’s data can be considered good news for bonds and mortgage rates.
The financial markets will be closed tomorrow in observance of the Independence Day holiday and will reopen Monday morning. There will not be an early close in the bond market today, but I suspect that trading will be thin during afternoon hours as market participants head home for the holiday weekend. This means we should see a fairly quiet afternoon in bonds and mortgage pricing as long as no unexpected news surprises the markets.
Next week is very light in terms of relevant economic data being posted. This could leave the bond market and mortgage rates to the mercy of outside influences. There will be no update to this report tomorrow, but look for details on next week’s events in Sunday’s weekly preview.
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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com
Thursday’s bond market has opened in positive territory following a weak opening on stocks. The stock markets are posting sizable losses with the Dow down 174 points and the Nasdaq 43 points. The bond market is currently up 9/32, which, with yesterday's late strength, should improve this morning’s mortgage rates by approximately .375 of a discount point compared to yesterday’s morning rates.
This morning’s economic data gave us mixed results, beginning when the Labor Department reported that the U.S. unemployment rose 0.1% last month to stand at 9.5%. This was slightly lower than the 9.6% that many analysts and market traders had expected and can be considered negative for bonds because it fell short of forecasts. However, the other two headline numbers from this report gave us favorable results and are making the biggest impact on bond trading this morning. The report showed that 467,000 jobs were lost during the month, exceeding forecasts of approximately 365,000. In addition, the reading that gives average hourly earnings showed no change from May’s level. This means that earnings did not rise when they were expected to move higher 0.1%. While the earnings data may not be good for workers, it shows that wage inflation is little threat at this time.
May’s Factory Orders data was released late this morning by the Commerce Department. It showed that combined orders for durable and non-durable goods rose 1.2% last month. This was also stronger than analysts’ forecasts and hints that manufacturing activity was better than expected. Fortunately, this data is not one of the most important reports we see each month and has not derailed this morning’s momentum from the employment figures.
Overall, the Employment report was favorable for bonds with the larger than expected decline in jobs taking center stage. The unemployment rate was somewhat of a disappointment, but it was still an increase from May’s rate. The average hourly earnings reading is the least important of the three but still gave us favorable results. The Factory Orders report was not favorable to bonds or mortgage rates, but it also has nowhere near the level of importance as the monthly Employment report. Therefore, today’s data can be considered good news for bonds and mortgage rates.
The financial markets will be closed tomorrow in observance of the Independence Day holiday and will reopen Monday morning. There will not be an early close in the bond market today, but I suspect that trading will be thin during afternoon hours as market participants head home for the holiday weekend. This means we should see a fairly quiet afternoon in bonds and mortgage pricing as long as no unexpected news surprises the markets.
Next week is very light in terms of relevant economic data being posted. This could leave the bond market and mortgage rates to the mercy of outside influences. There will be no update to this report tomorrow, but look for details on next week’s events in Sunday’s weekly preview.
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...
©Mortgage Commentary 2009
* Please note that this information reflects just one opinion on the current market. If you have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com
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