Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Friday’s bond market has opened in positive territory despite a stronger than expected reading in today’s Employment report. The stock markets are reacting favorable also with the Dow up 76 points and the Nasdaq up 6 points. The bond market is currently up 12/32, but we will still see an increase in this morning’s rates of approximately .125 of a discount point due to weakness in bonds late yesterday.
The Labor Department reported this morning that the U.S. unemployment rate rose to a 25-year high of 8.9% last month. They also reported that 539,000 jobs were lost during the month, falling short of the 600,000 jobs that latest forecasts had predicted. This was the fewest number of lost jobs since October, giving hope that the shedding may be slowing. The average hourly earnings reading rose 0.1%, when analysts were expecting a 0.2% increase. Overall, the report gave us mixed results on the status of the labor market, but bonds and stocks have reacted favorably to its results.
Next week is very busy with many relevant economic reports on the calendar. There is nothing of importance scheduled for release Monday or Tuesday, but the rest of the week brings us a couple of key inflation readings, an important measurement of consumer spending and a reading on industrial output.
I am expecting to see a fairly calm day Monday unless we get some relevant news over the weekend. But the middle and latter parts of the week will probably be extremely active with several key reports being posted over three trading days. Look for details on next week’s events in Sunday’s weekly preview, but expect to see some volatility late next week.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now.... ©Mortgage Commentary 2009
* Please note that 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.
Friday, May 8, 2009
Thursday, May 7, 2009
Mortgage Rate Advisory- 05/07/09
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Thursday’s bond market has opened in negative territory following the release of stronger than expected economic data and early stock gains. The stock markets are showing moderate strength during early trading with the Dow up 53 points and the Nasdaq up 10 points. The bond market is currently down 13/32, which will likely push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point compared to yesterday’s morning rates.
The Labor Department gave us both of this morning’s releases. The more important of the two was the 1st Quarter Productivity and Costs data that revealed a larger than expected 0.8% increase in worker output. The bad news came from the Unit Labor Costs reading that showed a 3.3% increase. That was higher than the 2.7% that was forecasted, meaning employer costs were higher than thought. Higher costs can translate to wage inflation concerns, therefore, this portion of the report is a negative for bonds.
The second bit of news was last week’s unemployment figures. It showed that 601,000 new claims for benefits were filed last week. This is a three month low and was well below forecasts of 635,000, but fortunately this data is not considered to be highly influential on mortgage rates. However, it does raise additional concern about tomorrow’s monthly report.
Yesterday’s 10-year Note sale was met with a decent demand from investors. That led to improvements in bonds during afternoon trading yesterday and some lenders to revise mortgage pricing lower. The Treasury will sell 30-year Bonds today, posting the results at 1:30 PM ET. Another round of strong bidding could cause bonds to get back some of this morning’s earlier losses. However, I suspect that most mortgage lenders will wait until tomorrow’s big news rather than revising their rates this afternoon.
Tomorrow morning brings us the release of the almighty Employment report, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be a larger than expected increase in the unemployment rate and more payrolls lost during the month than was expected.
It could turn out to be a wonderful day in the mortgage market tomrrow, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for an 8.9% unemployment rate and approximately 620,000 jobs lost during the month.
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 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.
Thursday’s bond market has opened in negative territory following the release of stronger than expected economic data and early stock gains. The stock markets are showing moderate strength during early trading with the Dow up 53 points and the Nasdaq up 10 points. The bond market is currently down 13/32, which will likely push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point compared to yesterday’s morning rates.
The Labor Department gave us both of this morning’s releases. The more important of the two was the 1st Quarter Productivity and Costs data that revealed a larger than expected 0.8% increase in worker output. The bad news came from the Unit Labor Costs reading that showed a 3.3% increase. That was higher than the 2.7% that was forecasted, meaning employer costs were higher than thought. Higher costs can translate to wage inflation concerns, therefore, this portion of the report is a negative for bonds.
The second bit of news was last week’s unemployment figures. It showed that 601,000 new claims for benefits were filed last week. This is a three month low and was well below forecasts of 635,000, but fortunately this data is not considered to be highly influential on mortgage rates. However, it does raise additional concern about tomorrow’s monthly report.
Yesterday’s 10-year Note sale was met with a decent demand from investors. That led to improvements in bonds during afternoon trading yesterday and some lenders to revise mortgage pricing lower. The Treasury will sell 30-year Bonds today, posting the results at 1:30 PM ET. Another round of strong bidding could cause bonds to get back some of this morning’s earlier losses. However, I suspect that most mortgage lenders will wait until tomorrow’s big news rather than revising their rates this afternoon.
Tomorrow morning brings us the release of the almighty Employment report, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be a larger than expected increase in the unemployment rate and more payrolls lost during the month than was expected.
It could turn out to be a wonderful day in the mortgage market tomrrow, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for an 8.9% unemployment rate and approximately 620,000 jobs lost during the month.
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 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.
Monday, May 4, 2009
Mortgage Rate Advisory- 05/04/2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Monday’s bond market has opened down slightly following early stock gains. The stock markets are starting the week in positive territory with the Dow up 93 points and the Nasdaq up 16 points. The bond market is currently down 4/32, but we will likely still see a slight improvement to mortgage rates due to strength in bonds late Friday.
There is no relevant economic news scheduled for release today. The week is very light in terms of the number of scheduled economic releases. However, we may still have an active week in the markets and mortgage rates due to the importance of the data that is being released and the other events on the calendar. There are only two reports scheduled that are worth watching, but one of them is highly important to bonds and mortgage rates.
The first event of the week will be testimony of Fed Chairman Bernanke as he speaks before a Joint Economic Committee late tomorrow morning. The topic will be the economy and the Fed’s outlook for future activity. Market participants will be watching his words closely, which means that we will likely see some volatility in trading as he speaks. He will begin at 10:00 AM ET, so look for fluctuations in the markets during late morning trading and potential revisions to rates early afternoon.
The Labor Department will release its 1st Quarter Productivity and Costs data early Thursday morning and April’s Employment figures Friday morning. Thursday’s report is fairly important, but Friday’s data is one of the most important reports we see each month.
In addition to this week’s economic data, we also have Treasury auctions that can influence bond trading and affect mortgage rates. The Treasury will hold a 10-year Note sale Wednesday and a 30-year Bond sale Thursday. Results of the auctions will be posted at 1:30 PM ET each day. If they were met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding could lead to higher mortgage pricing those afternoons.
Overall, I am expecting to see a fairly active week in mortgage rates. Expect to see movement in rates multiple days this week. Tomorrow’s speech and Friday’s Employment report will heavily influence trading, likely making them the most important days. However, Thursday’s data and Treasury auction may also lead to noticeable changes in rates. Accordingly, I would strongly recommend maintaining contact with your mortgage professional the next few days 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... 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 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.
Monday’s bond market has opened down slightly following early stock gains. The stock markets are starting the week in positive territory with the Dow up 93 points and the Nasdaq up 16 points. The bond market is currently down 4/32, but we will likely still see a slight improvement to mortgage rates due to strength in bonds late Friday.
There is no relevant economic news scheduled for release today. The week is very light in terms of the number of scheduled economic releases. However, we may still have an active week in the markets and mortgage rates due to the importance of the data that is being released and the other events on the calendar. There are only two reports scheduled that are worth watching, but one of them is highly important to bonds and mortgage rates.
The first event of the week will be testimony of Fed Chairman Bernanke as he speaks before a Joint Economic Committee late tomorrow morning. The topic will be the economy and the Fed’s outlook for future activity. Market participants will be watching his words closely, which means that we will likely see some volatility in trading as he speaks. He will begin at 10:00 AM ET, so look for fluctuations in the markets during late morning trading and potential revisions to rates early afternoon.
The Labor Department will release its 1st Quarter Productivity and Costs data early Thursday morning and April’s Employment figures Friday morning. Thursday’s report is fairly important, but Friday’s data is one of the most important reports we see each month.
In addition to this week’s economic data, we also have Treasury auctions that can influence bond trading and affect mortgage rates. The Treasury will hold a 10-year Note sale Wednesday and a 30-year Bond sale Thursday. Results of the auctions will be posted at 1:30 PM ET each day. If they were met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding could lead to higher mortgage pricing those afternoons.
Overall, I am expecting to see a fairly active week in mortgage rates. Expect to see movement in rates multiple days this week. Tomorrow’s speech and Friday’s Employment report will heavily influence trading, likely making them the most important days. However, Thursday’s data and Treasury auction may also lead to noticeable changes in rates. Accordingly, I would strongly recommend maintaining contact with your mortgage professional the next few days 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... 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 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.
Mortgage Rate Advisory- Week of 5/3/09
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
This week is very light in terms of the number of economic releases that are scheduled to be posted. However, we may still have an active week in the markets and mortgage rates due to the importance of the data that is being released and the other events on the calendar. There are only two reports scheduled that are worth watching, but one of them is highly important to bonds and mortgage rates.
The first event of the week will be testimony of Fed Chairman Bernanke as he speaks before a Joint Economic Committee Tuesday morning. The topic will be the economy and the Fed’s outlook for future activity. Market participants will be watching his words closely, which means that we will likely see some volatility in trading as he speaks. He will begin at 10:00 AM ET, so look for fluctuations in the markets during late morning trading and potential revisions to rates early afternoon.
The Labor Department will release its 1st Quarter Productivity and Costs data early Thursday morning. This information helps us measure employee productivity in the workplace. High levels of productivity help allow low-inflationary economic growth. If employee productivity is rising, the bond market should react favorably. However, a decrease could cause bond prices to drop and mortgage rates to rise Thursday morning. It is expected to show a 0.9% increase in productivity and a 2.5% increase in the labor costs reading.
Friday brings us the release of the almighty Employment report, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be a larger than expected increase in the unemployment rate and more payrolls lost during the month than was expected.
Just how much of an improvement or worsening in rates depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for an 8.9% unemployment rate and approximately 620,000 jobs lost during the month. In addition to this week’s economic data, we also have Treasury auctions that can influence bond trading and affect mortgage rates. The Treasury will hold a 10-year Note sale Wednesday and a 30-year Bond sale Thursday. Results of the auctions will be posted at 1:30 PM ET each day. If they were met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding could lead to higher mortgage pricing those afternoons.
Overall, I am expecting to see a fairly active week in mortgage rates. Tomorrow will probably be the lightest day with no relevant data or events scheduled, but expect to see movement in rates multiple days this week. Tuesday’s speech and Friday’s Employment report will heavily influence trading, likely making them the most important days. However, Thursday’s data and Treasury auction may also lead to noticeable changes in rates. Accordingly, I would strongly recommend maintaining contact with your mortgage professional the next few days 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... 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 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.
This week is very light in terms of the number of economic releases that are scheduled to be posted. However, we may still have an active week in the markets and mortgage rates due to the importance of the data that is being released and the other events on the calendar. There are only two reports scheduled that are worth watching, but one of them is highly important to bonds and mortgage rates.
The first event of the week will be testimony of Fed Chairman Bernanke as he speaks before a Joint Economic Committee Tuesday morning. The topic will be the economy and the Fed’s outlook for future activity. Market participants will be watching his words closely, which means that we will likely see some volatility in trading as he speaks. He will begin at 10:00 AM ET, so look for fluctuations in the markets during late morning trading and potential revisions to rates early afternoon.
The Labor Department will release its 1st Quarter Productivity and Costs data early Thursday morning. This information helps us measure employee productivity in the workplace. High levels of productivity help allow low-inflationary economic growth. If employee productivity is rising, the bond market should react favorably. However, a decrease could cause bond prices to drop and mortgage rates to rise Thursday morning. It is expected to show a 0.9% increase in productivity and a 2.5% increase in the labor costs reading.
Friday brings us the release of the almighty Employment report, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be a larger than expected increase in the unemployment rate and more payrolls lost during the month than was expected.
Just how much of an improvement or worsening in rates depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for an 8.9% unemployment rate and approximately 620,000 jobs lost during the month. In addition to this week’s economic data, we also have Treasury auctions that can influence bond trading and affect mortgage rates. The Treasury will hold a 10-year Note sale Wednesday and a 30-year Bond sale Thursday. Results of the auctions will be posted at 1:30 PM ET each day. If they were met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding could lead to higher mortgage pricing those afternoons.
Overall, I am expecting to see a fairly active week in mortgage rates. Tomorrow will probably be the lightest day with no relevant data or events scheduled, but expect to see movement in rates multiple days this week. Tuesday’s speech and Friday’s Employment report will heavily influence trading, likely making them the most important days. However, Thursday’s data and Treasury auction may also lead to noticeable changes in rates. Accordingly, I would strongly recommend maintaining contact with your mortgage professional the next few days 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... 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 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.
Thursday, April 30, 2009
Mortgage Rate Advisory- 04/29/09 PM
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
WEDNESDAY AFTERNOON UPDATE: This week’s FOMC meeting adjourned with no change to key short-term interest rates. The post meeting statement indicated that the economy was still weakening, but at a slower rate than their last update. They also said that inflation “remained subdued”, which is good news for bonds. There was little reference to the Fed’s next move regarding buying Treasury debt.
However, the slowing contraction in the economy led to stock gains that caused bonds to sell. The Dow ended the day higher 168 points while the Nasdaq closed up 38 points. The major stock indexes actually spiked higher before falling before closing. At one point the Dow was up 240 points while the Nasdaq reached a high of up 53 points. The bond market closed down 25/32, which could lead to upward revisions to mortgage rates. However, many lenders may opt to wait until tomorrow’s data is posted before reflecting that change.
This morning’s major economic news was the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. Today’s release revealed that activity fell at an annual rate of 6.1% during the first three months of the year. This was much weaker than the 4.7% decline that was expected and shows that the economy was slowing quicker than thought. This is good news for bonds and mortgage rates because slowing economic activity eases inflation concerns and makes bonds and mortgage related securities more attractive to investors.
Tomorrow brings us the release of two important reports in addition to weekly unemployment figures. The first is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we may see wage inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.5%.
March’s Personal Income & Outlays is the second of two reports due to be posted tomorrow morning. This data helps us measure consumers' ability to spend and current spending habits, which is important to the mortgage market due to the influence that consumer spending related information has on the financial markets. If a consumer's income is rising, they are more likely to make additional purchases. This raises the likelihood of increased economic activity and has a negative impact on the bond market and mortgage rates. Current forecasts are calling for a 0.2% decline in income and a 0.1% drop in spending. The lower the reading, the better the news for bonds for both portions of the report.
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 if you have a mortgage interest 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.
WEDNESDAY AFTERNOON UPDATE: This week’s FOMC meeting adjourned with no change to key short-term interest rates. The post meeting statement indicated that the economy was still weakening, but at a slower rate than their last update. They also said that inflation “remained subdued”, which is good news for bonds. There was little reference to the Fed’s next move regarding buying Treasury debt.
However, the slowing contraction in the economy led to stock gains that caused bonds to sell. The Dow ended the day higher 168 points while the Nasdaq closed up 38 points. The major stock indexes actually spiked higher before falling before closing. At one point the Dow was up 240 points while the Nasdaq reached a high of up 53 points. The bond market closed down 25/32, which could lead to upward revisions to mortgage rates. However, many lenders may opt to wait until tomorrow’s data is posted before reflecting that change.
This morning’s major economic news was the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. Today’s release revealed that activity fell at an annual rate of 6.1% during the first three months of the year. This was much weaker than the 4.7% decline that was expected and shows that the economy was slowing quicker than thought. This is good news for bonds and mortgage rates because slowing economic activity eases inflation concerns and makes bonds and mortgage related securities more attractive to investors.
Tomorrow brings us the release of two important reports in addition to weekly unemployment figures. The first is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we may see wage inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.5%.
March’s Personal Income & Outlays is the second of two reports due to be posted tomorrow morning. This data helps us measure consumers' ability to spend and current spending habits, which is important to the mortgage market due to the influence that consumer spending related information has on the financial markets. If a consumer's income is rising, they are more likely to make additional purchases. This raises the likelihood of increased economic activity and has a negative impact on the bond market and mortgage rates. Current forecasts are calling for a 0.2% decline in income and a 0.1% drop in spending. The lower the reading, the better the news for bonds for both portions of the report.
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 if you have a mortgage interest 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.
Tuesday, April 28, 2009
Mortgage Rate Advisory- 04/28/09
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Tuesday’s bond market has opened in negative territory after this morning’s only relevant economic data revealed a much stronger than expected reading. The stock markets are showing modest gains with the Dow up 21 points and the Nasdaq up 5 points. The bond market is currently down 5/32, but we still should see an improvement in this morning’s mortgage rates of approximately .125 of a discount point due to strength in bonds late yesterday.
The Conference Board reported late this morning that their Consumer Confidence Index (CCI) for April jumped to 39.2. This is a six-month high for the index and a much stronger reading than the 28.8 that was expected. That indicates that consumers were much more optimistic about their own personal financial situations than many had thought. The negative impact on bonds comes from the belief that higher levels of confidence makes it much more likely that consumers will make larger purchases in the near future. And since consumer spending makes up two-thirds of the U.S. economy, any related data is considered important and can influence bond trading.
Tomorrow is going to be a pretty interesting day. We have the possibility of seeing plenty of volatility in the markets and therefore, mortgage rates also. The first event is the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets tomorrow morning. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates tomorrow morning.
This week’s FOMC meeting begins today and will adjourn tomorrow afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement.
With the preliminary version of the GDP being released during morning trading and the FOMC meeting adjourning during afternoon hours, there is a decent possibility of the markets changing directions more than once tomorrow. Accordingly, I strongly recommend maintaining contact with your mortgage professional 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...
* Please note that if you have a mortgage interest 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.
Tuesday’s bond market has opened in negative territory after this morning’s only relevant economic data revealed a much stronger than expected reading. The stock markets are showing modest gains with the Dow up 21 points and the Nasdaq up 5 points. The bond market is currently down 5/32, but we still should see an improvement in this morning’s mortgage rates of approximately .125 of a discount point due to strength in bonds late yesterday.
The Conference Board reported late this morning that their Consumer Confidence Index (CCI) for April jumped to 39.2. This is a six-month high for the index and a much stronger reading than the 28.8 that was expected. That indicates that consumers were much more optimistic about their own personal financial situations than many had thought. The negative impact on bonds comes from the belief that higher levels of confidence makes it much more likely that consumers will make larger purchases in the near future. And since consumer spending makes up two-thirds of the U.S. economy, any related data is considered important and can influence bond trading.
Tomorrow is going to be a pretty interesting day. We have the possibility of seeing plenty of volatility in the markets and therefore, mortgage rates also. The first event is the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets tomorrow morning. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates tomorrow morning.
This week’s FOMC meeting begins today and will adjourn tomorrow afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement.
With the preliminary version of the GDP being released during morning trading and the FOMC meeting adjourning during afternoon hours, there is a decent possibility of the markets changing directions more than once tomorrow. Accordingly, I strongly recommend maintaining contact with your mortgage professional 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...
* Please note that if you have a mortgage interest 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.
Monday, April 27, 2009
Mortgage Rate Advisory- 04/27/09
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Monday’s bond market has opened in positive territory following early stock weakness. The Dow is currently down 64 points while the Nasdaq has lost 15 points. The bond market is currently up 12/32, but I am not expecting to see much a change in this morning’s mortgage rates.
The first of this week’s seven relevant economic reports comes late tomorrow morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation concerns to a minimum. But, a sizable increase could hurt the bond market, pushing mortgage rates higher tomorrow. It is expected to show a reading of 28.8, which would be an increase from March’s 26.0 reading.
Wednesday brings us the release of a very important report along with the FOMC meeting results. The report is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets Wednesday and therefore the mortgage market also. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates Wednesday morning.
This week’s FOMC meeting will begin on Tuesday but will not adjourn until Wednesday afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement.
Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday will likely be the most important day of the week with the GDP being posted along with the FOMC adjournment, but we may see noticeable changes to rates tomorrow and Friday also. If this week’s reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.
If I were considering financing/refinancing a home, I would.... 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 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.
Monday’s bond market has opened in positive territory following early stock weakness. The Dow is currently down 64 points while the Nasdaq has lost 15 points. The bond market is currently up 12/32, but I am not expecting to see much a change in this morning’s mortgage rates.
The first of this week’s seven relevant economic reports comes late tomorrow morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation concerns to a minimum. But, a sizable increase could hurt the bond market, pushing mortgage rates higher tomorrow. It is expected to show a reading of 28.8, which would be an increase from March’s 26.0 reading.
Wednesday brings us the release of a very important report along with the FOMC meeting results. The report is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets Wednesday and therefore the mortgage market also. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates Wednesday morning.
This week’s FOMC meeting will begin on Tuesday but will not adjourn until Wednesday afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement.
Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday will likely be the most important day of the week with the GDP being posted along with the FOMC adjournment, but we may see noticeable changes to rates tomorrow and Friday also. If this week’s reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.
If I were considering financing/refinancing a home, I would.... 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 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.
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