Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Friday's bond market opened in well in negative territory as the selling continues into the long weekend. The stock markets are in positive territory with the Dow up 67 points and the Nasdaq up 7 points. The bond market is currently down 16/32, which will likely push this morning’s mortgage rates higher by approximately .125 to .250 of a discount point.
There is no relevant data scheduled for release today. The negative tone in bonds is a carryover from yesterday’s announcement of $100 billion in new debt being sold by the Fed. This was more than expected and led to selling of current securities. The result was a significant loss to bonds during afternoon trading.
The bond market will close at 2:00 PM ET ahead of the Memorial Day Holiday Monday. All the financial markets will be closed Monday and will reopen Tuesday morning. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early, but after this morning’s losses I don’t think we will see enough of a change to push mortgage rates any higher today.
Next week is fairly busy with economic reports scheduled for release every trading day. Some of the reports are fairly important, but none are considered extremely important. Look for more 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 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 22, 2009
Thursday, May 21, 2009
Mortgage Rate Commentary- 05/21/2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Thursday's bond market opened in positive territory but has since fallen well into negative ground. The stock markets are showing sizable losses with the Dow down 120 points and the Nasdaq down 34 points. The bond market is now down 26/32, but we will still see a slight improvement to this morning’s mortgage rates as a result of gains late yesterday. However, I would not be surprised to see upward rate revisions if bonds continue to remain weak today.
The Labor Department reported this morning that 631,000 new claims for unemployment benefits were filed last week. This was a little higher than expected, but not nearly enough of a difference to influence this morning's mortgage rates.
April's Leading Economic Indicators (LEI) was released late this morning, revealing an increase of 1.0%. This was a larger increase than was expected and indicates that the economy may grow at a decent pace of the next three to six months. But, this is only one indicator and does not mean that the economy is going to rebound quickly. Still, the news is considered negative for bonds and mortgage rates.
The turnaround in bonds came after the Fed said that $100 billion in new debt will be sold in the immediate future. This was more than expected and makes current Treasury securities less appealing to investors. That has led to selling during late morning trading as traders prepare for those sales.
There is no relevant data scheduled for release tomorrow, but the bond market will close at 2:00 PM ET ahead of the Memorial Day Holiday Monday. All the financial markets will be closed Monday and will reopen Tuesday morning. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early.
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 opened in positive territory but has since fallen well into negative ground. The stock markets are showing sizable losses with the Dow down 120 points and the Nasdaq down 34 points. The bond market is now down 26/32, but we will still see a slight improvement to this morning’s mortgage rates as a result of gains late yesterday. However, I would not be surprised to see upward rate revisions if bonds continue to remain weak today.
The Labor Department reported this morning that 631,000 new claims for unemployment benefits were filed last week. This was a little higher than expected, but not nearly enough of a difference to influence this morning's mortgage rates.
April's Leading Economic Indicators (LEI) was released late this morning, revealing an increase of 1.0%. This was a larger increase than was expected and indicates that the economy may grow at a decent pace of the next three to six months. But, this is only one indicator and does not mean that the economy is going to rebound quickly. Still, the news is considered negative for bonds and mortgage rates.
The turnaround in bonds came after the Fed said that $100 billion in new debt will be sold in the immediate future. This was more than expected and makes current Treasury securities less appealing to investors. That has led to selling during late morning trading as traders prepare for those sales.
There is no relevant data scheduled for release tomorrow, but the bond market will close at 2:00 PM ET ahead of the Memorial Day Holiday Monday. All the financial markets will be closed Monday and will reopen Tuesday morning. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early.
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.
Wednesday, May 20, 2009
Mortgage Market Commentary-05/20/2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
WEDNESDAY AFTERNOON UPDATE: The bond market has improved noticeably during afternoon trading after traders were able to digest the minutes from the last FOMC meeting. Those minutes revealed that the Fed has revised their economic outlook lower from previous estimates. They indicated that the U.S. unemployment rate is likely reach somewhere between 9.2% and 9.6% this year. They had previously predicted an 8.5% to 8.8% range, meaning the labor market is worse off than previously thought.
They also said that the Gross Domestic Product (GDP), which is the total of all goods and services produced on the U.S. and the best measurement of economic activity, will likely fall 1.3% - 2.0% this year. They had said previously that a drop between 0.5% and 1.3% was likely. This means that overall economic activity will likely be lower this year than their previous forecasts had called for.
Both of these revisions are good news for bonds. A weak labor market usually coincides with a weak economy. During a soft economic environment, bonds and mortgage related securities become more appealing to investors. This usually drives bond prices higher and mortgage rates lower.
The impact this news had on today’s markets was favorable to mortgage borrowers. The stock markets fell with the Dow closing down almost 53 points and the Nasdaq down almost 7 points, while the bond market rallied to close up 16/32. The result should be an improvement in this afternoon’s mortgage rates of approximately .125 - .250 of a discount point. Some lenders may opt to wait until tomorrow morning to reflect those improvements, but many will likely revise lower today.
The Labor Department will post weekly unemployment figures early tomorrow morning. They are expected to say that 640,000 new claims for benefits were filed. This data is not considered to be important, so unless it varies greatly from analysts’ forecasts, it likely will not influence mortgage rates.
The last data of the week comes late tomorrow morning with the release of April’s Leading Economic Indicators (LEI) at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a fairly large increase of 0.6% from March’s reading, meaning that economic activity is likely to gain momentum during the next few months. A decline would be good news for the bond market and mortgage rates, while a larger increase could cause mortgage rates to inch higher tomorrow.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...
©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.
WEDNESDAY AFTERNOON UPDATE: The bond market has improved noticeably during afternoon trading after traders were able to digest the minutes from the last FOMC meeting. Those minutes revealed that the Fed has revised their economic outlook lower from previous estimates. They indicated that the U.S. unemployment rate is likely reach somewhere between 9.2% and 9.6% this year. They had previously predicted an 8.5% to 8.8% range, meaning the labor market is worse off than previously thought.
They also said that the Gross Domestic Product (GDP), which is the total of all goods and services produced on the U.S. and the best measurement of economic activity, will likely fall 1.3% - 2.0% this year. They had said previously that a drop between 0.5% and 1.3% was likely. This means that overall economic activity will likely be lower this year than their previous forecasts had called for.
Both of these revisions are good news for bonds. A weak labor market usually coincides with a weak economy. During a soft economic environment, bonds and mortgage related securities become more appealing to investors. This usually drives bond prices higher and mortgage rates lower.
The impact this news had on today’s markets was favorable to mortgage borrowers. The stock markets fell with the Dow closing down almost 53 points and the Nasdaq down almost 7 points, while the bond market rallied to close up 16/32. The result should be an improvement in this afternoon’s mortgage rates of approximately .125 - .250 of a discount point. Some lenders may opt to wait until tomorrow morning to reflect those improvements, but many will likely revise lower today.
The Labor Department will post weekly unemployment figures early tomorrow morning. They are expected to say that 640,000 new claims for benefits were filed. This data is not considered to be important, so unless it varies greatly from analysts’ forecasts, it likely will not influence mortgage rates.
The last data of the week comes late tomorrow morning with the release of April’s Leading Economic Indicators (LEI) at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a fairly large increase of 0.6% from March’s reading, meaning that economic activity is likely to gain momentum during the next few months. A decline would be good news for the bond market and mortgage rates, while a larger increase could cause mortgage rates to inch higher tomorrow.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...
©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.
Why Mortgage Refinancing is Important
Why Mortgage Refinancing is Important?
Mortgage refinancing is a process when you request for a secured loan for the purpose of repaying another loan backed by the same properties or assets. In case the original loan is a fixed rate mortgage (FRM) loan, then you would wish to obtain a new loan under improved terms and interest rate when fixed rates go up.
When Mortgage Refinancing Is An Option
Usually, people go for refinancing when you bear a mortgage on your home and you are asking for a second loan for repaying the first one. When you are making the decision to opt for home refinancing, it is essential to decide initially whether the amount saved by you on interests is equal or more than the amount of fees that you have to pay at the time of refinancing.
Advantages of Mortgage Refinancing
Think about a situation where you have accessibility to additional cash and at the same time, are reducing your monthly mortgage payment. This is truly a significant advantage of refinancing.
A home is the most important asset in your life that you might ever possess. Similarly, your mortgage payment might be the biggest expenditure for your monthly budget. Therefore, it is always beneficial to utilize this property for lowering your monthly payment and save additional funds. At the time of refinancing your mortgage, your home equity comes into play in this fashion. When you refinance, buying PMI (Private Mortgage Insurance) is no more necessary.
Reduced Refinance Rate and Reduced Payments
When you buy your home, the interest rate of your mortgage loan is determined by a number of factors. Particular elements such as the amount of down payment and your credit rating are important determinants of your interest rate. Nevertheless, interest rates vary. At the time when the Federal Reserve gets into a rate-cutting phase, the existing rates might get considerably less than when your home was originally purchased.
If you refinance your mortgage when interest rates are less, you can swap a higher interest with a lesser one which successively would reduce your monthly payment.
One more benefit of mortgage refinancing is that you can cut down the tenure of your mortgage and save a substantial amount of interest. You can also switch your adjustable rate mortgage to a fixed rate mortgage when adjustable rates are high.
Author's Bio : Nicole Richardson is an experienced financial writer associated with MortgageFit Community. She has been guiding the Community through her writings and suggestions in the Community forums. http://www.mortgagefit.com/refinance.html
* 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. Jeff Drew, Star Mortgage.
Mortgage refinancing is a process when you request for a secured loan for the purpose of repaying another loan backed by the same properties or assets. In case the original loan is a fixed rate mortgage (FRM) loan, then you would wish to obtain a new loan under improved terms and interest rate when fixed rates go up.
When Mortgage Refinancing Is An Option
Usually, people go for refinancing when you bear a mortgage on your home and you are asking for a second loan for repaying the first one. When you are making the decision to opt for home refinancing, it is essential to decide initially whether the amount saved by you on interests is equal or more than the amount of fees that you have to pay at the time of refinancing.
Advantages of Mortgage Refinancing
Think about a situation where you have accessibility to additional cash and at the same time, are reducing your monthly mortgage payment. This is truly a significant advantage of refinancing.
A home is the most important asset in your life that you might ever possess. Similarly, your mortgage payment might be the biggest expenditure for your monthly budget. Therefore, it is always beneficial to utilize this property for lowering your monthly payment and save additional funds. At the time of refinancing your mortgage, your home equity comes into play in this fashion. When you refinance, buying PMI (Private Mortgage Insurance) is no more necessary.
Reduced Refinance Rate and Reduced Payments
When you buy your home, the interest rate of your mortgage loan is determined by a number of factors. Particular elements such as the amount of down payment and your credit rating are important determinants of your interest rate. Nevertheless, interest rates vary. At the time when the Federal Reserve gets into a rate-cutting phase, the existing rates might get considerably less than when your home was originally purchased.
If you refinance your mortgage when interest rates are less, you can swap a higher interest with a lesser one which successively would reduce your monthly payment.
One more benefit of mortgage refinancing is that you can cut down the tenure of your mortgage and save a substantial amount of interest. You can also switch your adjustable rate mortgage to a fixed rate mortgage when adjustable rates are high.
Author's Bio : Nicole Richardson is an experienced financial writer associated with MortgageFit Community. She has been guiding the Community through her writings and suggestions in the Community forums. http://www.mortgagefit.com/refinance.html
* 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. Jeff Drew, Star Mortgage.
Wednesday, May 13, 2009
Mortgage Rate Commentary 05/13/2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Wednesday’s bond market has opened in positive territory following a much weaker than expected Retail Sales report. The stock markets are showing sizable losses with the Dow down 159 points and the Nasdaq down 26 points. The bond market is currently up 14/32, which will likely improve this morning’s mortgage rates by approximately .125 - .250 of a discount point.
The Commerce Department reported this morning that sales at retail establishments fell 0.4% last month. This was much lower than the 0.1% decline that was expected and indicates that consumer spending is softening. Since consumer spending makes up two-thirds of the U.S. economy, today’s report hints that an economy recovery may not be as soon as some analysts had thought. That is good news for bonds and mortgage rates because slowing economic activity makes bonds and mortgage related securities more attractive to investors.
Tomorrow morning also brings us an important economic report with the release of April’s Producer Price Index (PPI). This index helps us measure inflationary pressures at the producer level of the economy. If it reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.
Also tomorrow will be the release of last week’s unemployment figures by the Labor Department. Last Thursday’s posting showed a sizable drop in new claims for unemployment benefits. Tomorrow’s release is expected to reveal 609,000 new claims were filed, which would be an increase of 8,000. However, this data is not nearly important as the PPI is and will likely not influence bond trading and mortgage rates unless it varies greatly from forecasts.
Friday brings us the release of three relevant reports, including the very important Consumer Price Index (CPI). The other two are moderately important to the markets, but the group of three combined can create a large amount of volatility in the markets if they reveal surprising results. But the CPI will be the primary report of the day.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...
©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.
Wednesday’s bond market has opened in positive territory following a much weaker than expected Retail Sales report. The stock markets are showing sizable losses with the Dow down 159 points and the Nasdaq down 26 points. The bond market is currently up 14/32, which will likely improve this morning’s mortgage rates by approximately .125 - .250 of a discount point.
The Commerce Department reported this morning that sales at retail establishments fell 0.4% last month. This was much lower than the 0.1% decline that was expected and indicates that consumer spending is softening. Since consumer spending makes up two-thirds of the U.S. economy, today’s report hints that an economy recovery may not be as soon as some analysts had thought. That is good news for bonds and mortgage rates because slowing economic activity makes bonds and mortgage related securities more attractive to investors.
Tomorrow morning also brings us an important economic report with the release of April’s Producer Price Index (PPI). This index helps us measure inflationary pressures at the producer level of the economy. If it reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.
Also tomorrow will be the release of last week’s unemployment figures by the Labor Department. Last Thursday’s posting showed a sizable drop in new claims for unemployment benefits. Tomorrow’s release is expected to reveal 609,000 new claims were filed, which would be an increase of 8,000. However, this data is not nearly important as the PPI is and will likely not influence bond trading and mortgage rates unless it varies greatly from forecasts.
Friday brings us the release of three relevant reports, including the very important Consumer Price Index (CPI). The other two are moderately important to the markets, but the group of three combined can create a large amount of volatility in the markets if they reveal surprising results. But the CPI will be the primary report of the day.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...
©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.
Tuesday, May 12, 2009
Mortgage Rate Advisory 05/12/2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Tuesday’s bond market has opened down slightly with no important economic news scheduled for release today. The stock markets are showing minor losses with the Dow down 6 points and the Nasdaq down 17 points. The bond market is currently down 4/32, but we will still likely see an improvement in this morning’s mortgage rates of approximately .125 - .250 of a discount point due to strength late yesterday.
March’s Goods and Services Trade Balance report was posted this morning, revealing a trade deficit of $27.6 billion. This figure was below forecasts, but since this data is not considered to be highly important, its impact on this morning’s trading has been minimal.
The first important piece of data comes tomorrow morning when April’s Retail Sales report will be released. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for a 0.1% decline in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower tomorrow. However, a larger increase could fuel bond selling and lead to higher mortgage rates.
Thursday brings us another important report with the release of April’s Producer Price Index (PPI). This index helps us measure inflationary pressures at the producer level of the economy. If it reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.
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.
Tuesday’s bond market has opened down slightly with no important economic news scheduled for release today. The stock markets are showing minor losses with the Dow down 6 points and the Nasdaq down 17 points. The bond market is currently down 4/32, but we will still likely see an improvement in this morning’s mortgage rates of approximately .125 - .250 of a discount point due to strength late yesterday.
March’s Goods and Services Trade Balance report was posted this morning, revealing a trade deficit of $27.6 billion. This figure was below forecasts, but since this data is not considered to be highly important, its impact on this morning’s trading has been minimal.
The first important piece of data comes tomorrow morning when April’s Retail Sales report will be released. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for a 0.1% decline in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower tomorrow. However, a larger increase could fuel bond selling and lead to higher mortgage rates.
Thursday brings us another important report with the release of April’s Producer Price Index (PPI). This index helps us measure inflationary pressures at the producer level of the economy. If it reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.
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, May 11, 2009
This weeks Mortgage Market
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
There are several important pieces of economic news scheduled for release this week, but three stand out above the others. There are a total of six reports scheduled, so it can be considered a fairly active week. There is no relevant data due out tomorrow, so expect the stock markets to help drive bond trading and mortgage rates.
March’s Goods and Services Trade Balance report will be released early Tuesday morning. This report gives us the size of the U.S. trade deficit but likely will not have much of an impact on the bond market or mortgage pricing. It is the least important of this week’s data.
The first important piece of data is the release of April’s Retail Sales early Wednesday morning. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for a 0.1% decline in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower Wednesday. However, a larger increase could fuel bond selling and lead to higher mortgage rates.
The second important report of the week is April’s Producer Price Index (PPI) early Thursday morning, which helps us measure inflationary pressures at the producer level of the economy. If this report reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers. There are three relevant reports scheduled to be posted Friday. The first is the week’s most important. April’s Consumer Price Index (CPI) will be posted at 8:30 AM. It is similar to Thursday’s PPI report, but measures inflationary pressures at the more important consumer level of the economy. Its results will be watched closely and can lead to significant volatility in the bond market and mortgage pricing. Current forecasts are calling for no change in the overall index and a 0.1% increase in the core data reading. The core data is the more important of the two since it excludes more volatile food and energy prices.
April’s Industrial Production is Friday’s second relevant report. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.6% decline in production, indicating that manufacturing activity is slowing rapidly. A larger decline in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is weaker than expected. The last report of the week is May's preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. It is expected to show a reading of 65.0, which would be little change from last month’s final reading. If it shows a decline in consumer confidence, bond prices will likely rise, assuming the CPI does not give us a significant surprise.
Overall, it likely will be a pretty active week for mortgage rates. Besides the week’s important economic news, look for the stock markets to be a major influence on trading. The most important day of the week is Friday with three reports on the agenda, including the CPI. But Wednesday is important due to the Retail Sales report. I am expecting to see several noticeable changes to rates this week, and would not be surprised to see multiple intra-day revisions also. Accordingly, please be attentive to the markets 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... 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.
There are several important pieces of economic news scheduled for release this week, but three stand out above the others. There are a total of six reports scheduled, so it can be considered a fairly active week. There is no relevant data due out tomorrow, so expect the stock markets to help drive bond trading and mortgage rates.
March’s Goods and Services Trade Balance report will be released early Tuesday morning. This report gives us the size of the U.S. trade deficit but likely will not have much of an impact on the bond market or mortgage pricing. It is the least important of this week’s data.
The first important piece of data is the release of April’s Retail Sales early Wednesday morning. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for a 0.1% decline in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower Wednesday. However, a larger increase could fuel bond selling and lead to higher mortgage rates.
The second important report of the week is April’s Producer Price Index (PPI) early Thursday morning, which helps us measure inflationary pressures at the producer level of the economy. If this report reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers. There are three relevant reports scheduled to be posted Friday. The first is the week’s most important. April’s Consumer Price Index (CPI) will be posted at 8:30 AM. It is similar to Thursday’s PPI report, but measures inflationary pressures at the more important consumer level of the economy. Its results will be watched closely and can lead to significant volatility in the bond market and mortgage pricing. Current forecasts are calling for no change in the overall index and a 0.1% increase in the core data reading. The core data is the more important of the two since it excludes more volatile food and energy prices.
April’s Industrial Production is Friday’s second relevant report. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.6% decline in production, indicating that manufacturing activity is slowing rapidly. A larger decline in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is weaker than expected. The last report of the week is May's preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. It is expected to show a reading of 65.0, which would be little change from last month’s final reading. If it shows a decline in consumer confidence, bond prices will likely rise, assuming the CPI does not give us a significant surprise.
Overall, it likely will be a pretty active week for mortgage rates. Besides the week’s important economic news, look for the stock markets to be a major influence on trading. The most important day of the week is Friday with three reports on the agenda, including the CPI. But Wednesday is important due to the Retail Sales report. I am expecting to see several noticeable changes to rates this week, and would not be surprised to see multiple intra-day revisions also. Accordingly, please be attentive to the markets 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... 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.
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