Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Tuesday’s bond market opened relatively flat but has since fallen into negative territory following an uneventful open in stocks and no major surprises in this morning’s economic data. The stock markets are showing modest gains with both the Dow and Nasdaq up a couple of points. The bond market is nearly currently down 10/32 from yesterday’s close, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.
This morning’s only relevant economic data was June’s Personal Income and Outlays data. It showed a 1.3% drop in income and a 0.4% rise in spending last month. The income reading was weaker than expected, but a sizable decline was forecasted anyhow. The spending reading exceeded the 0.3% increase that was expected, meaning consumers spent a little more last month than thought. The drop in income can be considered positive for bonds, but the higher than expected spending figure offsets the positive news in the income reading. In other words, this morning’s data had little influence on this morning’s mortgage rates.
Tomorrow morning brings us the release of June’s Factory Orders data. This report helps us measure manufacturing sector strength by tracking orders for both durable and non-durable goods during the month of June. It is similar to last week’s Durable Goods Orders report that tracks only orders for big-ticket items. Since a significant portion of the data was released last week, this report may not have as big of an impact on the markets as you may think. Analysts are expecting to see an increase of approximately 0.5% in new orders. A smaller than expected increase would be considered good news for bonds and mortgage pricing.
There is no relevant monthly or quarterly economic news scheduled for release Thursday, but Friday’s data is a different story. That is when we will see the almighty monthly Employment report. It has the potential to erase a week’s worth of gains or recover a week’s worth of losses in mortgage rates. With no data scheduled for release Thursday, I would not be surprised to see pressure in bonds as investors prepare for that release.
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
Tuesday, August 4, 2009
Monday, August 3, 2009
Mortgage Rate Advisory 08/03/2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
Monday’s bond market has opened down sharply following early stock gains and a stronger than expected economic release. The stock markets are starting the week in positive territory with the Dow up 109 points and the Nasdaq up 20 points. The bond market is currently down 38/32, which should push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point compared to Friday’s morning rates. Preventing a much larger increase in this morning’s rates was strength in bonds late Friday, meaning this morning’s losses more or less erase Friday’s late gains. However, if bond prices continue to fall, we can expect to see further increases to mortgage rates later today.
Today’s only relevant economic data came from the Institute for Supply Management (ISM) who reported that their manufacturing index for July rose to 48.9. This was an increase from June’s 44.8 and higher than the 46.5 that was expected. A reading below 50 means that more surveyed executives said business worsened than those who said it had improved. But fewer felt conditions had worsened than last month and than was expected this month. Therefore, today’s report was bad news for bonds and mortgage rates because manufacturer sentiment was stronger than expected, indicating stabilization in the manufacturing sector. A strengthening manufacturing sector would be key to the overall economic recovery that bond traders fear.
Tomorrow morning gives us the release of June’s Personal Income and Outlays data. This report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for a decline of 1.0% in income and an increase of 0.3% in spending. The sizable decline in June’s income that is expected is simply a result of the unusual spike in May’s income and not a sign of declining wages.
Overall, I am expecting to see another active week for mortgage rates. The most important day is Friday due to the data being released, but today’s movement in bonds showed that this morning’s data was extremely relevant to the markets also. The rest of the week is likely to be a little calmer than today and what could take place Friday. But day-to-day movement in rates should be expected every day this week. Accordingly, this is a good week to maintain contact with your mortgage professional.
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
Monday’s bond market has opened down sharply following early stock gains and a stronger than expected economic release. The stock markets are starting the week in positive territory with the Dow up 109 points and the Nasdaq up 20 points. The bond market is currently down 38/32, which should push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point compared to Friday’s morning rates. Preventing a much larger increase in this morning’s rates was strength in bonds late Friday, meaning this morning’s losses more or less erase Friday’s late gains. However, if bond prices continue to fall, we can expect to see further increases to mortgage rates later today.
Today’s only relevant economic data came from the Institute for Supply Management (ISM) who reported that their manufacturing index for July rose to 48.9. This was an increase from June’s 44.8 and higher than the 46.5 that was expected. A reading below 50 means that more surveyed executives said business worsened than those who said it had improved. But fewer felt conditions had worsened than last month and than was expected this month. Therefore, today’s report was bad news for bonds and mortgage rates because manufacturer sentiment was stronger than expected, indicating stabilization in the manufacturing sector. A strengthening manufacturing sector would be key to the overall economic recovery that bond traders fear.
Tomorrow morning gives us the release of June’s Personal Income and Outlays data. This report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for a decline of 1.0% in income and an increase of 0.3% in spending. The sizable decline in June’s income that is expected is simply a result of the unusual spike in May’s income and not a sign of declining wages.
Overall, I am expecting to see another active week for mortgage rates. The most important day is Friday due to the data being released, but today’s movement in bonds showed that this morning’s data was extremely relevant to the markets also. The rest of the week is likely to be a little calmer than today and what could take place Friday. But day-to-day movement in rates should be expected every day this week. Accordingly, this is a good week to maintain contact with your mortgage professional.
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
The week ahead in the mortgage market week of 08.02.2009
Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!
There are four relevant reports scheduled for release this week that are likely to affect mortgage pricing. The first important release scheduled for the week is the Institute for Supply Management’s (ISM) manufacturing index for July late tomorrow morning. This index measures manufacturer sentiment by surveying trade executives about business conditions during the month and is considered to be of fairly high importance to the markets. A reading below 50.0 means that more surveyed executives felt that business worsened last month than those who said it had improved. Tomorrow’s release is expected to show a reading of 46.5, up from last month’s 44.8, indicating manufacturer sentiment improved from June. A smaller than expected reading would be good news for the bond market and would likely improve mortgage rates tomorrow. However, a stronger than expected reading could lead to higher mortgage rates.
To read the rest of the story click here: Massachusetts Mortgage
There are four relevant reports scheduled for release this week that are likely to affect mortgage pricing. The first important release scheduled for the week is the Institute for Supply Management’s (ISM) manufacturing index for July late tomorrow morning. This index measures manufacturer sentiment by surveying trade executives about business conditions during the month and is considered to be of fairly high importance to the markets. A reading below 50.0 means that more surveyed executives felt that business worsened last month than those who said it had improved. Tomorrow’s release is expected to show a reading of 46.5, up from last month’s 44.8, indicating manufacturer sentiment improved from June. A smaller than expected reading would be good news for the bond market and would likely improve mortgage rates tomorrow. However, a stronger than expected reading could lead to higher mortgage rates.
To read the rest of the story click here: Massachusetts Mortgage
Friday, July 31, 2009
$8000 Tax Credit ENDS SOON!
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).
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).
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
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