Mortgage Market Update/Purchase and Refinance Mortgage info

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Tuesday?s bond market has opened in positive territory despite mostly unfavorable economic news. A weak open in stocks is helping to boost bond prices as the holiday-shortened week kicks off. The Dow is down 149 points while the Nasdaq has lost 48 points. The bond market is currently up 8/32 (2.18%), but due to weakness Friday before closing for the long weekend we likely will see little change in this morning?s mortgage rates.

There were three pieces of economic data released this morning, beginning with April's Durable Goods Orders at 8:30 AM. The Commerce Department announced that new orders for big-ticket products fell 0.5% last month, nearly matching forecasts of a 0.6% decline. If transportation-related orders such as airplanes are excluded, new orders rose 0.5% when analysts were expecting 0.4%. Both variances are extremely minor in this traditionally volatile data, so its impact on today?s bond trading and mortgage pricing has been fairly minimal.

May?s Consumer Confidence Index (CCI) was released at 10:00 AM this morning, revealing a reading of 95.4 that was higher than analysts? forecasts of 94.0. This means that surveyed consumers were a little more confident about their own financial and employment situations than expected. Because rising confidence usually means consumers are more apt to make a large purchase in the near future, fueling economic growth, we should consider this news negative for mortgage rates.

April's New Home Sales report was today?s last piece of relevant data. This Commerce Department report showed sales of newly constructed homes rose 6.8% last month. That was a larger increase than forecasts were calling for, indicating strength in the new home portion of the housing sector. Accordingly, that makes the data negative for bonds and mortgage rates. However, this report is not considered to be highly important to the financial and mortgage markets.

Tomorrow has nothing scheduled for release that is expected to affect mortgage rates but we do have the first of this week's two Treasury auctions that are worth watching. The Treasury will auction 5-year Notes tomorrow and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. On the other hand, strong sales usually make bonds more attractive to investors, bringing additional funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during afternoon hours tomorrow and Thursday.

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...

Tamalewagon · May 27, 2015

Wednesday?s bond market has opened in negative territory with stocks showing early strength. The major stock indexes are posting fairly strong gains during early trading, pushing the Dow up 93 points and the Nasdaq up 34 points. The bond market is currently down 6/32 (2.16%), but due to gains late yesterday we still may see a slight improvement in this morning?s mortgage rates.

This morning has no relevant economic data to drive bond trading and mortgage rates. It is worth noting though that we appear to be at an important level in the benchmark 10-year Treasury yield. We have seen this yield touch 2.15% and move higher recently. The inability to move below that threshold significantly raises the likelihood that yields may move higher from hear rather than lower. Since mortgage rates tend to follow bond yields, this means higher pricing for mortgage shoppers. On the other hand, breaking below 2.15% allows us to look towards 2.00%. Unfortunately, until that actually happens, I strongly recommend proceeding cautiously if still floating an interest rate and closing in the near future.

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...

Tamalewagon · May 28, 2015

Thursday?s bond market has opened flat despite early stock weakness. The major stock indexes are showing noticeable losses with the Dow down 72 points and the Nasdaq down 20 points. The bond market is currently down 1/32 (2.13%), but strength late yesterday should improve this morning?s mortgage rates by approximately .125 of a discount point if comparing to Wednesday?s morning pricing.

We saw strength in bonds late yesterday that caused some lenders to improve rates slightly. A pretty strong 5-year Treasury Note auction likely contributed to some of the improvement but not the sole cause. However, the decent level of investor demand in the 5-year securities helps to be optimistic about today?s 7-year Note sale. Results will be posted at 1:00 PM ET, so any reaction to the auction will come during early afternoon hours. The stronger demand for the securities, the better the chance we will see mortgage rates improve.

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...

Tamalewagon · May 29, 2015

Friday?s bond market has opened in positive territory following mixed economic data. Sizable losses in stocks are helping to boost bond prices during early trading. The Dow is currently down 144 points while the Nasdaq has lost 35 points. The bond market is currently up 8/32 (2.11%), which should improve this morning?s mortgage rates by approximately .125 of a discount point.

The first is the revision to the 1st quarter Gross Domestic Product (GDP) was posted at 8:30 AM ET this morning, showing that the economy actually contracted during the first three months of the year at an annual rate of 0.7%. This decline was expected and matched analysts? forecasts. Since it showed the economy shrank last quarter, we can consider the data slightly favorable for bonds and mortgage rates. Because it was of no surprise to the markets though, we haven?t see much of a reaction to the news.

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...

Tamalewagon · Jun 1, 2015

Monday?s bond market has opened in negative territory following mixed economic news to start the week. Stocks are showing minor losses with the Dow down 2 points and the Nasdaq down 19 points. The bond market is currently down 8/32 (2.15%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point.

April's Personal Income and Outlays data was posted at 8:30 AM ET this morning, revealing a 0.4% increase in income and no change in spending. The income reading was slightly stronger than expectations (+0.3%), meaning consumers had more money to spend than thought. However, the good news is that the flat level of spending was weaker than analysts were expecting (+0.2%) and the variance was a little wider than the income difference. In other words, the variance in the good news was more than the bad news, so we can consider the data slightly favorable for mortgage rates.

Overall, it appears that Friday is the key day of the week with regards to mortgage rate movement. However, Wednesday could also be an active day for mortgage pricing. As we have seen many times over the past couple weeks, we don't necessarily have to have a significant event or economic report released for the bond market and mortgage rates to become volatile. Therefore, it would be prudent to continue to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

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...

Tamalewagon · Jun 3, 2015

Rates are on the way up.

http://www.mortgagenewsdaily.com/mortgage_rates/blog/477043.aspx

Wednesday?s bond market has opened in negative territory again. The stock markets are showing sizable gains with the Dow up 146 points and the Nasdaq up 35 points. The bond market is currently down 16/32 (2.32%), which should push this morning?s mortgage rates higher again by approximately .375 of a discount point if comparing to Tuesday?s early pricing.

This morning?s only relevant economic news was May?s ADP Employment report that showed 201,000 new private-sector payrolls. This does not include government jobs and nearly pegged forecasts of 200,000. Therefore, we can consider the data neutral for mortgage rates, maybe slightly negative because many in the industry were hoping for a weaker number. Either way, this report didn?t have a significant impact on this morning?s trading or mortgage pricing. The continued overall negative tone was evident before the report was posted at 8:15 AM ET.

The Federal Reserve's Beige Book will be released at 2:00 PM ET this afternoon and does carry enough importance to affect mortgage rates. It details economic conditions throughout the U.S. by Federal Reserve region. It is relied upon heavily by the Fed to determine monetary policy during their FOMC meetings. If it shows surprisingly softer economic activity since the last report, the bond market may thrive and mortgage rates could drop this afternoon. If it reveals signs of inflation growing or rapidly expanding economic activity in many regions, we could see mortgage rates revise higher later today.

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...

Tamalewagon · Jun 4, 2015

Thursday?s bond market has opened in positive territory despite a couple of unfavorable economic reports. The stock markets are showing losses during early trading with the Dow down 45 points and the Nasdaq down 9 points. The bond market is currently up 15/32 (2.30%), but due to severe weakness late yesterday we will likely see little change in this morning?s mortgage rates if comparing to Wednesday?s early pricing. This morning?s gains more or less have erased yesterday?s afternoon weakness.

We saw the recent selling in bonds kick into high gear yesterday afternoon, pushing the benchmark 10-year Treasury Note yield to close at 2.36% and causing widespread upward revisions to mortgage rates along the way. This was not a result of the Fed Beige Book that was released at 2:00 PM yesterday. The selling had accelerated before that time and the contents of the report were actually more favorable for bonds than negative. It showed that one-third of the Fed districts reported slower economic conditions, which was more than the previous update, indicating some concern about growth. Still, the market seemed to ignore the news as bonds continued their downward spiral (upward in yield).

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...

Tamalewagon · Jun 5, 2015

Friday?s bond market has opened down sharply following stronger than expected results in this morning?s employment report. The stock markets are not having the reaction that we would expect, with the Dow down 15 points and the Nasdaq down 5 points. The bond market is currently down 24/32 (2.39%), which should push this morning?s mortgage rates higher by approximately .375 - .500 of a discount point over Thursday?s morning pricing.

There is no big surprise in the bond market?s reaction to this morning?s key data. The Labor Department posted May?s Employment report at 8:30 AM ET. It showed the unemployment rate rose 0.1% to 5.5%, that 280,000 new jobs were added during the month and average earnings rose 0.3%. The unemployment rate is technically good news for bonds since it was an increase, but it is being attributed to more people entering the workforce such as recent college graduates. Besides, it was too little to offset the other pieces.

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...

Tamalewagon · Jun 8, 2015

Monday?s bond market has opened in positive territory, recovering part of Friday?s sell-off. The stock markets are starting the week with minor losses of 23 points in the Dow and 17 points in the Nasdaq. The bond market is currently up 9/32 (2.37%), which should improve this morning?s mortgage rates by approximately .250 of a discount point from Friday?s morning pricing.

There is nothing of importance scheduled for release today or tomorrow. The rest of the week has three pieces of economic data that are relevant to mortgage rates in addition to two Treasury auctions that can also be influential. The first auction comes Wednesday while the data begins Thursday morning.

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..

Tamalewagon · Jun 10, 2015

Wednesday?s bond market has opened in negative territory due partly to sizable gains in stocks. The major stock indexes are in rally mode this morning with the Dow up 171 points and the Nasdaq up 47 points. The bond market is currently down 9/32 (2.47%), which should push this morning?s mortgage rates higher by approximately .250 of a discount point over Tuesday?s early pricing.

Today?s only relevant event is the 10-year Treasury Note auction that will be followed by 30-year Bonds tomorrow. Results of both auctions will be posted at 1:00 PM ET each day. If investor demand for the securities was high, we may see bonds rally during afternoon trading. However, weak demand for the securities could lead to selling and an increase to mortgage rates. It is common to see some pressure in bonds right before these sales as investors prepare for them, but as long as the sales are not weak those pre-auction losses are usually recovered once they are completed. If we get a reaction to today?s sale, it will come during early afternoon trading.

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...

Tamalewagon · Jun 12, 2015

Friday?s bond market has opened in positive territory even though this morning?s economic data gave us stronger than expected results. The stock markets are showing sizable losses despite that data, pushing the Dow lower by 109 points and the Nasdaq down 23 points. The bond market is currently up 7/32 (2.35%), which should improve this morning?s mortgage rates by approximately .250 - .375 of a discount point over Thursday?s morning pricing.

Today?s improvement in mortgage rates is much more a result of bond strength yesterday afternoon than it is about today?s early trading. Yesterday?s 30-year Bond auction went very well with many indicators pointing towards a strong level of interest from investors. Bonds had already improved from their morning levels yesterday when the auction results were posted at 1:00 PM ET, but they did extend those gains after. That led to many lenders improving rates during afternoon hours. The amount of the improvement you see in this morning?s rates will depend on how much of a downward revision was made late yesterday.

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...

Tamalewagon · Jun 15, 2015

Monday?s bond market has opened in positive territory with stocks starting the week with sizable losses. The Dow is currently down 175 points while the Nasdaq has fallen 51 points. The bond market is currently up 14/32 (2.34%), but due to weakness late Friday we will likely see little change in this morning?s rates if comparing to Friday?s morning pricing.

Today?s only relevant economic data was May's Industrial Production report at 9:15 AM ET. It showed a 0.2% decline in output at U.S. factories, mines and utilities, falling short of the 0.3% increase that was expected. This is a sign of manufacturing weakness, making the data good news for the bond and mortgage markets.

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...

Tamalewagon · Jun 16, 2015

Tuesday?s bond market has opened in positive territory following favorable housing related news. The stock markets are mixed but fairly calm with the Dow up 25 points and the Nasdaq down 1 point. The bond market is currently up 4/32 (2.34%). However, due to selling late yesterday, we still may see a slight increase in this morning?s mortgage rates if comparing to Monday?s morning pricing.

May's Housing Starts was today?s only relevant economic data. The Commerce Department said at 8:30 AM ET that new housing groundbreakings fell 11.1% last month. This was a much larger decline than expected, indicating that the new home portion of the housing sector may be slowing. That is good news for bonds and mortgage rates because weaker economic conditions make bonds more attractive to investors.

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...

Tamalewagon · Jun 18, 2015

Thursday?s bond market initially opened relatively flat but has since slipped into negative territory. The stock markets are showing solid gains with the Dow up 163 points and the Nasdaq up 52 points. The bond market is currently down 6/32 (2.34%), but we will still see an improvement of approximately .250 of a discount point in this morning?s mortgage rates if comparing to yesterday?s early pricing. All of that improvement can be attributed to strength following Wednesday?s afternoon FOMC events.

May's Consumer Price Index (CPI) was the first of today?s three economic reports. It showed that the overall CPI reading rose 0.4% while the core data rose 0.1%. Both readings were slightly softer than expectations (0.5% and 0.2%), indicating that inflationary pressures at the consumer level of the economy were not as strong as many had thought. That makes the data good news for bonds and mortgage rates because high levels of inflation causes bonds to be less appealing to investors.

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...

Tamalewagon · Jun 19, 2015

Friday?s bond market has opened well in positive territory despite a lack of relevant economic data. The stock markets are showing minor losses with the Dow down 38 points and the Nasdaq down 13 points. The bond market is currently up 19/32 (2.26%), which should improve this morning?s mortgage rates by approximately .250 of a discount point.

There is nothing of importance being release today that is expected to affect mortgage rates. That creates some confusion about today?s move in my opinion, especially with the benchmark 10-year Treasury Note yield falling below 2.30%. Is this a fool?s rally, only to be reversed next week? Or is this the beginning of sizable downward move in yields and mortgage rates? Time will tell, although I am leaning towards the conservative side on rate direction for the time being. In other words, enjoy today?s rally if you have not locked a rate yet, but proceed very cautiously. It will be a quick move back to 2.35% and above if indeed today?s gains are only temporary.

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 Market Update/Purchase and Refinance Mortgage info

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