Mortgage Market Update/Purchase and Refinance Mortgage info

[Tamalewagon]

Tuesday?s bond market has opened in positive territory despite stronger than expected economic data. The stock markets are showing relatively minor gains with the Dow up 35 points and the Nasdaq up 19 points. The bond market is currently up 4/32 (2.08%), which should improve this morning?s mortgage rates by a little more than .125 of a discount point over Monday?s early pricing.

We saw bonds improve late yesterday as stocks losses got larger. The Dow closed the day down 312 points while the Nasdaq lost 142 points. When stocks are in selling mode, bonds usually become more appealing to investors to escape the volatility. This is known as flight-to-safety. The end result was a small improvement in mortgage rates by many lenders. If your lender revised pricing lower yesterday afternoon, you likely will see a smaller improvement this morning.

September's Consumer Confidence Index (CCI) was released at 10:00 AM ET this morning. It showed a reading of 103.0 that greatly exceeded forecasts of 96.0. Analysts were expecting to see a decline from August?s revised 101.3 reading. This means that surveyed consumers felt much better about their own financial and employment situations than many had thought. Because rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, we should consider this data negative for bonds and mortgage rates.

Tomorrow?s only relevant release is the ADP Employment report for September at 8:15 AM ET. It has the potential to cause movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs of ADP's clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have recently seen reaction to the report, we will be watching it. Analysts are expecting it to show that 200,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

 

[YoPengo]

Looks like Derek and Sylvia are finally pulling the trigger. :thumbup:

You licensed in AZ? I'm looking at houses this weekend. May pay cash or a small <100K mortgage.

 

[Tamalewagon]

Looks like Derek and Sylvia are finally pulling the trigger. :thumbup:

You licensed in AZ? I'm looking at houses this weekend. May pay cash or a small <100K mortgage.

Hi John! That's excellent. Unfortunately I am not licensed in AZ but I can give you a referral if needed. :thumbup: Are you guys going to pull the trigger in Prescott?

 

[YoPengo]

Hi John! That's excellent. Unfortunately I am not licensed in AZ but I can give you a referral if needed. :thumbup: Are you guys going to pull the trigger in Prescott?

With us you never know. This trip to Prescott is a recon mission. See if we like it.

 

[Tamalewagon]

Thursday?s bond market has opened relatively flat despite favorable economic news and early stock weakness. The major stock indexes are well into negative ground with the Dow down 110 points and the Nasdaq down 29 points. The bond market is currently up only 1/32 (2.03%), but due to another round of bond gains late yesterday afternoon we should see an improvement in this morning?s mortgage rates of approximately .125 - .250 of a discount point.

Today?s first economic report was the weekly unemployment update at 8:30 AM ET. It showed that 277,000 new claims for unemployment updates were filed last week. This was an increase from the previous week?s 267,000 initial filings and higher than the 270,000 that was expected. Those numbers hint at a weakening employment sector that makes the data slightly favorable to the bond and mortgage markets.

The Institute for Supply Management (ISM) gave us today?s important data with the release of their manufacturing index for September at 10:00 AM ET. They announced a reading of 50.2 that fell short of expectations (50.6) and declined from August?s 51.1. The decline is good news for bonds and mortgage rates because it means that fewer surveyed trade executives felt business improved in September than in August. More importantly, the 50.2 is extremely close to the critical benchmark of 50.0. A reading below 50 means that more executives said business worsened in the month than those who felt it had improved. That is a recessionary sign for the manufacturing sector, which would be great news for mortgage rates. It will be interesting to see what happens with October?s reading, but for the time being the news is helping to boost bonds.

Tomorrow brings us the release of the almighty monthly Employment report. The Labor Department will post September's employment numbers at 8:30 AM ET tomorrow. This report will reveal the U.S. unemployment rate, number of new payrolls added or lost during the month and average hourly earnings. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, falling payrolls and a drop in earnings. If this report gives us weaker than expected readings, bond prices should move higher and we should see lower mortgage rates Friday. However, stronger than forecasted readings could cause a sizable spike in mortgage pricing and start another upward trend in rates. Analysts are expecting to see the unemployment rate remain at 5.1%, an increase of 205,000 new jobs from August's level and a 0.2% increase in earnings.

The Commerce Department will post August's Factory Orders data at 10:00 AM ET tomorrow. This manufacturing sector report is similar to last week's Durable Goods Orders release, but also includes orders for non-durable goods such as food and clothing. It can sometimes impact the bond market enough to change mortgage rates if it varies from forecasts by a wide margin. However, because it follows the monthly Employment report, I suspect the markets will not be focused on this report. Analysts are forecasting a decline of 1.0% in new orders, meaning manufacturing activity slowed in August. This would be good news for the bond market and mortgage pricing.

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]

http://www.mortgagenewsdaily.com/mortgage_rates/blog/515986.aspx

 

[Tamalewagon]

Friday?s bond market has opened sharply higher following the release of a surprisingly weak Employment report. The stock markets are reacting negatively to the news with the Dow down 184 points and the Nasdaq down 49 points. The bond market is currently up 34/32 (1.92%), which should improve this morning?s mortgage rates by approximately .250 of a discount point if comparing to Thursday?s morning pricing.

September?s Employment report was posted at 8:30 AM ET this morning. It revealed an unemployment rate of 5.1%, as expected. However, that was the only reading that came in at forecasts. The report showed that only 142,000 new jobs were added to the economy when analysts were expecting 205,000. Of those new payrolls, only 118,000 were private-sector jobs, falling drastically short of the 200,000 that Wednesday?s ADP report indicated. Furthermore, we saw downward revisions in August?s and July?s numbers that totaled 59,000 jobs. And the average hourly earnings reading that was expected to rise 0.2% actually was unchanged.

This report surprised many people, including myself. Besides September?s payroll miss, the downward revisions to the summer months is also fairly significant because those months traditionally bring upward changes. Therefore, we went from expecting stronger than announced payrolls to now being much lower. The news is directly affecting predictions on when the Fed will raise rates. The downward revisions and last month?s soft number will indeed likely alter the Fed?s plans. I was fairly certain that no change to key short-term rates would come at last month?s FOMC meeting and I was confident they would not make a move at this month?s meeting. As of yesterday, December?s FOMC meeting was the first possible rate hike in my opinion. After seeing today?s report, I now believe that we won?t see a rate change until 2016.

Today?s news has pushed the benchmark 10-year Treasury Note yield below a very important threshold of 2.00%. I was maintaining the cautious approach towards rates with lock recommendations because that level has been so hard to break through and hold. This surprisingly weak report was the catalyst needed to break below. If the Fed indeed does delay raising rates until 2016, it is quite possible we could see the 10-year yield below 2.00% for some time. If they make a move later this year, we can expect yields to move higher and likely above that point. That is the easy part to predict. The difficult question is what will happen between now and the end of the year? If floating an interest rate or considering financing, enjoy this week?s drop in yields and mortgage rates. However, proceed cautiously because I believe we are in for more volatility. That?s not necessarily bad news though since mortgage rates tend to track bond yields and the momentum clearly is lower currently.

Not that it matters much because of the magnitude of the Employment numbers, but this morning?s second report also gave us favorable results. The Commerce Department released August's Factory Orders data at 10:00 AM ET, announcing a 1.7% decline in new orders at U.S. factories for durable and non-durable goods. This was a larger drop than the 1.0% that was expected, indicating the manufacturing sector was softer than many had thought in August. Since bonds usually thrive in weaker economic conditions, this is good news. Unfortunately, it has not had much of an impact on today?s rates because bonds are already rallying from the day?s first report.

Next week doesn?t appear to have any important economic data set for release. There are a couple of Treasury auctions that can influence mortgage rates and the minutes from last month?s FOMC meeting. There is nothing relevant scheduled for Monday. Look for details on next week?s calendar in Sunday evening?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...

 

[Tamalewagon]

by: Matthew Graham

Mortgage Rates Remain Lower After Volatile Reaction to Jobs Data

Oct 2 2015, 1:55PM

Mortgage rates had a wild day today. If you've spoken to a mortgage originator about rates any time in the past 24 hours, it's important to understand just how immense the swings have been. Let's start with the good news. The average conventional 30yr fixed rate quote thundered to its best levels in more than 5 months this morning, making it easily to 3.75% for almost any lender and even as low as 3.625% for quite a few lenders. This, after the big jobs report came in significantly weaker than expected.

The bad news is that the afternoon saw a fairly substantial reversal in the bond markets that underlie mortgage rates. When those trading levels begin losing ground, mortgage lenders are increasingly at risk of recalling rate sheets and sending out new, higher rates (aka "mid day reprice"). By the early afternoon, most lenders had pulled back their earlier, more aggressive offerings, leaving us with rates that are still better than yesterday's, but not nearly as low as this morning's.

The fact remains that the jobs report provided a compelling negative argument against a Fed rate hike and against general economic growth itself. Without a strong growth outlook, it will be hard for longer term rates to move higher, no matter what the Fed does with short term rates. There can still be plenty of volatility in the near-term though. That makes today's 5-month lows yet another good opportunity to lock for those that aren't interested in wading through the volatility.

 

[Tamalewagon]

Monday?s bond market has opened in negative territory, due partly to early strength in stocks. The major stock indexes are starting the week with solid gains, pushing the Dow higher by 182 points and the Nasdaq up 37 points. The bond market is currently down 10/32 (2.02%), which should push this morning?s mortgage rates higher by approximately .250 of a discount point if comparing to Friday?s morning pricing. A good portion of that increase is a result of weakness in bonds late Friday, so if your lender did make an upward revision Friday afternoon, you likely will see less of an increase this morning.

There is nothing of relevance set for release today or tomorrow. In fact, this week has little in terms of scheduled economic reports that are likely to affect mortgage rates. There are no monthly or quarterly reports set for release that are worth watching. We do have a couple of events that certainly can cause mortgage rates to move mid-week, but none of them are considered highly important or expected to be a market mover.

For the most part, we only have a couple of Treasury auctions, the minutes from the most recent FOMC meeting and last week?s unemployment numbers to be concerned about. I suspect stocks will drive bond trading and mortgage rates movement several days this week, so we will be focusing on which direction the major indexes are heading for mortgage pricing guidance.

Overall, I see Thursday as the key day of the week with an auction, weekly unemployment numbers and the FOMC minutes all taking place. We still may see some movement in rates from day to day but unless something unexpected happens in the geopolitical arena or stock movement, any move will likely be minor. I never recommend cutting contact off with your mortgage professional if still floating an interest rate. However, this is probably going to be a fairly calm week for mortgage rates, at least compared to recent weeks.

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]

Conventional rates are down again today campers...

Conforming 720 fico at 70% loan to value is 3.625% at zero points! Yes that's a 30 year fixed rate.

Conforming Jumbo 720 fico at 70% loan to value is 3.75% at zero point! Yup...that's a 30 year fixed rate too.

866-476-2494 office/online application http://wenhemortgageandr.loandiscovery.com/page-navigator.aspx?pageid=8

---------------------------------------------------------------------------------------------------------------------------


by: Matthew Graham

MBS MID-DAY: Slightly Weaker but Outperforming Treasuries

Oct 5 2015, 1:05PM


For lack of a better way to explain it, Friday's post-NFP rally was like a final, glorious charge into enemy territory. Bond markets had already pushed a bit farther than they were likely to push, and had kept up the fight for a bit longer. Coming into NFP, the bar was set high in terms of how weak the data would need to be in order to get a positive response from bond markets.

Truth was stranger than fiction as the data was so weak that it left no doubts. The only question was when bonds would bounce and how much of the gains would we give back. THIS is the psychology that we see playing out in markets today--this unapologetic contingent of market participants who weren't keeping it a secret that they were looking to "sell strength" if bonds managed a strong showing after NFP.

Treasuries continue leaking sideways to slightly higher. Interestingly enough, they also continue trading in slightly better territory than before Friday's NFP. MBS are doing better by comparison. They're weaker, to be sure, but not as much as Treasuries. Here's how the two charts look by comparison:

 

[Tamalewagon]

Rates are still extremely low...

Tuesday?s bond market has opened in negative territory with stocks in positive ground and no data to drive trading. The Dow is currently up 78 points while the Nasdaq is up 1 point. The bond market is currently down 5/32 (2.07%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point.

Today has nothing of relevance set for release or taking place that is expected to influence mortgage rates. We can expect stocks to be the cause of an intra-day change to rates. If the major indexes extend this morning?s gains, I would not be surprised to see pressure in bonds that leads to a small upward revision to mortgage pricing later today. On the other hand, if this morning?s early stock gains dwindle, bonds could benefit, causing an improvement sometime this afternoon.

Tomorrow has the first relevant event of the week with number one of this week's two important Treasury auctions. The sale of 10-year Notes will be held tomorrow while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as the auctions are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Those results will be announced at 1:00 PM each sale day, so any reaction will come during early afternoon trading tomorrow or 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... 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]

http://www.mortgagenewsdaily.com/10062015_corelogic_hpi.asp

 

[Tamalewagon]

Wednesday?s bond market has opened in negative territory with stocks showing early strength and a related auction taking place today. The major stock indexes are posting sizable gains, pushing the Dow higher by 157 points and the Nasdaq up 33 points. The bond market is currently down 14/32 (2.08%), but due to strength in bonds late yesterday we should see an increase of only .125 of a discount point in this morning?s pricing.

There is no factual economic data being posted today, but we do have the first of this week's two important Treasury auctions. The sale of 10-year Notes is taking place today while 30-year Bonds will be sold tomorrow. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as the auctions are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Results will be announced at 1:00 PM, so any reaction will come during early afternoon trading.

Besides the 30-year Bond auction, tomorrow has two releases worth watching. The first is last week's unemployment update at 8:30 AM ET. It is expected to show that 275,000 new claims for unemployment benefits were filed last week, down slightly from the previous week?s 277,000 initial claims. This report usually doesn't cause much movement in the markets or mortgage rates unless it shows a significant jump or drop in initial claims for benefits. But since this week has so little to drive trading, it could draw more attention than it usually does. The higher the number of claims, the better the news it is for bonds and mortgage rates.

Also tomorrow, we will get the minutes from last month?s FOMC meeting. They will be posted at 2:00 PM ET, so any reaction to them will come during mid-afternoon trading. These may move the markets or could be a non-factor, depending on what they say. With little else being posted this week they will likely be a little more influential than usual. The key points traders are looking for are concerns over our domestic and the global economies, inflation and the Fed's next monetary policy move. If Fed members were concerned about the economy continuing to grow, we may see the bond market move higher and mortgage rates lower tomorrow afternoon. It will be interesting to see how much debate and disagreement amongst members took place during the meeting, particularly about when they will start raising key short-term interest rates. It is worth noting though that the last FOMC meeting was followed by revised economic predications and a press conference with Fed Chair Yellen. Therefore, the likelihood of seeing a significant surprise in the minutes is relatively low.

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]

http://www.mortgagenewsdaily.com/10062015_mba_mcai.asp

 

[Tamalewagon]

http://www.mortgagenewsdaily.com/10072015_pending_home_sales.asp

 

[Tamalewagon]

Friday?s bond market has opened flat despite stronger than expected economic news. The stock markets are mixed but calm with the Dow up 11 points and the Nasdaq down 4 points. The bond market is currently up 1/32 (2.01%), which should keep this morning?s mortgage pricing at yesterday?s levels.

September's Industrial Production data was posted at 9:15 AM ET this morning, showing a 0.2% decline in output at U.S. factories, mines and utilities. This hints at softening manufacturing activity, making the data good news for bonds and mortgage rates. However, because the decline came of no surprise and this is only a moderately important report, the results have had little impact on this morning?s mortgage rates.

The University of Michigan posted their Index of Consumer Sentiment for October just before 10:00 AM ET this morning. It came in at 92.1, exceeding forecasts of 88.4 and up from September?s 87.2. This means surveyed consumers were much more comfortable with their own financial and employment situations than many had thought. Because rising confidence usually translates into stronger levels of consumer spending, we should consider this data bad news for bonds and mortgage rates.

Next week doesn?t have too much scheduled that we need to be concerned with. The majority of the data that is being posted is housing-related that generally does not have a significant influence on the financial or mortgage markets. There is nothing set for release Monday, so we can expect weekend news and stock movement to drive bond trading at the start of the week. Look for details on next week?s calendar in Sunday evening?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...

 

[Tamalewagon]

http://www.mortgagenewsdaily.com/mortgage_rates/blog/520024.aspx

 

[Tamalewagon]

Wednesdays bond market has opened in positive territory despite a calm open in stocks and no relevant news or data to drive trading today. Stocks are mixed during early trading with the Dow up 21 points and the Nasdaq down 4 points. The bond market is currently up 9/32 (2.03%), which should improve this morning?s mortgage rates slightly.

Tomorrow has three pieces of data scheduled for release, but none of them are expected to draw too much attention. The first is last week?s unemployment figures at 8:30 AM ET. They are expected to show that 265,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week?s 255,000 initial filings, indicating that the employment sector softened last week. Because rising claims hints at a weakening employment sector, the higher the number of new filings the better the news it is for mortgage rates. However, since this is only a weekly snapshot it usually takes a wide variance from forecasts for the report to cause a noticeable move in mortgage pricing.

The National Association of Realtors will post September's Existing Home Sales data at 10:00 AM ET tomorrow. This report gives us an indication of housing sector strength and mortgage credit demand by tracking home resales in the U.S. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a small increase in sales from August to September, meaning the housing sector strengthened slightly. That would be bad news for the bond market since a strengthening housing sector makes broader economic growth more likely and bonds less appealing to investors.

September's Leading Economic Indicators (LEI) will be released by the Conference Board at 10:00 AM ET tomorrow. This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for a decline of 0.1% from August's reading. This would indicate that economic activity is likely to remain fairly flat over the next couple of months. That would be relatively favorable news for the bond market and mortgage rates, but this report is considered to be only moderately important. Therefore, a small increase or decline would not be of much concern to the bond and mortgage markets. Ideally, we would like to see a sizable decline though.

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]

Fridays bond market has opened in negative territory with stocks showing sizable gains. The Dow is up 104 points while the Nasdaq has gained 90 points. The bond market is currently down 14/32 (2.07%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point.

There is nothing of importance scheduled for release today, so as expected, we are seeing bonds react to stock movement. If the major stock indexes extend their morning gains, we could see more pressure in bonds that lead to an upward revision in mortgage pricing later today.

Next week is going to be very interesting and active. We have a good handful of reports scheduled for to be posted, including the extremely important initial reading of the 3rd Quarter Gross Domestic Product (GDP). But what is going to draw even more attention is the FOMC meeting taking place that some analysts think will bring the first rate increase to key short-term interest rates in over 9 years. I am not so convinced it will come next week, although I admit it is a possibility. We should see plenty of movement in the markets leading up to the announcement as investors prepare for it.

There is relevant data scheduled for Monday when Septembers New Home Sales report is released. This is generally considered to be of low importance to the markets so its results likely will have little impact on mortgage rates. Look for details on it and the rest of the weeks calendar in Sunday evenings 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... 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]

http://www.mortgagenewsdaily.com/mortgage_rates/blog/522056.aspx

 

[Tamalewagon]

Mondays bond market has opened in positive territory due partly to weaker than expected housing news. The stock markets are starting the week with modest losses of 21 points in the Dow and 7 points in the Nasdaq. The bond market is currently up 7/32 (2.06%), but due to weakness late Friday we should see little change in this morning?s mortgage rates if comparing to Friday?s early pricing.

Today had a single piece of economic data released. September's New Home Sales was posted at 10:00 AM ET today. The Commerce Department said that sales of newly constructed homes fell 11.5% last month, falling well short of expectations. This indicates the new home portion of the housing sector was softer than many had thought last month, making the data favorable for bonds and mortgage rates.

The rest of the week brings us the release of six more economic reports and two Treasury auctions in addition to another FOMC meeting. We have data or other events that are expected to influence mortgage rates set every day, so we could see plenty of movement in rates this week. The data scheduled this week ranges from minor to extremely important, meaning some reports will have a much bigger impact on trading than others.

Tomorrow has two of those reports, starting with the Durable Goods Orders report for September at 8:30 AM ET. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. Analysts are currently calling for a decline in new orders of approximately 1.3%. If we see a large increase in orders, mortgage rates will probably rise as bond prices fall. On the other hand, a significantly larger than expected decline should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast. Therefore, a small variance from forecasts likely will have little effect on tomorrow's bond trading or mortgage pricing.

October's Consumer Confidence Index (CCI) will be released at 10:00 AM ET tomorrow. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a drop in confidence from last month's 103.0 reading. That would mean that consumers did not feel as good about their own financial and employment situations as they did last month, indicating they are less likely to make large purchases in the near future. That would be good news for the bond market because consumer spending makes up over two-thirds of our economy. Current forecasts are showing a reading of 102.5. The lower the reading, the better the news it is for mortgage rates.

Overall, it appears Wednesday or Thursday could be the most active day for mortgage rates while today was the best candidate for lightest. The importance of tomorrow and Friday's reports makes them likely to be active day also, although I suspect the most movement in rates will take place the middle days due to the FOMC meeting and GDP report. With some much data and other events relevant to mortgage rates scheduled this week, it would be prudent 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... 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]

Tuesday?s bond market has opened in positive territory following weaker than expected economic data. The major stock indexes aren?t doing anything to hurt bonds either by being in negative ground in early trading. They are showing minor losses of 31 points in the Dow and 11 points in the Nasdaq. The bond market is currently up 10/32 (2.02%), which should improve this morning?s mortgage rates by approximately .125 of a discount point.

The Commerce Department gave us the first of this morning?s two relevant reports. At 8:30 AM ET they posted September?s Durable Goods Orders report that showed a 1.2% decline in new orders for big-ticket products. These are items that are expected to last three or more years and include appliances, electronics and airplanes. This was very close to the 1.3% decline that was expected and considering the traditional volatility in this data we can label it as a match. The good news came in a secondary reading that strips out transportation-related orders such as new airplanes. That reading showed a 0.4% drop when analysts were expecting to see a small increase. Since the data does give some indication of weaker than expected manufacturing activity, we can consider this report slightly favorable news for mortgage rates.

Octobers Consumer Confidence Index (CCI) was posted at 10:00 ET today, revealing a reading of 97.6. This was a sizable decline from September?s revised reading of 102.6 and well below forecasts of 102.5. That means surveyed consumers were not nearly as optimistic about their own financial and employment situations this month as many had thought. Because waning confidence usually translates into weaker levels of consumer spending and economic growth, this is good news for bonds and mortgage rates.

Tomorrow has two events taking place, both during afternoon trading. The first is the 5-year Treasury Note auction results at 1:00 PM ET. If this type of sale is met with a strong demand from investors, bond prices often rise during afternoon trading. However, I don?t think we will see too much of a reaction in tomorrow?s auction because of the second event of the day that is much more important to the broader markets.

The second event of the day will be the FOMC meeting adjournment at 2:00 PM ET. Some market participants feel this is when the Fed will make their first increase to key short-term interest rates since 2006. Since even the Fed has indicated they expect a rate hike before the end of the year, suspense is building that it will come at this meeting. There is only one more meeting scheduled this year, so if it doesn?t happen tomorrow the odds rise sharply it will come at December?s meeting. It is my opinion that we will not see a move at this meeting. I think December is the earliest with a decent chance it will not come until early 2016. Look for plenty of reaction and volatility to the post-meeting statement during mid-afternoon trading tomorrow.

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...

 

[Tamalewagon]

Wednesdays bond market has opened relatively flat as market participants await today?s FOMC results. The stock markets are showing early gains with the Dow up 68 points and the Nasdaq up 2 points. The bond market is currently down 2/32 (2.04%), which should keep this morning?s mortgage rates close to yesterday?s levels.

There is no relevant economic data being posted today, but we do have two afternoon events taking place, one of which is likely to significantly move the markets. The less important of the two is the 5-year Treasury Note auction results at 1:00 PM ET. If this type of sale is met with a strong demand from investors, bond prices often rise during afternoon trading. However, I don?t think we will see too much of a reaction today because of the second event that is much more important to the broader markets.

That would be the adjournment of this week?s two-day FOMC meeting at 2:00 PM ET. Some market participants feel this is when the Fed will make their first increase to key short-term interest rates since 2006. Since even the Fed has indicated they expect a rate hike before the end of the year, suspense is building that it will come at this meeting. There is only one more meeting scheduled this year, so if it doesn?t happen today the odds rise sharply it will come at December?s meeting. It is my opinion that we will not see a move at this meeting. I think December is the earliest with a decent chance it will not come until early 2016. Look for plenty of reaction and volatility to the post-meeting statement during mid-afternoon trading.

The strong personal feeling that no rate hike will come from this meeting is the basis for shifting to a less conservative stance on mortgage rates. If we don?t see an increase and don?t get a strong indication from the post-meeting statement that one will come at the next meeting, I suspect the bond market will react favorably and mortgage rates will improve. That rally may be short-lived though, so be prepared to act if we do get the expected improvement and still floating a rate. Depending on how the markets react and what the statement actually says, I could shift back to a cautious stance on rates as early as this afternoon.

Look for an update to this report shortly after the markets have an opportunity to initially react and then stabilize after the announcement is made. There is key data scheduled for release tomorrow (initial GDP reading), but it will be addressed in this afternoon?s revision.

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...

 

[Tamalewagon]

Thursdays bond market has opened in negative territory, extending yesterday?s post-FOMC selling. The stock markets are giving back some of yesterday?s gains with the Dow down 59 points and the Nasdaq down 17 points. The bond market has added to yesterday?s losses, down 16/32 this morning (2.15%). This should push mortgage rates higher an additional .125 - .250 of a discount point. Combined with yesterday?s late revision, we should see an increase of approximately .375 of a discount point from Wednesday?s morning pricing.

The preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) was released at 8:30 AM ET today. It showed that the U.S. economy grew at a 1.5% annual rate, falling just short of the 1.6% that was expected. This is a sizable decline from the 2nd quarter?s 3.9% rate, but since it was not far from expectations, the news has had little impact on this morning?s bond trading and mortgage pricing.

Also posted early this morning was last week?s unemployment figures. They showed that 260,000 new claims for unemployment benefits were filed last week. This was up slightly from the previous week?s 259,000 but short of the 264,000 initial claims that were forecasted. The fact the number was softer than expected makes the data negative for mortgage rates. However, this number is not affecting this morning?s trading. It is a small miss in a weekly report, which is not enough to fuel this morning?s bond selling.

We also need to watch for the results of today?s 7-year Treasury Note auction at 1:00 PM ET. Yesterday?s 5-year Note sale did not go well, so we don?t have a lot to be optimistic about in today?s auction. If the sale was met with a poor demand from investors, we could see some further selling in bonds later today. Although, I don?t believe it will be enough to cause a change to mortgage rates on its own.

Tomorrow has three economic reports scheduled that may affect mortgage rates. The 3rd Quarter Employment Cost Index (ECI) will be released at 8:30 AM ET. It is the least important of the day's three reports. This data tracks employer costs for salaries and benefits, giving us an indication of wage inflation pressures. Rapidly rising costs raise wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.5%. A smaller than expected increase would be good news for mortgage rates, but this is not one of the more important reports of the week. That means will take a large variance from forecasts for this report of have a noticeable influence on mortgage pricing.

September's Personal Income and Outlays report will also be posted early tomorrow morning. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up such a large part of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see a 0.2% increase in income and a 0.2% rise in spending. Smaller than expected increases in both readings would be good news for the bond market and mortgage pricing.

The week's last report comes just before 10:00 AM ET when the University of Michigan updates their Index of Consumer Sentiment for this month. This report is moderately important because it helps us measure consumer confidence, which is believed to indicate consumers' willingness to spend. Current forecasts show this index rising from its preliminary reading of 92.1 to 92.6. Good news for mortgage rates would be a sizable decline in the index.

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]

Wednesdays bond market has opened up slightly, following suit of the major stock indexes. The Dow is currently up 13 points while the Nasdaq has gained 8 points. The bond market is currently up 2/32 (2.20%), but due to some weakness late yesterday we still should see a slight increase in this morning?s mortgage rates if comparing to Tuesday?s morning pricing.

Todays ADP Employment report revealed an increase of 182,000 new private sector payrolls. This was close to forecasts of 180,000, so cannot be considered a surprise. The fact that this was a decline from September?s revised 190,000 is good news, but since the variance from expectations was minor, it has had little influence on this morning?s mortgage rates.

We are seeing some negative reaction to comments made by Fed Chair Janet Yellen during her testimony to the House Financial Services Committee as part of a busy week of Fed speaking engagements. The topic of her appearance was supposed to be bank regulations but her answer to a question reiterated a strong likelihood of a December rate hike. While that is not a surprise to anyone in the market, it does act as a reminder so the markets have shown some reaction. However, I don?t believe it is anything that we need to be too concerned with today.

Tomorrow has two minor pieces of economic data set for release at 8:30 AM ET. The first is last week?s unemployment figures that are expected to show 262,000 new claims for unemployment benefits were filed last week. This would be a small increase from the previous week?s 260,000 initial claims, indicating the employment sector softened slightly last week. Since rising claims hints at a weakening employment sector, the larger the number the better the news it is for mortgage rates. Although, it is worth noting that because this is only a weekly snapshot, it usually takes a surprise increase or decline for the report to noticeably affect rates.

The 3rd Quarter Productivity reading will be the second report of the day. It is expected to show a 0.2% decline in worker productivity during the third quarter. A large increase would be good news for the bond market because higher levels of employee productivity allow the economy to expand without inflationary pressures being a concern. This is a relatively low importance report, meaning it will take a significant variance from forecasts for it to directly affect mortgage rates also.

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]

http://www.mortgagenewsdaily.com/mortgage_rates/blog/526912.aspx

 

[Tamalewagon]

Thursdays bond market has opened in negative territory as market participants prepare for tomorrow major economic release. The stock markets are showing relatively minor gains of 45 points in the Dow and 6 points in the Nasdaq. The bond market is currently down 4/32 (2.24%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point.

We are seeing some weakness in bonds despite favorable results from both of this morning?s 8:30 AM economic reports. Last week?s unemployment figures showed that new filings jumped to 276,000 from the previous week?s revised total of 260,000. Because rising claims is an indicator of a softening employment sector, we should consider this data good news for mortgage rates. Unfortunately, it is only a weekly report and the markets are more focused on tomorrow?s monthly data.

The second report of the morning was the 3rd Quarter Productivity reading that showed a surprise 1.6% increase when analysts were expecting to see a slight decline. The increase is actually good news for bonds and mortgage pricing because higher levels of productivity allow economic growth without fear if rapid inflation. Still, this report is considered to be of low importance to the markets. Therefore, its impact on today?s trading has been minimal.

Tomorrow closes the week with the release of the almighty monthly Employment report. The Labor Department will post October's employment stats at 8:30 AM ET tomorrow morning. The report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate, holding at 5.1%, an increase in payrolls of approximately 181,000 and a 0.2% increase in average earnings. Weaker than expected readings should renew concerns about the labor market and rally bonds enough to improve mortgage rates, especially if the stock markets react poorly to the news. This is a key report that often causes a great deal of volatility in the financial 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... 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]

Monday?s bond market has opened in negative territory as Friday?s selling extends into this morning?s session. This is despite a weak open in stocks that has the Dow down 146 points and the Nasdaq down 28 points. The bond market is currently down 12/32 (2.36%), which should push this morning?s mortgage rates slightly higher than Friday?s early levels.

There is nothing of importance scheduled for today, so we can expect bonds to remain in negative ground. The rest of this holiday-shortened week brings us the release of only three monthly or quarterly economic reports for the markets to digest along with two relevant Treasury auctions. One of those three reports is considered to be a key piece of data though.

All of this week?s relevant events take place the last couple days. We have two Treasury auctions, Retail Sales data, Producer Price Index (PPI) and the preliminary version of the University of Michigan's Index of Consumer Sentiment.

Overall, Friday is likely to be the most active day for mortgage rates with all of this week's data scheduled, including the highly important Retail Sales report. The calmest will probably be Wednesday since I see many lenders being open for business despite the bond market closure for Veteran?s Day. There is a good possibility of seeing a fairly calm day tomorrow. Despite the light economic calendar, there is still a decent chance of seeing a noticeable move in rates again this week. I suspect we may see yields (and mortgage rates) start to drift lower soon. Still, it would prudent to maintain contact with your mortgage professional if still floating an interest rate.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... 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]

Thursday?s bond market has opened in positive territory, extending yesterday?s late gains. The stock markets are flat with the Dow and Nasdaq both nearly unchanged from yesterday?s close. The bond market is currently up 8/32 (2.24%), which should improve this morning?s mortgage rates by a little more than .125 of a discount point if comparing to Wednesday?s morning?s rates.

Yesterday afternoon?s FOMC minutes didn?t reveal too many surprises but did seem to strengthen the likelihood the Fed will raise short-term interest rates at next month?s FOMC meeting. There was some discussion on verbiage of the post-meeting statement that a couple members felt would misrepresent their stance as being firm on making a move next month. We will get this month?s employment figures before that meeting, so they will be highly influential in the Fed?s decision that will come mid-month. Both the bond and stock markets reacted favorably after the minutes were released, leading to some minor lender rate improvements during afternoon trading.

This morning?s first report was last week?s unemployment figures at 8:30 AM ET that revealed 271,000 new claims for unemployment benefits were filed last week. This was a decline from the 276,000 of the previous week and just below forecasts of 272,000 initial claims, hinting that the employment sector strengthened slightly last week. Since it is only a weekly report and did not miss forecasts by much, we can consider this news neutral for the bond and mortgage markets.

At 10:00 AM ET this morning, the Conference Board posted their Leading Economic Indicators (LEI) for October. It showed a 0.6% rise, meaning the indicators are pointing towards economic growth over the next three to six months. That isn?t good news for bonds, but since it pegged forecasts and the report is not considered to be that important, it has had no influence on today?s mortgage pricing.

Tomorrow has nothing scheduled for release that is of relevance to the bond market or mortgage rates. We can expect stocks to have some impact on bond trading, but unless something unexpected happens it will probably be a pretty calm day in terms of movement in rates.

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...

 

[Tamalewagon]

Tuesdays bond market has opened in positive territory following weaker than expected results from a pretty important economic report. The stock markets are reacting similarly with the Dow up 80 points and the Nasdaq up 17 points. The bond market is currently up 8/32 (2.18%), which should improve this morning?s mortgage rates by approximately .125 - .250 of a discount point.

Novembers manufacturing index from the Institute for Supply Management (ISM) was today?s only relevant economic data. This important release showed a reading of 48.6 when analysts were expecting to see 50.4. The decline from October?s 50.1 is good news in itself. The better news is the fact that we have a reading below 50 for the first time in three years. That threshold indicates that more surveyed manufacturing executives felt business worsened during the month than those who said it had improved. A sub-50 reading is considered recessionary and makes long term securities such as mortgage-related bonds more attractive to investors. It also is a fairly significant sign of economic weakness that could affect the Fed?s expected rate hike later this month.

There are three reports scheduled for tomorrow that have the potential to influence mortgage rates. The first is the ADP Employment report at 8:15 AM ET that tracks changes in private-sector jobs of the company's clients that use them for payroll processing. While this report does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this week's calendar. Analysts are expecting to see 185,000 new private-sector payrolls for November. The smaller the number of jobs, the better the news it is for bonds and mortgage shoppers.

Next up is the revised 3rd Quarter Productivity numbers at 8:30 AM ET. This index is expected to show a upward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for the bond market. It's the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 2.2%, up from the previous estimate of 1.6%. The higher the reading, the better the news for the bond market. Although, this report generally does not have a noticeable impact on mortgage pricing, so it will take a wide variance to draw much attention.

Lastly, the Federal Reserve will release their Beige Book at 2:00 PM ET tomorrow. It is named simply after the color of its cover and details economic conditions by Fed region. That information is relied upon heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any noticeable changes from the last update. More times than not though, this report will not influence the markets enough to cause intra-day changes to mortgage rates, but the potential to do so does exist.

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]

Thursdays bond market has opened well in negative territory as yesterday?s weakness carried into overnight and overseas trading. That negative momentum continued this morning after monetary policy moves by the European Central Bank (ECB) fell short of what traders were expecting. The stock markets are having a similar reaction to the news, pushing the Dow lower by 102 points and the Nasdaq down 25 points. The bond market is currently down 26/32 (2.26%), which will likely cause an increase in this morning?s mortgage rates of approximately .250 of a discount point.

Yesterday afternoons Fed Beige Book release didn?t reveal too many surprises. It pointed towards economic growth in most of the Fed regions with employment getting stronger. The bit of good news for bonds was noted softness in the manufacturing sector, but after Tuesday?s ISM index, this shouldn?t have caught too many people off guard. Overall, the report did nothing to alter the theory that the Fed will make its first rate hike at this month?s FOMC meeting. The impact this news had on mortgage pricing was minimal.

Last week?s unemployment numbers were released at 8:30 AM ET this morning, revealing 269,000 new claims for benefits. This was a slightly higher number than the 267,000 that was expected and a noticeable increase from the previous week?s 260,000 initial claims, indicating the employment sector softened last week. However, even though that is good news for bonds, this is only a weekly report preceding a major monthly employment release. Therefore, it has had little influence on this morning?s bond trading or mortgage rates.

October's Factory Orders report was posted at 10:00 AM ET. The Commerce Department announced that new orders for durable and non-durable goods rose 1.5% in October. This was a little stronger than the 1.1% that expected, making the data bad news for mortgage rates. Fortunately though, this report has not affected this morning?s trading or mortgage rates.

Fed Chair Yellen is currently speaking before a Joint Congressional Economic Committee in Washington D.C. Her words so far have not revealed any noticeable changes from previous comments and are very close to what she said yesterday. Her speech still has most analysts predicting an increase in key short-term interest rates during the December 15-16 FOMC meeting. It is worth noting though that tomorrow?s major economic report has the potential to alter those predictions.

Tomorrow morning brings us the release of the almighty monthly Employment report. This is arguably the most important monthly report we see, so its impact on the markets and mortgage rates is often significant. It is comprised of many statistics and readings, but the most watched ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate of 5.0% while 195,000 new jobs were added to the economy last month. The income reading is forecasted to show an increase of 0.2%. An ideal scenario for mortgage shoppers would be a higher unemployment rate, a much smaller increase in payrolls (or a decline) and no change in the earnings reading. If we are fortunate enough to hit the trifecta with all three, we should see bond prices rise and mortgage rates move much lower because it could delay the expected Fed rate increase. However, stronger than expected readings would likely fuel a bond sell-off that would lead to higher mortgage rates.

This report is always considered a key release, but extra attention will be given to this month?s Employment report because it is the last one before the FOMC meeting. If this report meets or exceeds expectations, it is highly likely that the Fed will make a move this month. On the other hand, weaker than expected numbers throws into question whether they will make that rate hike now or wait for the first 2016 meeting to do so. Any possibility of a delay in the rate hike should be taken as good news in 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... 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]

We could see Yellen raise the FED rate as early as next week. Although Yellens comments are not mentioned in the rate lock advisory, the majority of "professional" economists suggest she may raise the rate next week. If that happens, prepare for increasing rates. Please note, the market is quick to increase rates but very slow to reduce them. If you need financing, now is the time to get going. I would not wait to see if she raises rates...
Here is the daily rate lock advisory:

Fridays bond market has opened in positive territory despite a stronger than expected employment report. The stock markets are reacting favorably to the data with the Dow up 177 points and the Nasdaq up 37 points. The bond market is currently up 10/32 (2.28%), but due to heavy selling late yesterday we should still see an increase in this morning?s rates.

We saw widespread lender increases yesterday afternoon as bonds spiraled lower throughout the day with some issuing multiple revisions. Therefore, just how much of an increase you will see in this morning?s rates depends on how much of an intra-day move your lender made yesterday. The net difference between yesterday?s morning pricing and this morning?s rates should be approximately .125 of a discount point higher.

The Labor Department gave us today?s highly important data with the release of November?s Employment report. It revealed that the U.S. unemployment rate remained at 5.0% and that 211,000 new jobs were added to the economy last month. The unemployment rate matched forecasts but the payroll number was higher than the 195,000 that was expected. Although that?s not a huge variance from forecasts, upward revisions to October and November that totaled 35,000 make the number a little more negative for bonds. The average earnings reading showed no surprise with a 0.2% increase.

Today?s release can be considered bad news for bonds and mortgage rates. However, we should say "not that bad." What it does more than anything is practically guarantee a .25% increase to the Fed?s key short-term interest rate when they meet the week after next. This will be the first rate hike since 2006. Fortunately though, the markets appear to already have this priced in, which is logical. In other words, we are not seeing a sizable sell-off in bonds because the report wasn?t much stronger than thought and it did little to alter the general consensus on what the Fed will do later this month.

Next week has only a couple of relevant economic reports set for release along with two Treasury auctions that often indirectly influence mortgage rates. All of the week?s events take place the latter part. Look for details on next week?s calendar in Sunday evening?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...

 

[bk2drvr]

The inevitable rate hike(s) has got to have the mortgage industry on edge. I knew some people that were killing it during the boom and lost everything after the fall in 08'. Some of them went and found other careers but some have since returned to doing mortgage because they can't hack 9-5 after riding the high they once rode. Unless I'm way off base here I see doom and gloom ahead for them again. No phones ringing and nearly a complete dry up of the refi market as rates begin to correct upward. Everyone that could refi has refi'd. I would imagine the volume of new home purchases will decrease as well? Am I wrong?

 

[RaceTec]

I am also curious about the float recommendation on the closing between 21 - 60 days?

 

[Tamalewagon]

I am also curious about the float recommendation on the closing between 21 - 60 days?

Quite honestly, I would have suggested locking now and then floating after next weeks announcement if the boat has been missed. Better to be safe than sorry...

 

[Tamalewagon]

The inevitable rate hike(s) has got to have the mortgage industry on edge. I knew some people that were killing it during the boom and lost everything after the fall in 08'. Some of them went and found other careers but some have since returned to doing mortgage because they can't hack 9-5 after riding the high they once rode. Unless I'm way off base here I see doom and gloom ahead for them again. No phones ringing and nearly a complete dry up of the refi market as rates begin to correct upward. Everyone that could refi has refi'd. I would imagine the volume of new home purchases will decrease as well? Am I wrong?

I wouldn't suggest doom and gloom. I've been doing this the better part of 19 years and have made it through those times. People will always need financing. The most recent trends simply dictate a move toward purchase loans versus refinance. If you can't change with the business tides, yes you are doomed to fail.

 

[pronstar]

U.S. Employers Added 211,000 Jobs in November
Jobless rate remains 5%; report keeps Fed on track to raise interest rates this month

http://www.wsj.com/articles/u-s-employers-add-211-000-jobs-in-november-1449236053

 

[Tamalewagon]

U.S. Employers Added 211,000 Jobs in November
Jobless rate remains 5%; report keeps Fed on track to raise interest rates this month

http://www.wsj.com/articles/u-s-employers-add-211-000-jobs-in-november-1449236053

The jobs report is so ridiculously skewed it is not worth the paper it is printed on.

edit- If you, a family member or anyone is unemployed and has subsequently given up on finding a job -- if you are so hopelessly out of work that you've stopped looking over the past four weeks -- the Department of Labor doesn't count you as unemployed.

 

[Tamalewagon]

Tuesdays bond market has opened in positive territory following early stock weakness. The stock markets are in selling mode during early trading, pushing the Dow lower by 227 points and the Nasdaq down 49 points. The bond market is currently up 3/32 (2.22%), which should improve this morning?s mortgage rates slightly if comparing to Monday?s early pricing.

There is nothing scheduled for release today or tomorrow morning that is expected to affect mortgage rates. This makes it more like that stocks will drive bond trading during that time. If stocks continue to move lower, bonds should benefit. That would lead to a slight improvement in rates later today. On the other hand, if stocks rebound it is likely that mortgage rates will move a little higher.

The first events of the week we need to deal with are the Treasury auctions tomorrow and Thursday. Tomorrow's 10-year Note auction is the more important one and will likely have a bigger influence on mortgage rates. Results of the sales will be posted at 1:00 PM ET each day. If they are met with a strong demand from investors, particularly international buyers, we should see strength in the broader bond market and improvements to mortgage pricing during afternoon hours those days. On the other hand, a weak interest in the auctions could lead to upward revisions to mortgage rates.

We do have some important economic data ahead of us, but all of it comes Friday morning. We have three reports set for release Friday that include key consumer spending data and an important inflationary reading at the manufacturing level of the economy. Those reports paired for release at the same time can heavily influence the financial and mortgage markets. So, while it is a light and fairly calm week to date, be prepared for some volatility as the week ends.

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]

Thursdays bond market has opened down slightly with stocks up and no major data being released today. The major stock indexes are showing sizable gains of 123 points in the Dow and 22 points in the Nasdaq. The bond market is currently down 2/32 (2.22%), but we still should see a slight improvement in mortgage rates if comparing to Wednesday?s morning pricing due to gains late yesterday.

We saw some strength in bonds yesterday afternoon following the results of the 10-year Treasury Note auction. Several of the benchmarks we use to gauge investor demand showed a decent level of interest in the securities. That led to gains in the broader bond market and actually led to some lenders improving rates before the end of the day yesterday. Those results help us to remain optimistic about today?s 30-year Bond auction. If it is met with a fairly strong demand we could see the same events repeat themselves this afternoon. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

Today?s only data was last week?s unemployment figures at 8:30 AM ET. They revealed a jump in new claims for unemployment benefits, showing 282,000 initial claims were filed. This was higher than the 269,000 that was expected, indicating the employment sector was softer than many had thought last week. While any data showing weakening employment conditions is good news for bonds, this was only a weekly snapshot and wasn?t enough of a move to draw much attention or reaction in the bond or mortgage markets.

All three of this week?s monthly economic reports are being posted tomorrow morning. November's Retail Sales report is the first at 8:30 AM ET. This report will give us a key measurement of consumer spending by tracking sales at retail level establishments. This data is highly important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rapidly rising consumer spending raises the possibility of seeing solid economic growth. Since long-term securities such as mortgage bonds are usually more appealing to investors during weaker economic conditions, a large increase in retail sales will likely drive bond prices lower and mortgage rates higher tomorrow morning. Current forecasts are calling for an increase of 0.3% in November's sales.

The second report of the day will be November's Producer Price Index (PPI), also 8:30 AM. It measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices, giving a more stable reading for analysts to consider. If this release reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and drive mortgage rates higher. If we see in-line or weaker than expected numbers, the bond market should respond well and mortgage rates could fall. Current forecasts are showing a 0.1% increase in the overall index and a 0.1% decline in the core data.

The final report of the week is the release of December's preliminary reading to the University of Michigan's Index of Consumer Sentiment just before 10:00 AM ET. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly if it shows a sizable miss from forecasts. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up such a large part of our economy, any related data is watched closely. It is expected to show a reading of 91.6, which would be a decline from last month's final reading of 93.1. A larger decline in confidence would be considered good news for the bond market and mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

 

[Tamalewagon]

Fridays bond market has opened well in positive territory despite mixed results from this morning?s economic data. The stock markets are looking to close the week on a negative note with sizable losses in the major indexes. This is helping to boost bond prices during morning trading. The Dow is currently down 236 points while the Nasdaq has lost 71 points. The bond market is currently up 20/32 (2.16%), which should improve this morning?s mortgage rates by approximately .125 - .250 of a discount point.

Yesterdays 30-year Bond auction didn?t go as well as Wednesdays 10-year Note sale did. The indicators we use to gauge investor demand for the securities showed a mediocre or average level of interest. The bond market moved lower after results were posted, cause some lenders to revise rates higher late yesterday. Therefore, the amount of the improvement in this morning?s rates depends if your lender made that adjustment yesterday afternoon or waited for today to reflect it.

There were three pieces of economic data posted this morning, two of which are considered to be important to the markets. The first was November's Retail Sales report at 8:30 AM ET that showed retail-level sales rose 0.2% last month. This was slightly weaker than the 0.3% that was expected. However, a secondary reading that excludes more volatile and pricey auto transactions showed a 0.4% rise when analysts had forecasted 0.3%. That means we should consider the news neutral to slightly negative for bonds and mortgage rates.

Also posted early this morning was Novembers Producer Price Index (PPI). It revealed a 0.3% rise in both the overall and core readings. Those were much higher than expectations of a 0.1% decline and 0.1% increase. The readings indicate that inflationary pressures at the producer level of the economy were stronger than thought. Because inflation erodes the value of a bond?s future fixed interest payments, the bond market usually reacts negatively to such news. To the benefit of mortgage shoppers, this morning?s news has been ignored for the most part.

The final report of the week was Decembers preliminary reading to the University of Michigans Index of Consumer Sentiment just before 10:00 AM ET. It came in at 91.8 that slightly exceeded forecasts of 91.6 but was still a decline from Novembers 93.1. That means that surveyed consumers were less optimistic about their financial situations, so they are less likely to make a large purchase in the near future. We can consider this news good for mortgage rates.

Next week does not have a lot of economic data scheduled for release but we do have the last FOMC meeting of the year that is widely believed to bring the first Fed rate hike since 2006. The two-day FOMC meeting will also be followed by revised economic projections and a press conference with Fed Chair Yellen. There is nothing scheduled for Monday that is expected to affect mortgage rates. Look for details on next week?s events in Sunday evening?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... 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]

With Yellen raising the Fed rate most likely next week, mortgage rates will definitely follow on the upward trend. If you haven't done so, contact me or your mortgage guy now. Don't wait or savings will slip through your fingers.

http://www.bloomberg.com/news/artic...on-fed-s-gradual-rate-rise-path-after-liftoff

 

[Tamalewagon]

Mondays bond market has opened well in negative territory, erasing Fridays gains. The stock markets are showing relatively minor losses during early trading with the Dow down 29 points and the Nasdaq down 18 points. The bond market is currently down 15/32 (2.18%), which should cause this morning?s mortgage rates to be approximately .125 of a discount point higher than Friday?s morning pricing.

The bond market is giving back Fridays gains that came mostly during afternoon trading. Many lenders revised rates lower Friday afternoon as bonds improved. If your lender did make an intraday improvement Friday afternoon, you will likely see a larger increase in today?s rates. The net difference should be slightly higher rates than was posted Friday morning.

There is nothing of importance scheduled for today. Todays selling appears to simple preparation for this weeks Fed meeting. The rest of the week has four monthly economic reports scheduled for release in addition to some key Fed events that should significantly affect the financial and mortgage markets.

November's Consumer Price Index (CPI) will start the week?s activities at 8:30 AM ET tomorrow. It is similar to last Fridays Producer Price Index, except it tracks inflationary pressures at the important consumer level of the economy. Current forecasts show no change in the overall reading and an increase of 0.2% in the core data that excludes more volatile food and energy prices. This data is one of the most watched inflation indexes, which is extremely important to long-term securities such as mortgage related bonds. Rising inflation erodes the value of a bond's future fixed interest payments, making them less appealing to investors. That translates into falling bond prices and rising mortgage rates. Therefore, weak readings would be favorable for the bond market and mortgage shoppers.

Overall, Wednesday is the key day of the week due to the Fed schedule, but tomorrow could be a bit active also. It is highly probable that this will be a highly volatile week for the mortgage market, especially since the lightest day is already very active. Therefore, please 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... 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]

WEDNESDAY AFTERNOON UPDATE:
The FOMC meeting has adjourned with an announcement of a 0.25% increase to key short-term rates. This is the first rate hike since June 2006 but was widely expected by most analysts and market participants. The Fed also released their economic projections for next year, showing they expect overall economic growth to be slightly stronger than previously thought (+2.4% vs 2.3%). They also indicated that the national unemployment rate is likely to stand at 4.7% next year, just below the previous estimate of 4.8%.

It appears that further rate increases are expected but at a gradual pace rather than right after each other. Inflation is still below the Fed?s ideal rate of 2.0%, which is actually good news for bonds. In her press conference Fed Chair Yellen reiterated that future increases will come at a gradual pace and that economic conditions will be monitored closely before making another move. She also stated that the Fed is confident that inflation will strengthen in the future.

The markets have responded favorably to the news with stocks outgaining bonds. The major indexes are higher than they were pre-announcement. The Dow is currently up 126 points while the Nasdaq has gained 42 points. The bond market is currently down 3/32 (2.28%) compared to 9/32 (2.30%) at this morning?s posting time. This could be enough of a move for some lenders to improve rates slightly this afternoon, but I don?t see a drastic change coming before the end of the day unless something bizarre happens as we head into close.

Novembers Housing Starts report was posted at 8:30 AM ET this morning. The Commerce Department announced a 10.5% jump in new housing groundbreakings. This was stronger than what analysts were expecting to see, hinting at housing sector strength. The second report of the morning came at 9:15 AM ET when November's Industrial Production data was released. It revealed a 0.6% decline in output at U.S. factories, mines and utilities. Forecasts were calling for a 0.1% decline, indicating the manufacturing sector may be softer than many had thought. That makes the data good news for mortgage rates. However, neither report had much of an impact on this morning?s trading or mortgage pricing.

Tomorrow has two minor pieces of economic data scheduled for release. The first is the weekly unemployment update at 8:30 AM ET. They are expected to show that 276,000 new claims for unemployment benefits were filed last week, down from 282,000 of the previous week. Rising claims are an indication of a weakening employment sector, so the higher the number of initial filings the better the news it is for mortgage shoppers. Although, since this is only a weekly snapshot, it usually takes a wide variance from forecasts for it to influence mortgage rates.

The final economic release of the week be November?s Leading Economic Indicators (LEI) from the Conference Board late Thursday morning. This release attempts to measure or predict economic activity over the next three to six months. It is expected to show a 0.1% increase, meaning that it is predicting slight economic growth over the next several months. This probably will not have much influence on bond prices or affect mortgage rates unless it shows a much stronger reading than forecasts. The weaker the reading, the better the news it is for bonds and mortgage pricing.

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...

 

[Sbarry]

WEDNESDAY AFTERNOON UPDATE:
The FOMC meeting has adjourned with an announcement of a 0.25% increase to key short-term rates. This is the first rate hike since June 2006 but was widely expected by most analysts and market participants. The Fed also released their economic projections for next year, showing they expect overall economic growth to be slightly stronger than previously thought (+2.4% vs 2.3%). They also indicated that the national unemployment rate is likely to stand at 4.7% next year, just below the previous estimate of 4.8%.

It appears that further rate increases are expected but at a gradual pace rather than right after each other. Inflation is still below the Fed?s ideal rate of 2.0%, which is actually good news for bonds. In her press conference Fed Chair Yellen reiterated that future increases will come at a gradual pace and that economic conditions will be monitored closely before making another move. She also stated that the Fed is confident that inflation will strengthen in the future.

The markets have responded favorably to the news with stocks outgaining bonds. The major indexes are higher than they were pre-announcement. The Dow is currently up 126 points while the Nasdaq has gained 42 points. The bond market is currently down 3/32 (2.28%) compared to 9/32 (2.30%) at this morning?s posting time. This could be enough of a move for some lenders to improve rates slightly this afternoon, but I don?t see a drastic change coming before the end of the day unless something bizarre happens as we head into close.

Novembers Housing Starts report was posted at 8:30 AM ET this morning. The Commerce Department announced a 10.5% jump in new housing groundbreakings. This was stronger than what analysts were expecting to see, hinting at housing sector strength. The second report of the morning came at 9:15 AM ET when November's Industrial Production data was released. It revealed a 0.6% decline in output at U.S. factories, mines and utilities. Forecasts were calling for a 0.1% decline, indicating the manufacturing sector may be softer than many had thought. That makes the data good news for mortgage rates. However, neither report had much of an impact on this morning?s trading or mortgage pricing.

Tomorrow has two minor pieces of economic data scheduled for release. The first is the weekly unemployment update at 8:30 AM ET. They are expected to show that 276,000 new claims for unemployment benefits were filed last week, down from 282,000 of the previous week. Rising claims are an indication of a weakening employment sector, so the higher the number of initial filings the better the news it is for mortgage shoppers. Although, since this is only a weekly snapshot, it usually takes a wide variance from forecasts for it to influence mortgage rates.

The final economic release of the week be November?s Leading Economic Indicators (LEI) from the Conference Board late Thursday morning. This release attempts to measure or predict economic activity over the next three to six months. It is expected to show a 0.1% increase, meaning that it is predicting slight economic growth over the next several months. This probably will not have much influence on bond prices or affect mortgage rates unless it shows a much stronger reading than forecasts. The weaker the reading, the better the news it is for bonds and mortgage pricing.

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...

Question since I really don't know... Why would you float, if it's said that rates are going to be rising? Thanks in advance [emoji106]&#127996;

 

[Tamalewagon]

Question since I really don't know... Why would you float, if it's said that rates are going to be rising? Thanks in advance [emoji106]&#62460;

That is just Daily Mortgage Reports advice. I always preach safety first.

 

[Tamalewagon]

Thursdays bond market has opened in positive territory even though this mornings economic data did not give us favorable results. The stock markets are showing early losses with the Dow down 54 points and the Nasdaq down 1 point. The bond market is currently up 12/32 (2.25%), which with yesterday?s post-FOMC move should improve this morning?s mortgage rates by approximately .250 of a discount point if comparing to Wednesdays morning pricing.

Both of this mornings economic releases gave us news that was negative for bonds and mortgage rates, but fortunately neither is considered to be important or highly influential on the markets. The first was last weeks unemployment update at 8:30 AM ET. It showed that 271,000 new claims for unemployment benefits were filed last week, down from the previous week?s 282,000 initial filings. Analysts were expecting to see 276,000 claims. Because the number was lower than expected and declining initial claims hints at a strengthening employment sector, we need to consider this bad news for mortgage rates.

The second report of the morning and the final economic release of the week was November?s Leading Economic Indicators (LEI) at 10:00 AM ET. The Conference Board announced an increase of 0.4% that means the indicators are predicting a stronger rate of economic growth over the next several months than many had thought. Since bonds tend to thrive in weaker economic conditions, this report is also negative for bonds and mortgage rates.

Tomorrow has no relevant data or other events scheduled that are expected to affect mortgage rates. There is a lunch time speaking engagement by Fed member Jeffrey Lacker that could cause some movement in the markets if he says anything surprising. Especially following yesterday?s FOMC events. With exception to that, we could see a fairly calm day in 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...

 

[Tamalewagon]

Wednesday?s bond market has opened in negative territory due to early gains in stocks and stronger than expected economic news. The major stock indexes are showing noticeable improvements with the Dow up 89 points and the Nasdaq up 25 points. The bond market is currently down 9/32 (2.26%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point.

This morning had two economic reports released at 8:30 AM ET and two during late morning trading. The first and most important of the four was Novembers Durable Goods Orders that showed no change from Octobers level. This indicates flat manufacturing activity, at least in big-ticket products. Analysts were expecting to see a decline of 0.7%, so the flat reading means new orders were stronger than expected. However, that size of a variance is not nearly as relevant in this data as it is in most of the other reports we see. That is because this data is known to be quite volatile from month to month. Still, the results are technically bad news for the bond and mortgage markets since they show stronger than expected economic activity.

Novembers Personal Income and Outlays data was the second release. It revealed 0.3% increases in both the income and spending readings. Those pegged forecasts, making them neutral to slightly negative for mortgage pricing. The increase in income means consumers had more money to spend than they did last month and the rise in spending shows that they did spend it. Because consumer spending makes up over two-thirds of the U.S. economy, any related data is relevant to the markets.

The third release of the morning was the revised University of Michigan Index of Consumer Sentiment for December just before 10:00 AM ET. It came in at 92.6, which was an upward revision from the preliminary reading of 91.8 and a little higher than the 92.0 that was expected. The higher reading means surveyed consumers were more optimistic about their own financial situations than previously thought and are more likely to make a large purchase in the near future. Accordingly, we should also consider this bad news for the bond market and mortgage rates.

Novembers New Home Sales data was the final monthly economic report of the day and this week. This report gives us another measurement of housing sector strength and mortgage credit demand. It showed a 4.2% increase in sales of newly constructed homes, exceeding expectations of a 2.0% rise. Even though that would appear to be bad news for mortgage rates, the number of sales is offsetting that larger increase. A sizable downward revision to the number of October sales puts November?s sales to a lower level than Octobers were previously thought to be. This allows us to label this report as neutral rather than negative for the mortgage market.

Tomorrows only data is last weeks unemployment update. It will give us a small snapshot of the employment sector and is expected to show that 271,000 new claims for unemployment benefits were filed last week. The higher the number of claims, the better the news it is because rising claims hints at a softening labor market. However, since this is only a weekly report, it likely will not have much of an impact on mortgage rates unless it shows a significant variance from forecasts.

The markets will be closing early tomorrow and remain closed Friday in observance of the Christmas Day holiday. Stocks will close at 1:00 PM while bonds will close at 2:00 PM ET. These holidays sometimes cause a little additional volatility as investors look to protect themselves over the long weekend. We should see very thin or light trading as many traders will be home for the holiday already. Therefore, we shouldn?t be too concerned about any bond losses or excited about gains that come during tomorrow?s shortened session.

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]

Week two of the year-end holiday season has only one monthly economic report scheduled for release that is relevant to mortgage rates in addition to a couple of potentially influential Treasury auctions. There is nothing of importance tomorrow, but we still may see some movement in the markets and mortgage pricing as traders return from the extended holiday weekend.

The Conference Board will post their Consumer Confidence Index (CCI) for December late Tuesday morning. This is a fairly important release because it measures consumer willingness to spend. If consumers are more confident about their personal financial and employment situations, they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely by market participants and can affect mortgage rate direction. Current forecasts are calling for an increase in confidence from November's reading of 90.4. Analysts are expecting Tuesday's release to show a reading of 93.5, meaning consumers felt much better about their own financial situation than they did in November. The lower the reading, the better the news it is for bonds and mortgage pricing.

We also have Treasury auctions scheduled the first three days of the week. The two that are most likely to influence mortgage rates are Tuesday's 5-year and Wednesday's 7-year Note sales. If those sales are met with a strong demand, bond prices may rise enough to lead to improvements in mortgage rates shortly after the results are posted. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates Tuesday and/or Wednesday. Results will be announced at 1:00 PM each day, so any reaction will come during early afternoon trading.

The bond market will close at 2:00 PM ET Thursday ahead of the New Year's Day holiday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed Friday for the holiday and will reopen Monday morning for regular hours. As a result of the holiday schedule, we should see another round of lighter than normal trading a couple days. Therefore, don?t be surprised to see larger moves in bonds with little apparent reason. I would be more concerned with bond losses early in the week than any that may come later in the week.

Overall, I am expecting to see Tuesday be the most active day for mortgage rates, although I don?t see much to be worried about in this week?s calendar. It is difficult to label any day as the calmest because even tomorrow that doesn't have anything scheduled to be posted could also be relatively busy following last week's light holiday trading. Accordingly, please 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]

Wednesdays bond market has opened down slightly, extending yesterday?s afternoon selling. The stock markets are showing relatively minor losses with the Dow down 32 points and the Nasdaq down 16 points. The bond market is currently down 2/32 (2.31%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point.

We saw bonds turn south yesterday afternoon around the time the 5-year Treasury Note auction results were posted. It seemed like a bigger move than just a 5-year Note sale would justify, but the timing makes it appear directly connected. The sale did not go very well in terms of investor demand for the securities. That led to broader selling in the bond market and caused many lenders to revise rates higher during afternoon trading. If your lender did make an upward revision late Tuesday, you likely will see little change in this morning?s pricing.

There is no relevant economic data scheduled for release today. The only event that may influence bond trading and mortgage rates is the 7-year Treasury Note auction. After yesterday?s lackluster 5-year Note sale, we don?t have much to be optimistic about in today?s auction. If today?s sale also draws weak interest, we may see another round of afternoon pressure in bonds later today. However, I don?t believe it will be as noticeable as yesterday?s was. Ideally, we would like to see a strong demand from investors that could lead to an afternoon improvement in rates. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

Last weeks unemployment figures will be tomorrow?s only data, scheduled to be posted at 8:30 AM ET. They are expected to show that 270,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week?s 267,000 initial filings. The larger the number of new claims, the better the news it is for bonds and mortgage rates because rising claims hint at a softening employment sector.

Also worth noting is the fact the bond market will close at 2:00 PM ET tomorrow ahead of the New Year's Day holiday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed Friday for the holiday and will reopen Monday morning for regular hours.

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...