Mortgage Market Update/Purchase and Refinance Mortgage info

Tamalewagon · Dec 31, 2015

Happy New Years campers...

Thursdays bond market has opened in positive territory following weaker than expected economic news. The stock markets appear to be ready to wrap the year up on a negative note with the Dow down 102 points and the Nasdaq down 33 points. The bond market is currently up 10/32 (2.27%), which should improve this morning?s mortgage rates by approximately .250 of a discount point over Wednesdays early rates.

Yesterdays 7-year Treasury Note auction did not go very well, following suit of Tuesdays 5-year Note sale. However, unlike Tuesday afternoon, bonds managed to gain ground after results were posted instead of selling off. This led to an afternoon rate improvement by some lenders. If your lender did revise rates a little lower yesterday afternoon, you should see less change in this mornings pricing.

Today did have a piece of minor economic data released. At 8:30 AM ET the Labor Department announced that 287,000 new claims for unemployment benefits were filed last week. This was a noticeable increase from the previous week?s 267,000 initial claims and higher than the 270,000 that was predicted. That increase indicates the employment sector weakened last week, making the data good news for bonds and mortgage rates.

The bond market will close at 2:00 PM ET today ahead of tomorrows New Year's Day holiday, so if there is an intra-day change to mortgage rates it will likely come during early afternoon trading. The stock markets are scheduled to be open for a full day of trading today. All banks and major U.S. financial markets will be closed tomorrow for the holiday and will reopen Monday morning for regular hours.

We would like to take this opportunity to wish everyone a safe holiday and a wonderful New Year!

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 · Jan 4, 2016

Rates are down. I would lock.

Mondays bond market has opened the new year in positive territory, caused by a couple of events. The stock markets are one of those reasons with the major indexes showing significant losses during early trading following weaker economic data from overseas. The Dow is currently down 388 points while the Nasdaq has lost 142 points. The bond market is currently up 14/32 (2.21%), which should improve this mornings mortgage rates by approximately .250 of a discount point from Thursdays levels. The financial and mortgage markets were closed Friday due to the holiday.

Todays only economic data was a highly important report that gave us favorable results and is contributing to this mornings bonds gains. The Institute for Supply Management (ISM) posted their manufacturing index for December at 10:00 AM ET this morning, showing a reading of 48.2. This was lower than the 49.0 that expected and a decline from November?s 48.6, meaning that manufacturer sentiment slipped last month when it was expected to rise slightly. That raises more concern about the manufacturing sector of the economy and could alter the Fed?s plans for raising short-term interest rates if it continues on this track.

There is nothing of importance scheduled for tomorrow but the rest of the week brings us the release of three more monthly economic reports in addition to the minutes from the last FOMC meeting that have the potential to influence the bond market and quite possibly mortgage rates.

Overall, Friday is the key day of the week with the almighty monthly Employment report being posted, but Wednesday also has a decent chance of being pretty active. The least active day will likely end up being tomorrow assuming that stocks remain calm. Please still keep an eye on the markets and maintain contact with your mortgage professional if still floating an interest rate as a couple of this weeks events have the potential to cause severe market volatility.

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 · Jan 5, 2016

Tuesdays bond market has opened down slightly with nothing of importance scheduled for release today. Stocks are showing minor losses but after yesterdays stock sell-off this is likely somewhat welcomed news for stock investors. The Dow is currently down 15 points while the Nasdaq has slipped 3 points. The bond market is currently down 2/32 (2.25%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point. A good part of that increase is coming from yesterdays afternoon trading when bonds gave back some of their morning?s gains before closing. That move coincided with a rebound in stocks that closed well above their lowest point from earlier in the day.

There is nothing of relevance scheduled for today, but tomorrow has three items that can affect rates. The first of them is the ADP Employment report at 8:15 AM ET. This report has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. It tracks changes in private-sector jobs of the company'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 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 our calendar. Forecasts are calling for an increase of 190,000 new payrolls. Good news for mortgage rates would be a much smaller increase in payrolls.

The Commerce Department will post November's Factory Orders data at 10:00 AM ET tomorrow morning. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted just before Christmas, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as appliances, electronics and airplanes. Examples of non-durable goods are food and clothing. Analysts are expecting to see a decline of 0.2% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates if it shows a sizable variance from forecasts. The larger the decline, the better the news it is for mortgage pricing.

Also tomorrow is the release of the minutes from the last FOMC meeting. They will give market participants insight to the Feds thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they won't affect the markets or mortgage rates until afternoon hours. The last FOMC meeting was followed by revised Fed forecasts and a press conference by Fed Chair Janet Yellen, so the possibility of seeing something unexpected is minimal. Still, market participants will be looking for any tidbits about the decision to raise key short-term interest rates and when the next move may be made.

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 · Jan 5, 2016

http://www.mortgagenewsdaily.com/01042016_interest_rate_freddie_mac.asp

Tamalewagon · Jan 6, 2016

Wednesdays bond market has opened in positive territory despite unfavorable economic news. Another round of heavy stock selling is helping to boost bonds during early trading. The Dow is now down 226 points while the Nasdaq has lost 51 points. The bond market is currently up 13/32 (2.19%), which should improve this mornings mortgage rates by approximately .125 -.250 of a discount point.

The ADP Employment report for December at 8:15 AM ET kicked off todays fairly busy schedule. It showed that 257,000 new private sector jobs were added last month, greatly exceeding forecasts of 190,000. This is clearly bad news for the bond market and mortgage rates because by theory, that number indicates the monthly report later this week is likely to show stronger numbers also. Fortunately, stock losses and concerns about geopolitical and financial issues have allowed the markets to ignore the data.

Also posted this morning was Novembers Factory Orders report. The Commerce Department announced at 10:00 AM ET that new orders for durable and non-durable goods slipped 0.2% in November. That matched forecasts, so it has had no impact on todays bond trading or mortgage pricing.

We also have the minutes from the last FOMC meeting to deal with this afternoon. They will give market participants insight to the Fed's thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so if there is a reaction it will come during mid-afternoon trading. The last FOMC meeting was followed by revised Fed forecasts and a press conference by Fed Chair Janet Yellen, so the possibility of seeing something unexpected is minimal. Still, market participants will be looking for any tidbits about the decision to raise key short-term interest rates and when the next move may be made.

Tomorrow has only a single minor piece of data scheduled for release. At 8:30 AM ET we will get last weeks unemployment numbers. They are expected to show that 270,000 new claims for unemployment benefits were filed last week. The previous week had 287,000 initial claims, so analysts are expecting to see a decent decline. Ideally, we would like to see a sizable increase in new claims, indicating employment sector softness. The higher the number of new claims, the better the news it is for mortgage rates. However, since this is only a weekly report, it usually takes a wide variance from forecasts for this data to affect 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...

Tamalewagon · Jan 6, 2016

http://www.mortgagenewsdaily.com/consumer_rates/551372.aspx

Tamalewagon · Jan 7, 2016

Rates are down a little this morning.

Thursdays bond market has opened flat as investors prepare for tomorrows major economic news. The stock markets are in selling mode yet again with the Dow down 236 points and the Nasdaq down 99 points. The bond market is currently up only 1/32 (2.16%), but due to strength late yesterday we should see an improvement in this morning?s mortgage rates of approximately .125 of a discount point.

Yesterdays afternoon release of the FOMC minutes did give us some interesting insight into the Feds thought process about raising short-term rates. While there wasnt much dissent among voting members about raising rates last month for the first time since 2006, there appears to be some concern about future increases. Besides global economic conditions, there also was much discussion about the inflation rate that remains stubbornly low. The minutes indicate that unless inflation gains momentum, more rate moves by the Fed may not be agreed upon nearly as much as Decembers increase was. That certainly threatens the 2-3 more increases this year that many analysts had been predicting.

Todays only economic data was last week?s unemployment numbers at 8:30 AM ET. They revealed that 277,000 new claims for unemployment benefits were filed last week, down from the previous weeks 287,000 initial claims. However, this was still higher than the 270,000 that was forecasted. Therefore, we can consider the news neutral for bonds and mortgage rates.

Tomorrow morning brings us the release of the almighty monthly Employment report. The Labor Department will post December's employment figures at 8:30 AM ET tomorrow. This report is arguably the single most important monthly release we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a decline in payrolls and flat earnings would be ideal news for the bond market. Current forecasts call for no change in the unemployment rate of 5.0% while 200,000 new jobs added to the economy and an increase in earnings of 0.2%. If we see weaker than expected results, the bond market should rally and stocks should fall, improving mortgage rates noticeably tomorrow. However, stronger than expected readings will likely raise optimism about the economy, pushing stocks and mortgage rates sharply higher.

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 · Jan 7, 2016

This recent dip in rates won't be around for too much longer. Mortgage rates react with bond pricing (among other factors).

http://www.mortgagenewsdaily.com/mortgage_rates/blog/552285.aspx

Tamalewagon · Jan 7, 2016

Lock in now! Stock sell-off sinks mortgage rates

Diana Olick | @DianaOlick
5 Hours Ago
CNBC.com

You may be losing your shirt in the stock market this week, but you could get a leg up on your home loan. As investors flee stocks, they are heading to bonds, and as a result, mortgage interest rates are falling. Mortgage rates ended 2015 at their highest level in nearly six months, but have since dropped precipitously.

"Bond markets continue defying the odds so far in 2016," wrote Matthew Graham, chief operating officer of Mortgage News Daily.

Falling mortgage rates

When stocks sell off, investors historically head to the bond market because it is considered a safer investment. Higher demand means lower yields. Lenders price according to the yields on mortgage-backed bonds, which generally follow the 10-year Treasury.

Mortgage rates do not follow the Federal Reserve funds rate, but most expected that as the Fed raised rates, mortgage rates would rise as well. This has more to do with an improving economy, which would be behind both.

"Given the Fed rate hike and strong ADP data yesterday ? among other reasonably decent economic anecdotes ? we would be more justified in expecting bonds to be under pressure at the start of the year," added Graham, calling the drop in rates, "a pleasant surprise."

Read More ? Mortgage applications plunge after earlier rate-hike rush

The average rate on the popular 30-year fixed mortgage is now just below 4 percent for the most credit-worthy borrowers. Applications to refinance a loan had dropped dramatically in the last two weeks of 2015 amid higher interest rates, but this move lower could create a new opportunity for thousands of borrowers who have yet to refinance at a lower rate.

There are not many regular borrowers who would benefit from the current rates, given the refinance boom of the last three years, when rates were hovering around record lows. There are, however, nearly 430,000 borrowers who could still benefit from the government's HARP refinance program, according to the Federal Housing Finance Agency. This is for borrowers who still owe more on their mortgages than their homes are worth, commonly known as "underwater." Their loans must be government-backed. Why so many still?

"They may be in a good financial position, able to make their monthly payments and don't want to mess with it," said Andrew Wilson, Fannie Mae's chief spokesman. "There are always some number of people that just never do, and the question is why not?"

Tamalewagon · Jan 8, 2016

http://www.mortgagenewsdaily.com/consumer_rates/552543.aspx

Tamalewagon · Jan 8, 2016

Fridays bond market has opened down slightly even though we saw a much stronger than expected payroll number in todays Employment report. The stock markets are reacting favorably to the data, but also with somewhat of a muted response if you take into consideration this weeks heavy selling. The Dow is currently up 73 points while the Nasdaq has gained 44 points. The bond market is currently down 4/32 (2.16%), but due to strength late yesterday we should see an improvement in this morning?s mortgage rates of approximately .125 of a discount point if comparing to Thursdays morning pricing.

Todays major economic news was Decembers Employment report at 8:30 AM ET. It showed that the unemployment rate remained at 5.0% last month as it was expected to do. The big surprise came in the payroll number that showed 292,000 new jobs were added to the economy, greatly exceeding forecasts of 200,000. There were upward revisions to October and November?s payrolls also that totaled 50,000 more jobs than previously thought. Those numbers make the report bad news for the bond and mortgage markets because the strengthening labor market indicates economic growth and makes additional Fed rate hikes in the immediate future more likely.

There was a bit of favorable news in the data though. That came in the average hourly earnings figure that showed wage growth was flat in the month when analysts were expecting to see a 0.2% increase. This number is good for bonds because rising wages translates into wage inflation that spreads to other parts of the economy. Since inflation erodes the value of a bonds future fixed interest payments, making the securities less appealing to investors, bonds tend to thrive in low inflationary times. Overall, the report is clearly negative for mortgage rates, but the earnings figure is helping to soften the impact on this mornings mortgage rates.

Next week has a handful of relevant economic reports scheduled for release in addition to a couple of Treasury auctions that may affect mortgage pricing. Two of the reports do carry a high significance in the markets. None of the weeks events are set for Monday or Tuesday, so expect to see this afternoons trading and any weekend news to influence the start of the week. Look for details on next 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 · Jan 11, 2016

Mondays bond market has opened in negative territory, erasing gains from late Friday. The stock markets are starting the new week with minor gains of 41 points in the Dow and 3 points in the Nasdaq. The bond market is currently down 14/32 (2.16%), but due to strength late Friday we should see this morning?s mortgage rates be very close to Friday?s morning pricing.

There is nothing of importance set for release today or tomorrow. The rest of the week has five economic reports that are relevant to the bond market and mortgage pricing, some of which is considered to be highly important to the markets. In addition to the data, there are two Treasury auctions that we need to watch mid-week.

The Treasury auctions are the first things we are expecting to affect mortgage rates. Wednesdays 10 year Note sale and Thursdays 30-year Bonds auction are the two that are likely to influence rates. Wednesdays sale is the more important of the two. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates. Results will be posted at 1:00 PM ET each day, so any reaction will come during early afternoon trading.

The first economic report of the week will be the Federal Reserves Beige Book Wednesday at 2:00 PM ET. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises, particularly regarding inflation, unemployment or future hiring. Any reaction to the report though will come during afternoon trading.

Overall, I see Friday as the key day of the week with four pieces of economic data scheduled but Wednesday afternoon is also worthy of plenty of attention. On paper, we can expect to see the most movement in rates Friday, but the truth is that there is a decent chance of seeing noticeable changes in mortgage rates multiple days this week. Therefore, please 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... 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 · Jan 12, 2016

Tuesday?s bond market has opened in positive territory despite early gains in stocks and no relevant economic data being posted. The Dow is currently up 51 points while the Nasdaq is up 41 points. The bond market is currently up 7/32 (2.15%), but due to weakness in trading late yesterday, we will likely still see a slight increase in this morning?s rates if comparing to Monday?s morning pricing.

There is nothing of importance set for release today that deserves our attention. Watch for stocks to affect bond trading and be the cause if we get an intraday revision to rates today. If the major indexes extend this morning?s gains, I would not be surprised to see bonds come under pressure. On the other hand, if stocks fall from current levels, bonds should benefit.

Tomorrow morning also has nothing of importance scheduled. However, the afternoon brings us two events that we need to watch. Tomorrow?s 10 year Treasury Note sale and Thursday?s 30-year Bond auction have the potential to influence rates. Tomorrow?s sale is the more important of the two. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates. Results will be posted at 1:00 PM ET each day, so any reaction will come during early afternoon trading.

The first economic report of the week will be the Federal Reserve's Beige Book at 2:00 PM ET tomorrow. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises, particularly regarding inflation, unemployment or future hiring. Any reaction to the report though will also come during mid-afternoon afternoon trading.

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 · Jan 13, 2016

Wednesday?s bond market has opened down slightly with stocks relatively calm and nothing of importance being posted this morning. The Dow is currently down 8 points while the Nasdaq has lost 14 points. The bond market is currently down 3/32 (2.11%), which should keep this morning?s mortgage rates at yesterday?s levels.

Today has two events worth watching but both come during afternoon trading. The first is the 10 year Treasury Note sale. It has the potential to influence rates. If these type of sales are met with a strong demand from investors, the broader bond market tends to improve after results are posted. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to bond selling. The selling in bonds would result in upward revisions to mortgage rates. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading. We will repeat this process tomorrow with the 30-year Bond auction.

The first economic report of the week will be the Federal Reserve's Beige Book at 2:00 PM ET today. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises, particularly regarding inflation, unemployment or future hiring. Any reaction to the report though will also come during mid-afternoon trading.

Tomorrow?s only data is last week?s unemployment update. It will give us a small snapshot of the employment sector and is expected to show that 275,000 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.

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 · Jan 14, 2016

Thursdays bond market has opened in positive territory, extending yesterdays afternoon rally. The stock markets are much calmer than they were yesterday with the Dow up 7 points and the Nasdaq down 23 points. The bond market is currently up 6/32 (2.07%), which should improve this morning?s mortgage rates by approximately .125 of a discount point over yesterday?s morning pricing.

Yesterdays afternoon events helped boost bond prices and led to many lenders improving rates. The 10-year Treasury Note auction went very well with many benchmarks showing a decent level of investor interest in the securities. That helps us to remain optimistic about today?s 30-year Bond sale. If it also has a strong level of demand, we could see bonds improve again during afternoon trading today. Results will be posted at 1:00 PM ET, so any reaction will come shortly after.

The Federal Reserve posted their Beige Book at 2:00 PM ET today. It did not reveal any significant surprises but indicated modest or moderate economic growth through the country. The afternoon buying in bonds was more a result of the stock sell-off than this report as investors sought safety.

Todays only economic data was last weeks unemployment figures that showed that 284,000 new claims for unemployment benefits were filed last week. This was higher than the 275,000 that was expected and an increase from the previous week?s 277,000 new claims. That indicates the employment sector softened a little last week, making the data good news for bonds and mortgage rates. Unfortunately, this is only a weekly report and has had minimal influence on today?s rates.

Tomorrow has the remaining four reports set for release that has the potential to affect mortgage rates. The first is Decembers Retail Sales data at 8:30 AM ET. This Commerce Department report measures consumer spending by tracking sales at U.S. retail level establishments. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely. Rising consumer sales fuels expectations for broader economic growth that makes long-term bonds less attractive to investors. Current forecasts are calling for a 0.1% increase December's sales. A decline in sales would be good news for bonds and mortgage rates because it would hint at weaker than thought economic growth.

The second report of the day is Decembers Producer Price Index (PPI) at 8:30 AM ET. The PPI is important to the markets and mortgage rates because it measures inflationary pressures at the producer level of the economy. Analysts are expecting to see a 0.1% decline in the overall reading and a 0.1% increase in the more important core reading that excludes volatile food and energy prices. A larger than expected increase in the core reading could mean higher mortgage rates Friday since strengthening inflation is bad news for the bond market. It erodes the value of a bonds future fixed interest payments, making them less attractive to investors. Accordingly, they are sold at a discount to offset the drop in value, which drives their yields higher. And since mortgage rates follow bond yields, rising inflation usually translates into higher interest rates for borrowers.

Next up is Decembers Industrial Production report with a release time of 9:15 AM ET. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength or weakness. Current forecasts are calling for a decline in production of 0.2% from November's level. A weaker reading would be considered good news for bonds and could help lower mortgage rates as it would point towards a manufacturing sector that was softer than many had thought. However, the 8:30 AM reports are much more important to the markets than this data is and will likely have a heavier influence on mortgage rates.

The final report of the week is Januarys preliminary reading to the University of Michigans Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to slightly change mortgage rates. If consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future, fueling economic growth. Good news would be a reading weaker than Decembers 92.6 that means consumers felt less confident this month and likely will avoid making a large purchase in the immediate 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 · Jan 14, 2016

by: Matthew Graham - writer for Mortgage News Daily

Mortgage Rates Hold 2-Month Lows

Jan 13 2016, 4:57PM

Mortgage rates held their ground today, keeping them near the lowest levels in more than 2 months. There were no major economic reports, but financial markets were highly active nonetheless. In particular, it was the worst day of the year for many major equities indices, including the S&P 500. In fact, it was the worst day of selling since late August. As we've seen on several recent occasions, the selling in stock markets proved beneficial to bond markets. When bonds (a broad term that includes mortgage-backed-securities) improve, interest rates fall.

Stocks and bonds have an assumed relationship that doesn't always hold true. The thesis is that investors buy bonds when they sell stocks and vice versa, thus leading interest rates to move in the same direction as stocks. To be sure, there is never a guarantee that this correlation will hold true on any given day, but chances improve on these days where stocks are really getting hit hard. Today was no exception, but because it began with bond markets in weaker territory (implies higher rates), the improvement seen throughout the day was only enough to get most lenders back in line with yesterday's rates.

Tamalewagon · Jan 15, 2016

Fridays bond market has opened well in positive territory following mostly favorable economic news and a sizable sell-off in stocks again. The selling in stocks is creating a flight-to-safety move into bonds as investors try to avoid the volatility. This has pushed the Dow down by 346 points while the Nasdaq has lost 112 points. The bond market is currently up 17/32 (2.03%), which should improve this morning?s mortgage rates by approximately .250 of a discount point if comparing to Thursday?s morning pricing.

The first of this mornings four economic reports was December's Retail Sales data at 8:30 AM ET. The Commerce Department announced a 0.1% decline in retail-level sales last month, falling short of the 0.1% increase that was expected. Even a secondary reading that excludes more volatile and expensive auto sales was weaker than predicted (-0.1% vs +0.3%). Those readings mean consumers did not spend as much as many analysts were expecting. Since consumer spending makes up over two-thirds of our economy, this is a sign that overall economic growth may not be as strong as many had thought. That makes bonds more attractive to investors and helps keeps mortgage rates lower.

Also at 8:30 AM was December's Producer Price Index (PPI). It showed a 0.2% decline in the overall reading and a 0.1% increase in the core data. The overall reading was a little weaker than expected but the core reading matched forecasts. Therefore we can consider the data neutral to slightly favorable for bonds and mortgage rates.

Decembers Industrial Production report was posted at 9:15 AM ET, revealing a 0.4% decline in output at U.S. factories, mines and utilities. That was a larger decline than the 0.2% that was expected, hinting that manufacturing activity may be softer than predicted. Because softening manufacturing activity is a sign if a slowing economy, we should also consider this data good news for mortgage shoppers.

The final report of the week came just before 10:00 AM ET when January's preliminary reading to the University of Michigans Index of Consumer Sentiment was released. This was the sole bad news in todays batch of releases. It showed a reading of 93.3 that exceeded forecasts of 92.6 and was an increase from Decembers reading. The increase indicates surveyed consumers were more optimistic about their own financial and employment situations than they were last month. Because rising confidence usually means consumers are more apt to spend, the rise is considered counterproductive to lower mortgage rates.

Next week is a holiday-shortened week due to Mondays Martin Luther King Jr. Day. All financial and mortgage markets will be closed for the holiday and reopen Tuesday morning. There is no data set for release Tuesday either, leaving all of the week?s releases to come over three days. 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... 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 · Jan 15, 2016

http://www.mortgagenewsdaily.com/consumer_rates/555463.aspx

Tamalewagon · Jan 19, 2016

Good News - Rates are down again this morning on the 30 year fixed products.

(Sort of) Bad News - http://www.mortgagenewsdaily.com/01142016_fannie_mae_forecast.asp Rates actually fell after the last rate hike from the Fed. With oil prices dropping and the stock market volatility it is a crap shoot with the next Fed rate hike likely to hit in March (click on article above). Place your bets?

Tamalewagon · Jan 20, 2016

Tuesdays bond market has opened in negative territory with stocks posting solid gains following economic news from overseas that was favorable to stocks. The Dow is starting the week with a 138 point gain while the Nasdaq is up 37 points. The bond market is currently down 5/32 (2.05%) which should push this morning?s mortgage rates higher by approximately .125 of a discount point from Friday?s morning levels. The financial and mortgage markets were closed yesterday for the Martin Luther King Jr. holiday.

There is nothing of importance scheduled for release today, leaving bonds to be driven by stock movement. The rest of the week brings us the release of four pieces of monthly economic data for the markets to digest, with one of them considered to be highly important for mortgage rates. Because the markets were closed yesterday and today has nothing set that is worth watching, all of this weeks relevant releases come over only three days.

The first data of the week is December's Consumer Price Index (CPI) at 8:30 AM tomorrow. This is one of the more important monthly reports for the bond market each month since it measures inflationary pressures at the consumer level of the economy. As with last week?s Producer Price Index (PPI), there are two readings in the release. The overall index is expected to remain unchanged from November?s reading while the core data rose 0.2%. Weaker than expected readings would be favorable news and should lead to bond strength and lower mortgage rates tomorrow morning.

Decembers Housing Starts will also be posted early tomorrow morning. It helps us measure housing sector strength and future mortgage credit demand by tracking construction starts of new homes. It is not considered to be one of the more important releases each month, so I don't see it causing much movement in mortgage rates but does carry the potential to affect trading and rates if it shows a significant surprise. Analysts are expecting to see an increase in new home starts between November and December.

Overall, despite a relatively light week in terms of the number of economic reports scheduled, we still may see a very active week in the markets and mortgage pricing. In addition to our data there are also some key pieces of foreign economic data being released that can be highly influential and the volatility in our stocks markets will also play into this week?s bond trading and mortgage rates. This means there is a strong possibility of seeing intraday revisions to mortgage rates more than one day. Therefore, please maintain contact with your mortgage professional and proceed cautiously if still floating an interest rate and closing in the near future.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... 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 · Jan 20, 2016

Wow what a start!

Wednesdays bond market has opened up sharply following favorable economic news and another weak open in stocks. The stock selling that has pushed the Dow lower by 392 points and the Nasdaq down 130 points is a significant part of this morning?s bond gains. The bond market is currently up 27/32 (1.96%) which should push this morning?s mortgage rates lower by approximately .125 - .250 of a discount point if comparing to yesterdays early pricing. A little weakness in bonds late yesterday is taking away from this mornings gains.

The benchmark 10-year Treasury Note yield is below a very important threshold of 2.00%. It will be interesting to see if it remains below that level. Doing so opens the possibility of more improvements in the near future, driving mortgage rates lower also. On the other hand, if 2.00% is too strong of a resistance level and we close above it, this downward move in mortgage rates may be coming to an end very soon. The next day or two will be key in determining which direction we are heading.

There were two economic reports released this morning. The first being December's Consumer Price Index (CPI) at 8:30 AM. It showed that the overall CPI reading fell 0.1% while the more important core data rose 0.1%. Both readings were 0.1% weaker than forecasts, indicating that inflationary pressures at the consumer level of the economy remained subdued. This is good news for long-term securities such as mortgage-related bonds because rising inflation erodes their value and makes them less appealing to investors.

Also posted early this morning was December's Housing Starts that showed a 2.5% decline in new home groundbreakings. Analysts were expecting to see an increase in starts, so the data hints that the new home portion of the housing sector is softening. That makes the data favorable for bonds and mortgage rates. However, this data is not considered to be of high importance, limiting its impact on today?s rates.

Tomorrows only data is last week's unemployment update at 8:30 AM ET. It is expected to show that 280,000 new claims for unemployment benefits were filed last week, down from the previous week?s 284,000 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. The higher the number of claims, the better the news it is for bonds 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 · Jan 20, 2016

http://www.mortgagenewsdaily.com/mortgage_rates/blog/557078.aspx

Tamalewagon · Jan 21, 2016

http://www.mortgagenewsdaily.com/consumer_rates/557414.aspx

Tamalewagon · Jan 21, 2016

Thursdays bond market has opened down slightly even though today?s only relevant economic data gave us favorable results. The major stock indexes are showing sizable gains that are pressuring bonds during morning trading. The Dow is currently up 166 points while the Nasdaq has gained 40 points. The bond market is currently down 2/32 (1.99%), which should keep this morning?s mortgage rates close to yesterdays levels.

Todays only data was last week's unemployment figures that showed 293,000 new claims for unemployment benefits were filed last week. This was much higher than the 280,000 that was expected and a noticeable increase from last weeks revised total of 283,000 initial claims. The increase indicates that the employment sector was weaker week than many had thought, making the data good news for bonds and mortgage rates.

Tomorrow has two economic reports that we will be watching, both at 10:00 AM ET. Decembers Existing Home Sales from the National Association of Realtors is one. This data will give us a measurement of housing sector strength and mortgage demand by tracking home resales in the U.S. It is expected to show a rise in sales from November's level, meaning the housing sector strengthened last month. Ideally, bond traders would like to see a decline in sales that would point toward housing sector weakness because a weakening housing sector makes broader economic growth more difficult. However, as long we don't see a significant surprise in its results, it shouldn't have a noticeable impact on tomorrow?s mortgage pricing.

Decembers Leading Economic Indicators (LEI) is the final report of the week. The Conference Board, who is a New York-based business research group compiles the data and releases this report. It attempts to predict economic activity over the next several months, but since it is posted by a non-governmental agency, it is not considered to be of high importance to the financial and mortgage markets. Tomorrow's release is expected to show a 0.1% decline, meaning the indicators are predicting a slight easing in economic activity this spring. As long as we don't see a much stronger than predicted increase, I don't think this data will have much of an influence on mortgage pricing either.

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 · Jan 21, 2016

http://www.nytimes.com/2016/01/21/u...-global-markets.html?partner=rss&emc=rss&_r=0

Tamalewagon · Jan 22, 2016

Mortgage Rates Sideways Despite Market Weakness

Jan 21 2016, 4:38PM

Mortgage rates held mostly flat today, and that's an accomplishment! Lenders set mortgage rates based primarily on the prices of mortgage-backed-securities (MBS), which are part of the bond market, and bonds lost quite a bit of ground today. That would normally push mortgage rates higher, but today it did not. What's up with that?

First, understand that it's a fairly tumultuous time in financial markets at the moment. Stocks are off to the worst start of any year--ever--and bond markets have benefited as a result. In fact, it's not unfair to say that rates have been dragged lower against their will because apart from the heavy selling in stocks, there haven't been any other compelling reasons for 2016's stellar mortgage rate trend. One side-effect of being dragged lower against one's will is that the movement tends to be slower than it would be if both parties were on the same page.

Lenders have several incentives not to move rates too much lower too quickly. That sounds like a bad thing, and it usually is (albeit a necessary evil), but in cases where underlying markets suggest a more abrupt move higher in rate, it also means that lenders have some cushion to absorb the market move. As such, most lenders continue quoting conventional 30yr fixed rates in the 3.75-3.875% range on top tier scenarios. The bigger concern would be if this potential shift in the 2016 trend (stocks and bond yields bouncing higher) is still looking shifty tomorrow.

Tamalewagon · Jan 22, 2016

Fridays bond market has opened in negative territory with stocks showing strong gains during early trading and the more important of todays two economic releases giving us unfavorable results. The Dow is currently up 225 points while the Nasdaq is up 99 points. The bond market is currently down 15/32 (2.08%), which with some weakness late yesterday should push this morning?s mortgage rates higher by approximately .250 of a discount point.

The National Association of Realtors announced late this morning that home resales jumped 14.7% last month, exceeding forecasts by a pretty wide margin. Part of this increase is being attributed to a correction from November?s soft sales that were blamed on new disclosure rules that delayed closings. Still, because this news points towards a strengthening housing market that makes broader economic growth more likely, we need to consider the data negative for the bond and mortgage markets.

Decembers Leading Economic Indicators (LEI) was also posted at 10:00 AM ET today, revealing a 0.2% decline. This was close to the 0.1% decline that was expected, meaning the indicators are predicting slower economic growth over the next several months. Since bonds tend to thrive in weaker economic conditions, we should consider this data good news for mortgage rates. However, it is a minor report that showed a slight variance from forecasts, so its impact on today?s trading has been nearly non-existent.

We have a pretty busy week to look forward to next week with mortgage relevant events taking place four of the five days. There is nothing of importance scheduled for Monday, but the rest of the week brings us some important economic data including the initial GDP reading for last quarter, along with the first FOMC meeting of the year and a couple of Treasury auctions. 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... 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 · Jan 22, 2016

Existing Home Sales Rally after TRID-related November Loss

Jan 22 2016, 10:55AM

It is hard to sort out the closings scheduled for December from those delayed into the month from November by problems with the new Truth-in-Lending disclosure (TRID) rule. The bottom line however is that existing home sales rose by 14.7 percent from November to December The National Association of Realtors? (NAR) said the seasonally adjusted annual rate of sales during the month was 5.46 million homes compared to 4.76 million in November.

The monthly increase was the largest ever reported by NAR and more than offset the 10.5 percent plunge in sales in November, the largest slowdown since 2010, reducing the rate below that of November 2014. The December sales returned the rate to positive territory, 7.7 percent higher than in December 2014. All four regions of the country shared in the large increase.

Existing home sale numbers include completed sales transactions for single-family homes, condominiums, townhouses, and cooperative apartments. Single-family sales jumped 16.1 percent to a seasonally adjusted annual rate of 4.82 million from 4.15 million the previous month and were 7.1 percent higher than the 4.50 million pace a year earlier. Existing condominium and co-op sales increased 4.9 percent to a rate of 640,000 compared to 610,000 in November, and rose 12.3 percent year over year from a rate of 570,000 units.

Lawrence Yun, NAR chief economist, says December's year-end bounce caps off the best year of existing sales (5.26 million) since 2006 (6.48 million). "While the carryover of November's delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015," he said. "Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year."

The median price of an existing home sold in December was $223,100, a 7.6 percent increase from the previous December's median price of $208,200. It was the 46th consecutive month of annual gains. The median existing single-family home price was $226,000 in December, up 8.0 percent year-over-year and the median existing condo price was $209,900, a 4.9 percent gain.

The increased rate of sales also drove a drop in housing inventory to 1.79 million homes, a 12.3 percent decrease from November, and an estimated 3.9 month supply, the lowest since January 2005. Available homes for sale are now 3.8 percent lower than a year ago when the inventory was 1.86 million.

"Although some growth is expected, the housing market will struggle in 2016 to replicate last year's 7 percent increase in sales," adds Yun. "In addition to insufficient supply levels, the overall pace of sales this year will be constricted by tepid economic expansion, rising mortgage rates and decreasing demand for buying in oil-producing metro areas."

The percent share of first-time buyers increased to 32 percent in December from 30 percent in November. The average first-time buyer participation in 2015 was 15 percent, a one percentage point increase from the two previous years.

"First-time buyers were for the most part held back once again in 2015 by rising rents and home prices, competition from vacation and investment buyers and supply shortages," says Yun. "While these headwinds show little signs of abating, the cumulative effect of strong job growth in recent years and young renters' overwhelming interest to own a home5 should lead to a modest uptick in first-time buyer activity in 2016."

Sales to investors accounted for 15 percent of the December market down 1 point from November and 2 points from a year earlier. Sixty-four percent of investors paid cash and cash sales overall accounted for just short of a quarter of all home sale transactions.

Foreclosed properties had a 6 percent share of transactions, selling for an average of 16 percent below market price while short sales accounted for 2 percent and averaged a 15 percent discount. The two categories of distressed sales had comprised 11 percent of the market in December 2014.

Properties typically stayed on the market for 58 days in December, an increase from 54 days in November but below the 66 days in December 2014. Short sales were on the market the longest at a median of 86 days in December, while foreclosures sold in 68 days and non-distressed homes took 57 days. Thirty-two percent of homes sold in December were on the market for less than a month.

"December's rebound in sales is reason for cautious optimism that the work to prepare for Know Before You Owe is paying off," says NAR President Tom Salomone. "However, our data is still showing longer closing timeframes, which is a reminder that the near-term challenges we anticipated are still prevalent. NAR advised members to extend the time horizon on their purchase contracts to address this concern, and we'll continue to work with our industry partners to ensure 2016 is a success for consumers, homeowners and Realtors? alike."

December existing-home sales in the Northeast rose 8.7 percent to an annual rate of 750,000, and are now 11.9 percent above a year ago. The median price in the Northeast was $255,700, a 5.3 percent annual increase.

In the Midwest, existing-home sales jumped 10.9 percent month-over-month and 9.9 percent year-over-year to an annual rate of 1.22 million. The median price in the Midwest was $171,000, up 7.5 percent from a year ago.

Existing-home sales also increased solidly in the south, rising 14.6 percent to a rate of 2.27 million in December, an increase of 4.6 percent from a year earlier. The median price gained 6.8 percent to $196,100.

The largest increase was in the West, up 23.2 percent from November to an annual rate of 1.22 million in December and 8.9 percent above a year earlier. The median price in the West was up 8.2 percent to $321,100

Tamalewagon · Jan 25, 2016

It is going to be an interesting week with all of the financial information coming out...

Mondays bond market has opened in positive territory with stocks starting the week in negative ground. The major stock indexes are showing moderate losses with the Dow down 66 points and the Nasdaq down 9 points. The bond market is currently up 7/32 (2.03%), which should improve this morning?s mortgage rates by approximately .125 of a discount point.

There is nothing of importance set for release today that is likely to affect mortgage rates. The rest of the week is pretty busy though, having six economic reports in addition to the first FOMC meeting of the year and a couple of Treasury auctions that have the potential to affect bond trading and slightly move rates.

The calendar starts tomorrow with January's Consumer Confidence Index (CCI) at 10:00 AM ET. This report is considered to be of moderate importance to the bond market and therefore can move mortgage rates if it shows any surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a small rise from December's reading, indicating consumer confidence was a little stronger than last month. A reading much smaller than the expected 96.8 would be ideal for the bond market and mortgage rates. A higher reading than forecasts would hint that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher tomorrow.

Overall, Wednesday is a pretty safe bet as most important for mortgage rates but Friday is also a key day. Wednesday has the FOMC meeting results that is always big news and Friday's GDP report is highly important also. And stocks can affect bond trading and mortgage pricing any day, as we have seen with all the recent volatility. With all of this scheduled, there is a decent chance of seeing a very active week in mortgage rates this week. Therefore, please maintain constant 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 · Jan 26, 2016

Tuesdays bond market has opened in negative territory following early stock strength and much stronger than expected economic news. Stocks are in rally mode with the Dow up 240 points and the Nasdaq up 23 points. The bond market is currently down 3/32 (2.01%), which should keep this mornings mortgage rates close to yesterdays levels.

Januarys Consumer Confidence Index (CCI) was posted at 10:00 AM ET this morning, revealing a reading of 98.1 that was almost two points higher than Decembers revised reading. It also exceeded forecasts of 96.8, indicating surveyed consumers were more optimistic about their own financial and employment situations than many had thought. That is considered bad news for bonds and mortgage rates because rising confidence usually translates into more consumer spending, making for a stronger economy.

Tomorrow has one economic report we will be watching but it will likely be one of the afternoon events that will be the center of attention. Decembers New Home Sales will be released at 10:00 AM ET tomorrow morning. It is considered to be the sister release to last weeks Existing Home Sales, giving us a small snapshot of housing sector strength. It tracks a much smaller portion of home sales than last weeks report did and is forecasted to show an increase in sales of newly constructed homes. However, this data is not important enough to heavily influence mortgage pricing unless it varies greatly from forecasts.

This years first FOMC meeting that began today will adjourn at 2:00 PM ET tomorrow. There was a decent chance of this meeting yielding another quarter point increase to key short-term interest rates before the recent sell-off in stocks and oil costs. But now I believe the significant selling in stocks recently may alter the Feds monetary policy plans, at least temporarily. A rate hike is still possible though, so we need to be prepared in case it does happen. Afternoon volatility in the markets tomorrow is a strong possibility following the post-meeting statement release. This statement will not precede a press conference like last meeting did.

Also worth noting is tomorrows 5-year Treasury Note auction. If the sale is met with a strong demand from investors, the broader bond market may improve after results are posted at 1:00 PM ET. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates until we get to the FOMC statement. A strong interest in the securities could help boost bond prices.

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 · Jan 27, 2016

http://www.mortgagenewsdaily.com/consumer_rates/560340.aspx

Tamalewagon · Jan 27, 2016

Wednesdays bond market has opened in negative territory following stronger than expected economic news. The major stock indexes are not the cause of the bond weakness because they are showing noticeable losses themselves. The Dow is currently down 109 points while the Nasdaq has lost 50 points. The bond market is currently down 7/32 (2.02%), but we will likely see little change in this mornings mortgage rates due to strength late yesterday.

Decembers New Home Sales report was posted at 10:00 AM ET this morning, revealing a surprising 10.8% rise in sales of newly constructed homes. This was a larger increase than what was expected, indicating strength in the new home portion of the housing sector. That makes the data bad news for bonds and mortgage rates. However, I believe that this mornings softness in bonds is more a result of anxiety over this afternoons events then it is this data.

There are two afternoon events taking place today. The first is the relatively important 5-year Treasury Note auction. The Fed will auction 5-year Notes today and 7-year Notes tomorrow. If these sales are met with a strong demand from investors, the broader bond market may improve during afternoon hours. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates during early afternoon trading.

Next up is this years first FOMC meeting that will adjourn at 2:00 PM ET. There was a decent chance of this meeting yielding another quarter point increase to key short-term interest rates before the recent sell-off in stocks and oil costs. But now I believe the significant selling in stocks recently may alter the Fed?s monetary policy plans, at least temporarily. A rate hike is still possible though, so we need to be prepared in case it does happen. Afternoon volatility in the markets today is a strong possibility following the post-meeting statement release. Look for an update to this report shortly after the markets have an opportunity to react to the statement.

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 · Jan 27, 2016

http://www.mortgagenewsdaily.com/01272016_new_home_sales.asp

Tamalewagon · Jan 27, 2016

WEDNESDAY AFTERNOON UPDATE:
This week?s FOMC meeting has adjourned with an announcement of no change to key short-term interest rates. This move was pretty much expected due to the recent instability in the financial markets and concerns about overseas economic conditions. The statement reiterated previous comments that key rates will be adjusted on a gradual basis and as need economic conditions warrant. There were no major surprises in the statement.

The markets reacted differently following the release. Stocks lost ground, pushing the Dow lower by 239 points from yesterday?s close while the Nasdaq has lost 105 points. The bond market has improved, erasing this morning?s losses and an extension that came following today?s Treasury auction. It currently is up 1/32 (2.00%), which should create an improvement of approximately .125 of a discount point in this afternoon?s mortgage rates. Some lenders may opt to wait for tomorrow morning before reflecting this change though.

December's New Home Sales report was posted at 10:00 AM ET this morning, revealing a surprising 10.8% rise in sales of newly constructed homes. This was a larger increase than what was expected, indicating strength in the new home portion of the housing sector. That makes the data bad news for bonds and mortgage rates.

Today?s 5-year Treasury Note auction did not go very well. Several benchmarks we use to gauge investor demand showed that interest in the securities was not strong. That did cause bond prices to slip further before the FOMC meeting adjourned, but that was short-lived as we can now see. However, it makes it difficult to be optimistic about tomorrow?s 7-year Note auction.

Tomorrow morning has two pieces of economic data set for release, one of which is much more important to the markets than the other. The big report is December's Durable Goods Orders at 8:30 AM ET. It helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. These are also known as big-ticket items and include things such appliances, electronics and airplanes. The data is known to be quite volatile from month-to-month, but is currently expected to show a decline in orders of approximately 0.5%. A large drop in orders would be considered good news for bonds and mortgage rates. Even though this an important report, a slight variance likely will have little impact on mortgage pricing because of the large swings that are common in the data. Bond traders would prefer to see a large decline that would indicate weakness in the manufacturing sector.

Also coming early tomorrow morning is last week?s unemployment figures. They are expected to show that 285,000 new claims for unemployment benefits were filed last week, down from the previous week?s total of 293,000. Declining initial claims is a sign of employment sector strength, so the larger the number, the better the news it is for mortgage rates. Although, because this is only a weekly reading, the markets usually need a significant variance from forecasts for them to have a noticeable impact.

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 · Jan 28, 2016

Thursdays bond market has opened slightly in positive territory following weaker than expected economic news. Stocks have been active this morning but are currently showing gains of 10 points in the Dow and 3 points in the Nasdaq. The bond market is currently up 3/32 (1.99%), which with the post-FOMC gains yesterday should improve this morning?s mortgage rates by approximately .125 of a discount point if comparing to Wednesday morning pricing.

The Commerce Department announced at 8:30 AM ET this morning that new Durable Goods Orders fell 5.1% last month, falling well short of the 0.5% decline that was expected. A secondary reading that tracks new orders excluding more volatile and costly transportation-related products, such as new airplanes, slid 1.2% when analysts were calling for a 0.1% decrease. These are good readings for bonds and mortgage rates because they indicate weaker conditions in the manufacturing sector, at least for big-ticket items. This data is known to be quite volatile from month to month, but this was a wide enough margin to positively affect bond trading and mortgage pricing.

Also posted early this morning was last weeks unemployment figures. They showed that 278,000 new claims for unemployment benefits were made last week, down from the previous weeks revised total of 294,000. Since 285,000 is what was forecasted, we should consider the news negative for bonds as the softer number of initial claims hints that the employment sector was a bit stronger last week than many had thought.

We also have todays 7-year Treasury Note auction to watch. Yesterdays 5-year Treasury Note auction did not go very well, preventing us from getting too optimistic about todays sale. If there is a strong demand in todays auction, we could see bond prices improve during afternoon trading. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon hours.

Tomorrow has the remaining three reports, starting with what is arguably the single most important economic report that we see regularly. This would be the initial quarterly Gross Domestic Product (GDP) reading. Tomorrows release is the first of three versions we will get for the 4th quarter. This data is so important because it is considered to be the best measurement of economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. This initial reading will be followed by two revisions, each released approximately one month apart. Last quarters first reading, which usually carries the most significance, is expected to show the economy grew at an annual rate of only 0.9%. A noticeably weaker reading would be great news for the bond market, questioning the strength of our economy. That would likely fuel stock selling and a rally in bonds that should push mortgage rates lower. However, a larger than expected increase, indicating the economy was stronger than thought, will probably fuel bond selling and lead to higher mortgage rates.

The second release of the day will be the 4th Quarter Employment Cost Index (ECI), also at 8:30 AM ET. This index measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. If wages are rising, consumers have more money to spend and businesses usually need to charge more for their products and services. The report is considered moderately important and usually has more of an impact on the bond market than the stock markets. Current forecasts are showing an increase of 0.6%. A lower than expected reading would be favorable to bonds and mortgage rates tomorrow, but unless we see a large variance from forecasts and no surprises in the GDP, I am not expecting this report to have much of an influence on rates.

The final economic report of the week is the revised reading to the University of Michigan's Index of Consumer Sentiment just before 10:00 AM ET. This index is another measurement of consumer confidence that is thought to indicate consumer willingness to spend. I don't see this data having much of an influence on the markets or mortgage rates unless we see a large revision from the preliminary reading of 92.6. Currents forecasts are showing a 93.2 reading.

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 · Jan 28, 2016

Lower rates today. Check it out. www.scottwenhe.com. Click on products at the top.

Tamalewagon · Jan 29, 2016

http://www.mortgagenewsdaily.com/consumer_rates/562214.aspx

Tamalewagon · Jan 29, 2016

Fridays bond market has opened in positive territory following mostly favorable economic data. The stock markets are showing pretty strong gains also with the Dow up 180 points and the Nasdaq up 42 points. The bond market is currently up 13/32 (1.93%), which should improve this mornings mortgage rates by approximately .250 of a discount point.

There were three pieces of economic news posted this morning, one of which is considered to be key data. The key report was the initial Gross Domestic Product (GDP) reading for the 4th quarter. It revealed that the economy grew at an annual rate of 0.7% during the last three months of the year. This was a little softer than the 0.9% that was expected, making the report good news for bonds and mortgage rates. Bonds tend to thrive in weaker economic conditions, so the softer reading makes mortgage-related bonds more attractive to investors.

The 4th Quarter Employment Cost Index (ECI) was also released at 8:30 AM ET. It showed a 0.6% rise, matching forecasts. Since this was a minor report that did not show a surprise in the results, it has been a non-factor in this mornings bond trading and mortgage pricing.

Closing out the days activities and this weeks schedule was January?s revised reading to the University of Michigans Index of Consumer Sentiment just before 10:00 AM ET. It came in at 92.0, falling short of the 93.2 that was expected. That means surveyed consumers were less optimistic about their own financial conditions than thought and are less likely to make a large purchase in the near future. Because consumer spending makes up over two-thirds of our economy, we can consider this data favorable for bonds and mortgage rates.

Next week does not have a significant number of economic reports scheduled for release, but a good portion of what is being posted is considered to be highly important. There are two reports set for Monday- Personal Income and Outlays along with the ISM manufacturing index. Both can affect mortgage rates noticeably. Look for details on those releases and the rest of the weeks activities 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 · Jan 29, 2016

Rates are down for the third straight day. www.scottwenhe.com.

Tamalewagon · Feb 1, 2016

Mondays bond market has opened in negative territory despite early stock selling and somewhat favorable economic news. The major stock indexes are showing fairly sizable losses with the Dow down 112 points and the Nasdaq down 32 points. The bond market is currently down 7/32 (1.94%), which should push this mornings mortgage rates higher than Fridays early pricing by approximately .125 of a discount point.

Decembers Personal Income and Outlays data kicked off this weeks calendar at 8:30 AM ET today. It showed that personal income rose 0.3% in December while spending levels were unchanged. Analysts were expecting to see a 0.2% increase in both readings. The stronger income number means consumers had more to spend than thought, making it unfavorable for mortgage rates. However, offsetting that news and then some is the fact that they spent less than expected.

At 10:00 AM ET, the Institute of Supply Management (ISM) posted their manufacturing index for January. It came in at 48.2, just under the 48.3 that was expected. A downward revision to Decembers reading (48.2 to 48.0) means we saw a slight increase in manufacturer sentiment about business conditions. Still, the 48.2 reading indicates that more surveyed executives felt business worsened in the month than those who felt it had improved. That indicates sector weakness and makes report good news for the bond and mortgage markets.

We have four more monthly and quarterly economic reports scheduled the rest of the week that are likely to influence mortgage rates. There is nothing of importance scheduled for tomorrow, so unless stocks stage a major rally or sell-off, we can expect to see a relatively calm day for mortgage rates.

Overall, Friday is easily the best candidate for most important day of the week although today?s data was considered highly important also. The calmest day will probably be tomorrow unless something unexpected happens. I am fully expecting to see another very active week for mortgage rates, so 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 · Feb 1, 2016

by: Matthew Graham

Mortgage Rates Remain Near Long Term Lows

Feb 1 2016, 4:33PM

Mortgage rates were in line with the best levels in 8 months as of last Friday. Although they moved slightly higher to begin the new week, today is still the 2nd best day in the past 8 months. Lenders continue quoting conventional 30yr fixed rates of 3.75% for the most part with 3.625% being the next most prevalent rate.

In general, rates are taking cues from the big picture economic considerations and global financial market turmoil. Low oil prices and volatile stock markets have been helping. Most of the more focused economic data has been falling short of its usual potential to move markets. An exception will certainly be made for this Friday's Employment Situation report, which is the most important economic report of any given month. In the bigger picture, the trend toward lower rates continues, but any day that rates bounce slightly higher (like today) can mark the end of that trend.

Tamalewagon · Feb 2, 2016

Tuesdays bond market has opened up sharply following heavy selling in stocks. The major stock indexes are showing another round of sizable losses during early trading, pushing the Dow lower by 260 points and the Nasdaq down 59 points. The bond market is currently up 22/32 (1.87%), but due to weakness late yesterday we should see an improvement in this morning?s mortgage rates of only .125 - .250 of a discount point if comparing to Monday?s morning pricing.

There is nothing of importance scheduled for release today. I would not be surprised to see the bond market give back some of its early gains before the end of the day. The question is whether or not we can remain below 1.89% on the benchmark 10-year Treasury Note yield. Stocks are being influenced by falling oil prices, creating a flight to safety move into bonds. If oil prices stabilize, it is a safe bet to expect stocks to react by recovering losses. That could pull away funds that shifted into bonds, causing bond prices to fall and yields to rise. Since mortgage rates tend to follow bond yields, we would prefer to see weaker oil prices that will keep the stock market in negative territory. But please be careful, as these flight to safety moves usually unwind very quickly.

Tomorrow has only one report that we will be watching. That is Januarys ADP Employment report at 8:15 AM ET. This release has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. It tracks changes in private-sector jobs of the company's clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and also is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that usually follows a couple days later. Still, because we see a reaction to its results, it is included in this week's calendar. Analysts are expecting to see 190,000 new jobs. Good news would be a much smaller number of jobs.

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... Lock if my closing was taking place over 60 days from now... <we usually do not see a recommendation to lock this far out in advance...take note>

Tamalewagon · Feb 2, 2016

http://www.mortgagenewsdaily.com/02022016_corelogic_hpi.asp

Tamalewagon · Feb 3, 2016

Daily Rate Lock Advisory

Wednesdays bond market has opened down slightly following stronger than predicted economic news. The major stock indexes are mixed with the Dow up 39 points and the Nasdaq down 15 points. The bond market is currently down 3/32 (1.86%), which should keep this mornings mortgage rates close to yesterdays morning pricing.

Januarys ADP Employment report was todays only relevant economic data. The 8:15 AM ET release showed an increase of 205,000 private sector jobs. This was higher than the 190,000 that was expected, hinting at a stronger than thought employment sector. While that is bad news for the bond and mortgage markets, the real measurement of sector strength will come Friday morning when the government-issued Employment report is released.

There are three pieces of economic data scheduled for release tomorrow morning, none of which are considered to be highly important. We start with last weeks unemployment figures at 8:30 AM ET. They are being forecasted to show that 275,000 new claims for unemployment benefits were filed last week. This would be a small decline from the previous weeks total of 278,000. Since rising claims is a sign of a weakening employment sector, a large increase in new claims would be good news for mortgage shoppers.

Employee Productivity and Costs data for the 4th quarter will also be released early tomorrow morning. It can cause some movement in the bond market, but should have a minimal impact on mortgage pricing. If the productivity reading varies greatly from analysts' forecasts of a 1.7% decline, we may see some movement in mortgage rates. Higher levels of worker productivity is good news for the bond market because it allows the economy to expand while keeping inflation subdued.

Decembers Factory Orders data is also scheduled to be posted in the morning but at 10:00 AM ET. It is similar to last weeks Durable Goods Orders release in giving us a measurement of manufacturing sector strength, but this data includes new orders for both durable and non-durable goods. It is not one of the more important reports we get each month, however, it can influence mortgage pricing if it varies greatly from forecasts. Analysts are expecting a 2.6% decline in new orders, indicating a softening manufacturing sector. The bond market would like to see a larger decline, meaning that manufacturing activity was even weaker than many had thought.

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... Lock if my closing was taking place over 60 days from now...

Tamalewagon · Feb 3, 2016

Check them out www.ScottWenhe.com

Tamalewagon · Feb 4, 2016

Thursdays bond market has opened flat following mixed economic news. Stocks are showing noticeable gains with the Dow up 93 points and the Nasdaq up 14 points. The bond market is currently down 1/32 (1.88%), but we will likely still see an increase of approximately .125 of a discount point in this morning?s rates due to weakness late yesterday.

The first of todays three pieces of data was last weeks unemployment figures at 8:30 AM ET. They showed that 285,000 new claims for unemployment benefits were filed last week, up from the previous weeks revised total of 277,000. Analysts were expecting to see a slight decline in initial claims, not an increase. Therefore, we can consider this data to be good news for bonds and mortgage rates.

Employee Productivity and Costs data for the 4th quarter was also posted at 8:30 AM ET. It revealed a 3.0% decline in worker productivity and a larger than expected increase in labor costs. Bond traders would have preferred to see strong productivity and a softer labor cost reading, so the data is also negative news for bonds.

Decembers Factory Orders report data was posted at 10:00 AM ET by the Commerce Department. They announced a 2.9% decrease in new orders for durable and non-durable goods at U.S. factories. A decline of 2.6% was predicted, meaning the larger drop is technically good news but it wasnt enough of a variance to cause much of a reaction in the bond or mortgage markets.

Tomorrow brings us the big news of the week. The Labor Department will release the almighty Employment report for January at 8:30 AM ET tomorrow. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller increase in payrolls than expected and little or no rise in earnings. Current forecasts are calling for no change in the unemployment rate of 5.0% and approximately 188,000 new jobs added to the economy. Stronger than expected readings will likely fuel a stock market rally and selling in bonds that would cause a sizable upward revision to mortgage rates. On the other hand, disappointing numbers would raise concerns about the strength of economy and would likely lead to a sizable improvement in 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... Lock if my closing was taking place over 60 days from now...

Tamalewagon · Feb 5, 2016

Fridays bond market has opened in negative territory following conflicting economic news. The stock markets are also showing losses with the Dow down 126 points and the Nasdaq down 82 points. The bond market is currently down 11/32 (1.88%), but the increase we see in this mornings mortgage rates should be limited to just .125 of a discount point if comparing to Thursdays early pricing.

Todays only relevant economic data was the almighty monthly Employment report for January at 8:30 AM ET. It gave us several key readings on employment sector strength. Those readings gave us mixed results, hence the relatively muted response to the data initially before slipping into negative territory. The first headline number was the 4.9% unemployment rate that was lower than the 5.0% that was expected. Next up on the bad news chart was average hourly earnings that rose a surprising 0.5% when analysts were expecting to see only 0.3%. Rising wages concern traders because workers have more money to spend and the products/services businesses produce are likely to cost more to offset that increase.

The good news in the data was actually very good news. The report showed that only 151,000 jobs were added to the economy, falling well short of the 188,000 that was forecasted. It was also a sizable decline from Decembers revised 262,000 payrolls. In some ways, this is the most important of the three headline numbers. So the fact it gave us really favorable results is preventing a sell-off in bonds that would lead to a spike in mortgage rates. At least during early morning trading.

Next week brings us the release of only a couple of economic reports that may influence mortgage rates. One of them is a key consumer-spending report though. It also has two days of semi-annual Fed testimony before the House Financial Services and Senate Banking Committees. None of the week?s relevant events take place until Wednesday, so we can expect Monday?s trading to be driven by weekend news and possibly momentum from this afternoon. Look for details on next week?s 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... Lock if my closing was taking place over 60 days from now...

Tamalewagon · Feb 8, 2016

Mondays bond market has opened sharply higher due to heavy stock selling. The major stock indexes are showing significant losses during morning trading, driving the Dow lower by 380 points while the Nasdaq has lost 130 points. The bond market is currently up 30/32 (1.74%), which should improve this mornings mortgage rates by approximately .250 of a discount point over Fridays morning pricing.

There is nothing of importance scheduled for release today or tomorrow, leaving bonds to be influence by stock movement. That has worked to our advantage today as the selling in stocks has caused a flight-to-safety scenario that brings funds into bonds to escape the stock volatility. As long as stocks maintain this negative momentum, bonds could continue to benefit. The risk is that this type of improvement usually unwinds very quickly once stocks start to stabilize. In other words, enjoy the improvements now but please proceed cautiously if still floating an interest rate.

The rest of the week brings us the release of only two pieces of monthly economic data that are relevant to mortgage rates in addition to two Treasury auctions and semi-annual congressional Fed testimony. One of the economic reports is considered highly important to the markets, but the other is not likely to be a market mover. The Fed testimony has a decent probability of causing volatility in the markets and the auctions can lead to intraday changes to rates also. The Fed appearance is actually what is holding the current Lock recommendations in place.

Overall, expect Wednesday to be the key day of the week due to the congressional Fed testimony. Friday could be active for mortgage rates also due to the sales report. Stocks are probably going to also influence bond trading and mortgage pricing again this week. I am expecting this to be another busy week for the mortgage market, so please proceed cautiously if still floating an interest rate and closing in the near future.

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

Tamalewagon · Feb 8, 2016

Rates down sharply today. Stock market loss is mortgage rates gain (or lower rates).

www.scottwenhe.com - click on products in the top border

sirbob · Feb 8, 2016

Tamalewagon said:
Fridays bond market has opened...

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... Lock if my closing was taking place over 60 days from now...

So this is on Friday - three days ago. The Professionals in this market see the outlook as a must lock now situation.

Tamalewagon said:
Rates down sharply today. Stock market loss is mortgage rates gain (or lower rates).

www.scottwenhe.com - click on products in the top border

And this is the very next business day - 1 business day later !! Seriously they can't see any further ahead than 1 business day? It didn't say it might be better in a month or two - it said basically, no matter what if you plan to get a mortgage anytime soon LOCK NOW ITS ONLY GETTING WORSE!

I'm not saying that you said that - I get your just cutting and pasting the daily update, it just underlines why Wall Street can't be trusted to do anything but push people to do things that makes Wall Street money.

carry on...

Mortgage Market Update/Purchase and Refinance Mortgage info

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Little Buddy

Well-Known Member