Mortgage Market Update/Purchase and Refinance Mortgage info

[Tamalewagon]

Mondays bond market has opened in positive territory, recovering some of Fridays late losses. The stock markets are also starting the week in positive ground with the Dow up 89 points and the Nasdaq up 11 points. The bond market is currently up 10/32 (1.59%), but due to heavy selling late Friday, we still will see an increase of approximately .125 of a discount point in this morning?s mortgage rates if comparing to Fridays early pricing. If your lender did revise higher late Friday, your increase may be less this morning or possibly even a slight improvement, depending on how much of an intra-day revision was made.

Julys Personal Income and Outlays report was posted early this morning, revealing a 0.4% rise in income and a 0.3% increase in spending. Both readings indicate moderate economic growth but also matched forecasts. Because there was no surprise in the data, it has had little effect on this morning?s mortgage rates.

The rest of the week brings us six more pieces of economic data for the markets to digest, including a couple of extremely important reports. The first of those remaining reports will come from the Conference Board, who will post their Consumer Confidence Index (CCI) for August at 10:00 AM ET tomorrow morning. This index measures consumer sentiment about their personal financial and employment situations, giving us a measurement of consumer willingness to spend. A decline in confidence would indicate that surveyed consumers probably will not make a large purchase in the immediate future. That would be a sign of economic weakness and should drive bond prices higher, leading to lower mortgage rates tomorrow. It is expected to show a reading of 97.0, which would be a small decline from July's 97.3. The lower the reading, the better the news for bonds and mortgage pricing.

Overall, Friday is likely to be the most important day for mortgage rates due to the Employment report but Thursday could also be pretty active with the ISM manufacturing index being released. The best candidate for calmest day is Wednesday, assuming that the ADP employment release shows no surprises. Tomorrow could also be one of the calmer days of the week. However, I believe we are in for an active week in the financial and mortgage markets. Therefore, please proceed carefully 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]

Tuesdays bond market has opened down slightly due to stronger than expected economic news. The major stock indexes are showing fairly minor losses of 43 points in the Dow and 4 points in the Nasdaq. The bond market is currently down 1/32 (1.56%), but due to strength late yesterday we should still see an improvement of approximately .125 of a discount point in today?s mortgage rates.

Augusts Consumer Confidence Index (CCI) was today?s only relevant economic data, coming at 10:00 AM ET. The Conference Board announced a reading of 101.1 that was well above the 97.0 that was forecasted. This means surveyed consumers felt much better about their own financial and employment situations this month than many had thought. Because rising confidence usually translates into stronger levels of consumer spending, this was bad news for bonds and mortgage rates. Fortunately, this is a non-governmental report that is considered to be only moderately important to the markets.

Tomorrow also has a single report we need to watch. That would be the 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 than what analysts are expecting to see. It tracks changes in private-sector jobs of the company's clients that use them for payroll processing. I don't have much faith in the data for painting a broader picture of the employment sector but the markets do react to it, so we watch it. It is expected to show 170,000 new private-sector jobs were added last month. A higher number would be negative news for mortgage rates while a much smaller than expected increase would be favorable.

As the week progresses, we are getting into more important data and along with that, expected volatility in the markets. We have several reports still to come this week, including the highly important ISM manufacturing index Thursday morning and the extremely important Employment report Friday. It is common for market participants to make adjustments to their holdings ahead of major events. Back to back days of highly important data preceding a three day weekend certainly qualifies as a major event. Therefore, don?t be surprised to see some movement in the markets as traders prepare for the next couple of days.

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]

Wednesdays bond market has opened up slightly even though todays only economic data gave us stronger than expected results. The stock markets are showing minor losses with the Dow down 26 points and the Nasdaq down 5 points. The bond market is currently up 3/32 (1.56%), which should keep this morning?s mortgage rates at yesterday?s morning levels.

Todays ADP Employment report for August was released at 8:15 AM ET. It showed that 177,000 new private-sector jobs were added this month, exceeding the 170,000 that was expected. The report also showed an upward revision to Julys number by 15,000 payrolls. This news is technically negative for bonds and mortgage rates because it points towards a stronger employment sector. However, the markets don?t seem to be too impressed with the results, meaning it has had no impact on today?s mortgage rates.

Tomorrow has three pieces of economic data set for release, but one is much more important to the financial and mortgage markets than the others. The first is last weeks unemployment figures at 8:30 AM ET. They are expected to show that 265,000 new claims for unemployment benefits were filed last week, up from the previous week?s 261,000 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 since rising claims is a sign of employment sector weakness.

The second report of the day will be the revised 2nd Quarter Productivity numbers that measure employee productivity in the workplace, also at 8:30 AM. Strong levels of productivity allow the economy to expand without inflation concerns. It is expected to show a downward change from the previous estimate of a 0.5% decline. Forecasts are currently calling for a 0.6% decrease, meaning productivity was weaker than previously thought. This would be negative news for the bond market and mortgage rates, but the markets will be more focused on the day's next release than this data.

Tomorrows big news will be the release of the Institute for Supply Management's (ISM) manufacturing index at 10:00 AM ET. This index measures manufacturer sentiment and is expected to show 52.2, slipping from last month's reading of 52.6. A reading below 50 is considered a recessionary sign because it means that more surveyed manufacturers felt business worsened during the month than those who felt it had improved. A larger than expected decline in the index would likely cause selling in the stock markets and lead to an improvement in mortgage rates, especially if gets close to that 50.0 threshold.

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]

Thursday?s bond market opened in negative territory but has since rebounded to recover most of that initial move. The stock markets are showing early losses due to the weak manufacturing news that fueled the about face in bonds. The Dow is currently down 74 points while the Nasdaq has lost 20 points. The bond market is currently down 2/32 (1.58%), but due to selling late yesterday we still should see a slight increase in this morning?s early mortgage pricing.

There were three pieces of economic data released this morning. The two early releases were not nearly as important as the 10:00 AM report. The first report of the day was last week's unemployment figures that showed 263,000 new claims for unemployment benefits were filed during the week. This was a small increase from the previous week?s 261,000 but a little softer than forecasts of 265,000 initial filings. The increase is good news for bonds because rising claims indicates the employment sector was weaker than the previous week. However, this is only a weekly report and the variance was minor, so the data has had practically no impact on today?s mortgage rates.

Revised 2nd Quarter Productivity numbers were also posted early this morning. This report also is not considered to be of high importance, but it did show a sizable miss in one of the components. The headline productivity reading showed a 0.6% decline in worker output. The decline is not ideal for bonds but it matched expectations. A secondary reading that tracks labor costs showed an unexpected increase (+4.3% vs forecasts of +2.1%). The jump in labor costs is an inflationary sign, making it bad news for bonds and mortgage rates. Even though the report as a whole is generally not considered to be of high importance, this surprise increase in labor costs did have a negative impact on bonds during early morning trading.

Today?s big news came in the Institute for Supply Management's (ISM) manufacturing index at 10:00 AM ET. They announced a reading of 49.4 that shocked many market participants and analysts. This was well below expectations and strongly suggests that the manufacturing sector has some issues. A reading below 50.0 means more surveyed executives felt business worsened in the month than those who said it had improved. It is also a recessionary sign that draws plenty of attention in the markets. This was clearly good news for bonds and mortgage rates. Unfortunately, the morning got off on a pretty strong negative tone, so this news just erased a good part of those earlier losses in bonds.

The most important news of the week comes early tomorrow morning. The Labor Department will post the unemployment rate, number of new jobs added or lost and average hourly earnings for August early Friday morning. The ideal scenario for the bond market and mortgage rates is rising unemployment, a drop in payrolls and earnings to fall slightly. Analysts are expecting to see that the unemployment rate fell 0.1% to 4.8% and that 180,000 jobs were added during the month. Weaker than expected readings would signal employment sector weakness and would be very good news for bonds and mortgage rates tomorrow. However, if we get stronger than expected numbers, mortgage rates will probably spike higher as it would give the Fed a good reason to raise key short-term interest rates sooner than later. Although, today?s ISM news does make a Fed move soon less likely.

July's Factory Orders data will close out this week?s calendar at 10:00 AM ET tomorrow morning. This report measures manufacturing sector strength and is similar to last week's Durable Goods Orders, but includes orders for both durable and non-durable goods. It is expected to show a 2.0% increase in new orders. A smaller than expected rise would be favorable for bonds, but I don't see this data causing much movement in rates unless its results vary greatly from forecasts since the big-ticket products portion of the report was released last week and the monthly Employment report is considered to be a key release.

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

 

[Tamalewagon]

Mortgage Brokers -

Are you prepared for tomorrow's Jobs Report?
The Bureau of Labor Statistics will release the August Jobs Report tomorrow. It is forecasted that employers added 180,000 new workers. The Fed will be completely locked on the numbers to gauge if the sector is near full employment. This month's report will weight heavy on the Fed's decision on whether or not to raise interest rates in the coming months.

 

[Tamalewagon]

Fridays bond market opened in negative territory even though todays employment data showed weaker than expected results. The stock markets are reacting to the same data with sizable gains, pushing the Dow higher by 95 points and the Nasdaq up 29 points. The bond market is currently down 13/32 (1.61%), but preventing an increase in this mornings mortgage rates is strength late yesterday. If your lender did improve rates intraday yesterday, then you should see an increase in this morning?s pricing by the same amount.

Todays major economic news was Augusts Employment report from the Labor Department at 8:30 AM ET. The headline numbers were 151,000 new jobs, a 4.9% unemployment rate and a 0.1% increase in average earnings. The payroll number was softer than the 180,000 that was expected as was the earnings increase that was predicted to rise 0.2%. The unemployment rate was forecasted to slip 0.1% to 4.8% but remained unchanged from Julys level. All three readings are favorable for bonds and mortgage rates, although it does not appear that way considering this mornings losses. Apparently traders wanted to see even weaker numbers.

Also posted this morning was Julys Factory Orders data. The Commerce Department said at 10:00 AM ET that new orders for durable and non-durable goods rose 1.9% in July, nearly matching forecasts of 2.0%. A good portion of this data was posted in last weeks Durable Goods Orders report, so todays version does not carry too much significance. This is particularly true when it follows key data such as the Employment report.

Overall, the employment data we saw today is actually good news for bonds while the manufacturing report is neutral to slightly negative. Besides the news that the employment sector was weaker than thought, the data also makes it less likely that the Fed will make a rate hike happen at its September meeting. Historically, the Fed avoids making monetary policy moves near a Presidential election (November FOMC meeting), so most analysts now think the rate hike will come at Decembers meeting at the earliest.

Next week does not have much scheduled in terms of economic data or other events that may influence mortgage rates. The financial and mortgage markets will be closed Monday in observance of the Labor Day holiday and will reopen Tuesday for regular trading. There is no early close today in the bond or stock markets ahead of the holiday. Look for details on next 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... Lock if my closing was taking place over 60 days from now...

 

[Tamalewagon]

Tuesdays bond market has opened in positive territory following the long weekend. Stocks are starting the week mixed but calm with the Dow down 3 points and the Nasdaq up 7 points. The bond market is currently up 12/32 (1.56%), which should improve this mornings mortgage rates by approximately .125 of a discount point if comparing to Fridays early pricing. The financial markets were closed yesterday in observance of the Labor Day holiday.

There is nothing of relevance scheduled to be posted or announced today or tomorrow. In fact, there is only one report this week that we need to be concerned with and it comes Wednesday afternoon. In the absence of economic data on the schedule, look for the stock markets to affect bond trading and mortgage pricing. Stock strength will probably lead to bond weakness and higher mortgage rates. If the major stock indexes fall from current levels, bond prices should rise, pushing mortgage rates lower the first couple days.

Overall, we should see a calmer week for the bond and mortgage markets unless something unexpected happens. It is difficult to label one particular day as most important, but by default I suppose we can make Wednesday it since it has the only report we need to be concerned with (Fed Beige Book). Any day could be the calmest for rates, assuming stocks don?t rally or sell-off. It is recommended that fairly regular contact always be maintained when floating an interest rate. However, with so little scheduled this week, it may be needed less than other weeks.

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

 

[riverrunner1984]

Tuesdays bond market has opened in positive territory following the long weekend. Stocks are starting the week mixed but calm with the Dow down 3 points and the Nasdaq up 7 points. The bond market is currently up 12/32 (1.56%), which should improve this mornings mortgage rates by approximately .125 of a discount point if comparing to Fridays early pricing. The financial markets were closed yesterday in observance of the Labor Day holiday.

There is nothing of relevance scheduled to be posted or announced today or tomorrow. In fact, there is only one report this week that we need to be concerned with and it comes Wednesday afternoon. In the absence of economic data on the schedule, look for the stock markets to affect bond trading and mortgage pricing. Stock strength will probably lead to bond weakness and higher mortgage rates. If the major stock indexes fall from current levels, bond prices should rise, pushing mortgage rates lower the first couple days.

Overall, we should see a calmer week for the bond and mortgage markets unless something unexpected happens. It is difficult to label one particular day as most important, but by default I suppose we can make Wednesday it since it has the only report we need to be concerned with (Fed Beige Book). Any day could be the calmest for rates, assuming stocks don?t rally or sell-off. It is recommended that fairly regular contact always be maintained when floating an interest rate. However, with so little scheduled this week, it may be needed less than other weeks.

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

I'm looking to possibly refi on my jumbo loan in San Bernardino County with all this news of good interest rates...
I am currently at 4.125% on roughly a $550k loan....Home is valued right around $690k....Dont want to take any money out.
Could I go less than 4.125 or is that still a good rate???

 

[Deckin Around]

No AZ license? Common, on this website????D

I had my dad give you a call about his house in the Keys in Parker.... but no go

 

[Tamalewagon]

No AZ license? Common, on this website????D

I had my dad give you a call about his house in the Keys in Parker.... but no go

Much appreciated. I suggested another avenue that would save him more $$ than the Parker house. Still waiting for his answer. Thank you for the referral. I appreciate it a great deal. :thumbsup

 

[Tamalewagon]

Wednesdays bond market has opened in positive territory, extending yesterdays late gains. The stock markets are mixed again with the Dow down 17 points and the Nasdaq up 1 point. The bond market is currently up 2/32 (1.52%), which should keep this mornings mortgage rates approximately .125 of a discount point better than Tuesdays morning pricing. Many lenders revised rates lower by that amount yesterday afternoon. If your lender was not one of them, you should see an improvement of that amount or slightly less in this mornings pricing.

There is nothing of importance being released this morning, but we do have something scheduled for this afternoon that does have the potential to influence mortgage rates. This would be the Federal Reserves Beige Book report at 2:00 PM ET today. This report details current economic conditions in the U.S. by Federal Reserve regions. It is believed to be a key source of data when the Fed meets for their FOMC meetings and is usually released approximately two weeks prior to each meeting. If it reveals any significant surprises or changes from the previous release, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Feds likelihood of raising short-term interest rates when they meet September 20 and 21. If there are no surprises or noticeable changes, this report could be a non-factor in the markets this afternoon.

Tomorrow brings us only the weekly unemployment update at 8:30 AM ET. It is expected to show that 265,000 new claims for unemployment benefits were filed last week, up from the previous weeks 263,000. The larger the number of new claims, the better the news it is for bonds and mortgage rates because rising claims is a sign of a softening employment sector. This is only a weekly snapshot of the sector, so its influence on mortgage rates is often weak unless it shows a significant variance from forecasts. However, with so little economic data being posted this week, we could see a slightly stronger reaction to the results than we usually do.

There is little left to drive bond trading after tomorrow?s weekly unemployment figures. If the major stock indexes remain calm, I suspect bonds will likely follow suit for the most part. If we see stocks rally, they could pressure bonds, causing a slight increase in mortgage rates. On the other hand, stock selling should help keep mortgage rates at their current levels or a little lower.

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]

Thursdays bond market has opened in negative territory, following suit with the stock markets. The major stock indexes are showing moderate losses of 55 points in the Dow and 24 points in the Nasdaq. The bond market is currently down 8/32 (1.56%), but we shouldn?t see much of a change in this morning?s mortgage rates if comparing to Wednesday?s early pricing.

Yesterday afternoons Fed Beige Book release did not give us many surprises. It indicated that overall economic growth was modest to moderate from early July through late August and there was an expectation of that growth continuing. Wages in some sectors did show signs of rising that has implications on inflation forecasts, but not enough to raise too many alarms at this time. Overall, the report did not have an impact on yesterday?s mortgage rates.

This mornings only economic data was last weeks unemployment figures at 8:30 AM ET that showed that 259,000 new claims for unemployment benefits were filed last week. This was a decline from the previous week?s 263,000 initial filings and lower than the 265,000 that was expected. This number indicates that the employment sector was stronger than thought, making the data bad news for mortgage rates. However, this is only a weekly snapshot and the variance from forecasts was not wide enough to cause this mornings selling in bonds.

We can attribute this mornings bond losses more on news from the European Central Bank (ECB) than todays unemployment figures. The ECB had what is equivalent to our FOMC meeting and left their current bond buying program in place without expanding it. Apparently bond traders here were expecting the ECB to take further measures to boost economic growth there and the lack of is being taken as a disappointment. The reaction we are seeing likely is a result of a lack of relevant economic data this week to give traders something to trade on, leaving them grasping for anything to use.

There is nothing of importance scheduled tomorrow that is expected to influence mortgage rates. There are a couple of Fed member speaking engagements that will be watched, but none are expected to have a significant impact on the financial or mortgage markets.

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

 

[Tamalewagon]

Mondays bond market has opened flat as stocks open the week fairly calm also. The major stock indexes are showing minor gains, pushing the Dow up 12 points and the Nasdaq up 10 points. The bond market is currently down 1/32 (1.67%), which with Fridays afternoon weakness should mean this mornings mortgage rates will be slightly higher than Fridays morning pricing.

There is no relevant economic data being released today or tomorrow. The rest of the week has five pieces of monthly economic data for the markets to digest, most of which are considered to be important. There are also two Treasury auctions that have the possibility to affect mortgage pricing. All of the relevant economic data comes the latter part, so we could see the most movement in rates as the week progresses.

Even though we don?t have economic news to watch today, we do have the first of those two Treasury auctions that have the potential to influence mortgage rates. 10-year Treasury Notes will be sold today followed by a 30-year Bond auction tomorrow. If the sales are met with a decent demand from investors, indicating that interest in longer-term securities such as mortgage-related bonds is strengthening, we should see interest in the broader bond market strengthen also. The results of each sale will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading. However, weak levels of interest could lead to broader selling in the bond market that could push mortgage rates higher.

Overall, Thursday looks to be the most important day with two highly influential reports scheduled for release (Retail Sales and Producer Price Index). Wednesday could be the calmest day, but that doesn?t mean we are likely to see no change in rates that day. There is some pretty important data coming later this week with the FOMC meeting later this month nearing also. Therefore, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

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

 

[Tamalewagon]

Tuesdays bond market has opened down slightly as the markets continue to react to theories about the upcoming FOMC meeting. Stocks are extending their rollercoaster ride with significant losses during early trading. The Dow is currently down 177 points while the Nasdaq has lost 41 points. The bond market is currently down 4/32 (1.67%), but due to strength late yesterday we still should see an improvement in this mornings mortgage rates of slightly less than .125 of a discount point over Mondays early pricing.

Yesterdays afternoon strength certainly was not a result of the 10-year Treasury Note auction. The indicators we use to measure investor interest in the securities showed below average compared to recent sales. The market did not react negatively to the news and actually improved later in the afternoon as stocks rallied. That makes it hard to tell if today?s 30-year Bond auction will have an impact on today?s rates regardless of its results. They will be posted at 1:00 PM ET, so if there is a reaction it will come during early afternoon trading.

There is nothing of importance set for tomorrow. We can expect bonds to move with stocks but I would not be surprised to see a fairly calm day as traders prepare for what is coming Thursday and Friday. Normally, bonds move in the opposite direction of stocks since what is traditionally good news for stocks is bad for bonds. The past couple days we have seen them parallel to each other.

Thursday has three monthly reports in addition to the weekly unemployment update. Two of those monthly reports are considered highly important to the markets (Retail Sales and Producer Price Index). They will be followed by the Consumer Price Index and a consumer sentiment reading Friday. Both days are likely to be active for mortgage rates.

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

 

[Tamalewagon]

Wednesdays bond market has opened in positive territory, staying on track with stocks. The major stock indexes are showing moderate gains with the Dow up 51 points and the Nasdaq up 30 points. The bond market is currently up 12/32 (1.68%), but unfortunately weakness late yesterday will keep this mornings mortgage rates at yesterdays morning levels.

Yesterdays 30-year Bond auction went pretty poorly with several indicators showing lackluster interest in the securities. However, bonds were weakening before results were posted at 1:00 PM ET, so it is difficult to blame the late selling on this. It coincided more with stocks making another move lower as fears about next week?s FOMC meeting are the primary focus right now.

Today has nothing set for release that is likely to affect mortgage rates. There is no reason to think that bonds will break away from tracking stocks yet. That means is stocks extend their morning gains, bonds should do the same, possibly leading to an intraday improvement to mortgage rates. On the other hand, if they give back this mornings upward move, bonds should follow suit. That would probably cause mortgage rates to move slightly higher before the end of the day.

Tomorrow has four releases coming, but two of them are considered to be highly important to the financial and mortgage markets. The first of three that will be posted at 8:30 AM is the least important of the batch. That is last weeks unemployment update that is expected to show that 263,000 new claims for unemployment benefits were filed last week, up from the previous week?s 259,000 initial claims. Since rising claims hints at employment sector weakness, the higher the number the better the news it is for mortgage rates. However, because this is only a weekly report and comes at the same time as two very important releases, it likely will have little impact on tomorrows mortgage rates.

The Augusts Retail Sales report is the first of the two key releases of the day. This Commerce Department report will give us a very important measurement of consumer spending that is extremely relevant to the markets because it makes up over two-thirds of the U.S. economy. Current forecasts are calling for a 0.1% decline in sales. Analysts are also calling for a 0.3% rise in sales if more volatile auto transactions are excluded. Stronger than expected sales would be considered bad news for bonds and likely lead to an increase in mortgage pricing since it would indicate economic growth.

The Labor Department will post Augusts Producer Price Index (PPI) early tomorrow morning, giving us an indication of inflationary pressures at the producer level of the economy. There are two readings that analysts follow in this release. They are the overall index and the core data reading. The core data is the more important of the two since it excludes more volatile food and energy prices. Analysts are predicting 0.1% increases in both readings. Stronger than expected readings could fuel inflation concerns in the bond market. That would be bad news for bonds and mortgage rates because inflation is the number one nemesis of the bond market as it erodes the value of a bond's future fixed interest payments. As inflation becomes more of a concern in the markets, bonds become less appealing to investors, leading to falling prices, rising yields and higher mortgage rates. Rising inflation also makes a Fed rate more likely to come sooner than later.

Augusts Industrial Production data will close out tomorrows schedule at 9:15 AM ET. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important, meaning the two 8:30 AM reports will be the focus of morning trading. A 0.3% decline from Julys level of output is what market participants are expecting to see. An increase would be negative news for bonds and mortgage rates, while a weaker than expected figure would indicate a softer than thought manufacturing sector and would be considered good news. Although, the Retail Sales and PPI reports will draw much more attention than this report will.

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]

Thursdays bond market has opened in negative territory despite a batch of favorable economic reports. The stock markets are showing moderate gains of 62 points in the Dow and 35 points in the Nasdaq. The bond market is currently down 4/32 (1.71%), which should keep this mornings mortgage rates at yesterdays levels.

The first of this mornings four pieces of economic data was August?s Retail Sales report at 8:30 AM ET. The Commerce Department announced a 0.3% decline in retail-level sales last month that was weaker than the 0.1% decline that was expected. A secondary reading that tracks sales excluding more volatile and costly auto transactions showed a 0.1% decline when analysts were predicting a 0.3% increase. These readings indicate that consumers spent less last month than they did in July. Because consumer spending makes up such a large portion of our economy, this is a sign of economic weakness that makes the data favorable for bonds and mortgage rates.

Also at 8:30 AM was the release of Augusts Producer Price Index (PPI) that showed no change in the overall reading and a 0.1% rise in the core data that excludes volatile food and energy prices. The overall reading was slightly softer than forecasts (+0.1%) but the more important core reading pegged expectations. The report shows that inflationary pressures at the producer level of the economy remained subdued, making the data slightly favorable for mortgage rates.

Last weeks unemployment numbers showed that 260,000 new claims for benefits were filed, rising slightly from the previous week?s 259,000 initial claims. Analysts were calling for 263,000 new filings, but this is not enough of a variance in a weekly report to cause much concern or excitement. That has prevented it from having any impact on today?s bond trading or mortgage pricing.

The final relevant report of the day was Augusts Industrial Production data at 9:15 AM ET. It revealed a 0.4% decline in output at U.S. factories, mines and utilities. Forecasts were calling for a 0.3% decline in production, making the data good news for bonds because it showed manufacturing activity was softer than thought. However, this is only a moderately important report so has had little influence on today?s mortgage pricing.

Tomorrow has two more economic reports with the release of August?s Consumer Price Index (CPI) and a consumer confidence reading from the University of Michigan. The 8:30 AM ET CPI is the more important of the two since it is considered to be a key indicator of inflation at the consumer level of the economy. As with today?s PPI, there are two readings in the report. Current forecasts show a 0.1% increase in the overall reading and a 0.2% rise in the more important core reading. The weaker the readings, the better the news it is for bonds and mortgage rates because rising inflation makes long-term investments such as mortgage-related bonds less attractive to investors.

The final relevant release of the week will come from the University of Michigan just before 10:00 AM ET tomorrow morning. Their Index of Consumer Sentiment for September will give us an indication of consumer confidence, which projects consumer willingness to spend. If a consumers confidence in their own financial situation is rising, they are more apt to make large purchases in the near future. But, if they are growing more concerned about their job security or finances, they probably will delay making that sizable purchase. This influences future consumer spending data and therefore, impacts the financial markets. It is expected to show a reading of 91.5 that would mean confidence strengthened from August's level of 89.8. That would be considered slightly negative news for bonds and mortgage shoppers.

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]

Fridays bond market has opened fairly flat following mixed economic news. The stock markets appear ready to close the week on a negative note with noticeable losses in the major indexes. The Dow is currently down 118 points while the Nasdaq has lost 25 points. The bond market is currently up 1/32 (1.69%), which should leave this mornings mortgage rates unchanged from Thursdays morning levels.

There were two pieces of economic data posted this morning. The bad news came in the Consumer Price Index (CPI) for August that showed a 0.2% increase in the overall reading and a 0.3% rise in the more important core data. Both readings exceeded forecasts by 0.1%, meaning inflationary pressures were slightly stronger at the consumer level of the economy last month than was expected. That is bad news for bonds and mortgage rates because rising inflation makes long-term bonds less attractive to investors and also makes a Fed rate hike sooner than later more likely.

Late this morning came the University of Michigans Index of Consumer Sentiment for September, revealing a reading of 89.8 that fell short of forecasts. Analysts were expecting to see a reading of 91.5 that would have meant surveyed consumers were more optimistic about their own financial situations than they were in August. Because there was no rise in confidence, it is believed that consumers may not be as apt to make a large purchase in the near future. That would help limit economic growth, making the reading good news for bonds and mortgage rates.

Next week is all about the Fed. There are a couple of housing related reports set for release, but the markets will be focused on Wednesday?s FOMC meeting adjournment and the economic revisions that will be released followed by press conference with Fed Chair Janet Yellen. There is nothing of importance scheduled for Monday. Look for details on next week?s 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... Lock if my closing was taking place over 60 days from now...

 

[Tamalewagon]

Mondays bond market is starting the week flat even though stocks are in buying mode. The major stock indexes are showing sizable gains of 113 points in the Dow and 27 points in the Nasdaq. The bond market is currently up 1/32 (1.69%), which should keep this mornings mortgage rates at Fridays levels.

There is nothing of importance scheduled for today. The rest of the week brings us the release of only three monthly economic reports, none of which are considered to be highly important. However, it still will be an active week in the mortgage market because the main focus will be the Federal Reserve and their mid-week events.

Augusts New Home Sales will start this weeks activities late tomorrow morning. The Commerce Department is expected to say that sales of newly constructed homes fell last month, indicating softness in the new home portion of the housing sector. This report will likely not have a noticeable impact on mortgage rates unless its readings differ greatly from forecasts. This is the weeks least important report in terms of potential impact on mortgage rates, partly because it covers only the small portion of all homes sales that the Existing Home Sales report does not.

Overall, Wednesday is clearly the most important day of the week, particularly the afternoon hours because of the Fed?s FOMC adjournment, economic projections and press conference. Friday is the best candidate for calmest day for mortgage rates. I believe we are going to see a fair amount of volatility in the markets and mortgage pricing this week. Therefore, please proceed carefully 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]

Tuesdays bond market has opened in positive territory as investors position themselves ahead of tomorrow?s Fed events. The stock markets are showing gains with the Dow up 50 points and the Nasdaq up 11 points. The bond market is currently up 10/32 (1.67%), but weakness late yesterday will prevent an improvement in this mornings mortgage pricing.

Todays only economic data was Augusts New Home Sales that showed a 5.7% decline in sales of newly construct homes. This was a much larger decline than was expected, indicating weakness in the new home portion of the housing sector. Unfortunately, this is considered to be a low importance report, so its impact on today?s mortgage rates has been minimal.

Tomorrow has no relevant economic reports set for release, but does bring us some highly influential Fed events during afternoon trading. They start with the FOMC meeting that may or may not bring an increase in key short-term interest rates, which will adjourn at 2:00 PM ET. There is a small chance of the Fed raising rates at this meeting. It is my opinion that they will hold off making a move at this time, opting to wait for more economic data domestically and internationally. There is a November FOMC meeting, but the Fed traditionally does not make a monetary policy move around a Presidential election. Therefore, if no increase comes this week, it likely will not come until at least Decembers meeting.

Also at 2:00 PM ET tomorrow, the Fed will release their revised economic projections for the U.S. The markets are interested in whether Janet Yellen and friends think economic conditions will be stronger or weaker in the coming months and years than previously thought. Key readings the markets will be looking for are the unemployment rate, inflation and overall GDP growth. Downward revisions by the Fed will be good news for bonds and mortgage rates because it would mean a December rate hike may not be a sure thing after all. On the other hand, upward revisions that indicate the economy is likely to support a Fed rate hike could cause bond selling and an increase to mortgage pricing.

The post-meeting statement and economic projections will be followed by a press conference with Fed Chair Yellen at 2:30 PM ET tomorrow. All Fed meetings are highly important, but this one is particularly significant for the financial and mortgage markets due to the uncertainty of when the Fed will make another monetary policy move. Analysts and market traders will be watching her words carefully for any indication on the likelihood of a rate hike later this year (assuming one was not made at this meeting). Any question or answer at the press conference can impact the markets, so there is a decent chance of seeing quite a bit of volatility during mid-afternoon trading tomorrow.

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

Wednesday?s bond market has opened down slightly as traders await the outcome of today?s big Fed events. Stocks are showing noticeable gains with the Dow up 81 points and the Nasdaq up 30 points. The bond market is currently down 2/32 (1.69%), which should mean this morning?s mortgage rates will be slightly higher than Tuesday?s morning pricing.

There is no relevant economic data being posted this morning. The only news worth reporting is several announcements from the Bank of Japan about monetary policy moves they made. There were several announcements, most of which are extremely complicated and some are a bit confusing. Therefore, we will avoid addressing them so we can keep today as simple as possible.

We have three highly influential Fed events taking place today, all during afternoon trading. They start with the adjournment of the two-day FOMC meeting at 2:00 PM ET. This meeting likely will not bring an increase in key short-term interest rates but there is a small possibility of it happening. It is my opinion that they will hold off making a move at this time, opting to wait for more economic data domestically and internationally. There is a November FOMC meeting, but the Fed traditionally does not make a monetary policy move around a Presidential election. Therefore, if no increase comes this week, it likely will not come until at least December?s meeting. The post-meeting statement will be dissected closely for any indication if the Fed is expecting to act at December?s meeting.

Also at 2:00 PM ET, the Fed will release their revised economic projections for the U.S. The markets are interested in whether Janet Yellen and friends think economic conditions will be stronger or weaker in the coming months and years than previously thought. Key readings the markets will be looking for are the unemployment rate, inflation and overall GDP growth. Downward revisions by the Fed will be good news for bonds and mortgage rates because it would mean a December rate hike may not be a sure thing after all. On the other hand, upward revisions that indicate the economy is likely to support a Fed rate hike could cause bond selling and an increase to mortgage pricing.

Those events will be followed by a press conference with Fed Chair Yellen at 2:30 PM ET. All Fed meetings are highly important, but this one is particularly significant for the financial and mortgage markets due to the uncertainty of when the Fed will make another monetary policy move. Analysts and market traders will be watching her words carefully for any indication on the likelihood of a rate hike later this year (assuming one was not made at this meeting). Any question or answer at the press conference can impact the markets, so there is a decent chance of seeing quite a bit of volatility during mid-afternoon trading today.

There is some economic data coming tomorrow morning, but we will address them in this afternoon?s update that will be posted shortly after the markets have an opportunity to react to today?s Fed events.

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]

WEDNESDAY AFTERNOON UPDATE:
This week?s FOMC meeting has adjourned with no change to key short-term interest rates. This was widely expected as many analysts felt a December move by the Fed was more logical. The post-meeting statement contained several changes from the previous one with a couple being noteworthy but not surprising. The most important verbiage stated that the employment sector continues to strengthen and overall economic growth is stronger now than during the first half of the year. It also reiterated that inflation remains subdued as it continues to run below the Fed?s preferred annual rate of 2.0%. They also indicated that economic risks are ?balanced? which is a key word for justifying a rate increase. What was a surprise was the 7-3 vote to keep rates unchanged at this meeting. If 3 voting members wanted to raise rates now, it is a pretty safe bet that we will see a couple more vote for the increase later this year, assuming something drastic does not happen in the meantime.

Their economic projections showed a couple of changes that were favorable to bonds and mortgage rates. The biggest being the overall GDP growth of 1.8% instead of the previous prediction of 2.0%. That means the Fed is expecting weaker economic activity than previously estimated. They are also expecting the unemployment rate to eventually fall to 4.6% by 2019.

The press conference with Fed Chairperson Janet Yellen did not tell us too much that we did not know already. She did indicate that most members feel one rate hike is justified before the end of the year. That practically erases any remaining question if the Fed would act in December if they didn?t make a move now. There is a November meeting, but they traditionally do not act when close to a Presidential election.

Overall, the markets have reacted favorably to this afternoon?s events. Stocks had given back some of this morning?s early gains prior to the meeting adjourning but are now showing stronger improvements. The Dow is currently up 111 points while the Nasdaq is up 40 points. The bond market is currently up 8/32 (1.66%), which may be enough of a move for some lenders to improve rates slightly. However, I don?t believe we will see widespread intraday improvements unless bonds improve from their current levels.

We have three pieces of economic data scheduled for tomorrow, but none of them are considered to be highly important. The first of the group will come at 8:30 AM ET when we will get last week?s unemployment update. It is expected to show that 262,000 new claims for unemployment benefits were field last week, up from the previous week?s 260,000. Rising claims is a sign of a softening employment sector, so the larger the number of initial filings, the better the news it is for mortgage rates.

August's Existing Home Sales from the National Association of Realtors will be posted at 10:00 AM ET tomorrow morning. This report will give us an indication of housing sector strength by tracking home resales in the U.S. It is expected to show an increase from July's sales, indicating the housing sector strengthened last month. A housing sector that is growing stronger makes broader economic growth more feasible, making the data bad news for bonds and mortgage rates.

The final report of the week will come from the Conference Board who will post their Leading Economic Indicators (LEI) for August late tomorrow morning also. The moderately important LEI index attempts to measure economic activity over the next three to six months. It is expected to show a 0.1% increase, meaning that it is predicting modest growth in economic activity over the next several months. A larger increase would be considered negative news for bonds and could lead to a small increase in 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]

Thursday?s bond market has opened in positive territory, extending yesterday?s post-FOMC move. Stocks are doing the same with the Dow up another 124 points while the Nasdaq has gained 27 points. The bond market is currently up 7/32 (1.63%), which should improve this morning?s mortgage rates by a little more than .125 of a discount point if comparing to Wednesday?s morning pricing.

The first of this morning?s three pieces of economic data was last week?s unemployment figures. They showed that 252,000 new claims for unemployment benefits were filed last week, down from the previous week?s 260,000 initial filings. Analysts were expecting to see a small increase, not a decline. The lower number indicates that the employment sector strengthened last week instead of slightly weakening. That makes the data bad news for bonds and mortgage rates. Fortunately, this is only a weekly snapshot of the sector and does not carry too much importance.

August's Existing Home Sales report was posted at 10:00 AM ET. The National Association of Realtors announced that home resales fell 0.9% last month, indicating softness in the housing sector. Forecasts were calling for a rise in sales. The decline is good news for the bond and mortgage markets because a weakening housing sector makes broader economic growth more difficult.

The final report of the week was August?s Leading Economic Indicators (LEI) from the Conference Board at 10:00 AM ET. They announced a 0.2% drop, meaning the indicators are pointing towards slower economic activity over the next several months. That is also good news for mortgage rates, but it comes from a report that is not considered to be of high importance. Therefore, while favorable for bonds, it actually has not had much of an impact on today?s trading.

With nothing of importance set for release tomorrow, I would not be surprised to see a relatively quiet day for mortgage rates. Some movement in bonds and stocks can be expected as traders close out positions they may have taken prior to the FOMC events. But unless something unexpected happens, I don?t believe we will see a noticeable move 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... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

 

[Tamalewagon]

Fridays bond market has opened down slightly, following stocks as the week heads to a close. The major stock indexes are showing moderate losses of 49 points in the Dow and 22 points in the Nasdaq. The bond market is currently down 2/32 (1.62%), which should keep this morning?s mortgage rates at yesterdays levels.

Today has nothing of significance to watch. There are a couple of Fed member speaking engagements that by theory could cause movement in the markets. However, following this week?s FOMC events, I don?t see anything surprising coming from any individual member today. I am expecting a pretty quiet day for mortgage rates, although I would not be surprised to see a little movement in the markets as some investors unwind their pre-FOMC positions.

Next week brings us the release of several economic reports that can influence mortgage rates in addition to a couple of Treasury auctions. There is no key data on the calendar, but more than one of the scheduled releases can cause rates move. It is also worth noting that there is at least one event that we will be watching each day of the week.

Monday has a minor housing related report being posted. It likely will have little or no direct impact on mortgage rates unless it shows a significant surprise. Look for details on it and the rest of the weeks mortgage rate-related activities 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... 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]

Mondays bond market has opened in positive territory with stocks starting the week well in negative territory. The major stock indexes are showing sizable losses, pushing the Dow lower by 108 points and the Nasdaq down 27 points. The bond market is currently up 6/32 (1.59%), which with Fridays afternoon gains should improve this morning?s mortgage rates by approximately .125 of a discount point if comparing to Fridays morning pricing.

The week kicked off with the release of Augusts New Home Sales at 10:00 AM ET this morning. The Commerce Department announced that sales of newly constructed homes fell 7.6% last month, indicating weakness in the new home portion of the housing sector. While that is a sizable decline, it was not as much of a decline as analysts were expecting to see. In other words, sales were much weaker in August than they were in July, but not as weak as expected. That makes the data neutral to slightly negative for bonds and mortgage rates.

The rest of the week brings us the release of five more monthly and quarterly economic reports for the markets to digest in addition to two Treasury auctions. None of the data is considered to be key, but several of the reports can directly affect mortgage pricing. There is at least one release set for each day, so we can expect to see a fairly active week in the bond and mortgage markets. This is especially true if stocks show volatility.

Tomorrows only relevant economic data is Septembers Consumer Confidence Index (CCI) at 10:00 AM ET tomorrow morning. This Conference Board index will be posted at 10:00 AM ET and gives us a measurement of consumer willingness to spend. It is expected to show a good-sized decline in confidence from last month's reading, indicating that consumers were less optimistic about their own financial situations than last month. This means they are less likely to make a large purchase in the near future. That is favorable news for the bond market and mortgage rates because consumer spending fuels economic growth. Analysts are calling for a reading of approximately 98.8, down from August's 101.1 reading. The smaller the reading, the better the news for the bond market and mortgage rates.

Also worth noting is that the Treasury will sell 5-year Notes tomorrow and 7-year Notes Wednesday. These sales will tell us if there is an appetite in the markets for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction will come during afternoon trading tomorrow and/or Wednesday.

Overall, Wednesday or Friday are likely to be the most active day for mortgage rates but we could see rates move multiple days. This may not be as active a week as some of the recent ones, but still could bring several days of changes in rates. Therefore, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

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

 

[Tamalewagon]

Tuesdays bond market has opened in positive territory despite stronger than expected economic news. The stock markets are showing noticeable gains with the Dow up 84 points and the Nasdaq up 33 points. The bond market is currently up 5/32 (1.56%), which should improve this mornings mortgage rates slightly if comparing to Mondays morning pricing.

The Conference Board gave us todays only relevant economic data with the release of Septembers Consumer Confidence Index (CCI) at 10:00 AM ET this morning. They announced a reading of 104.1 that was well above forecasts of 98.8. Analysts were calling for a small decline in confidence from August?s level, not an increase. This means surveyed consumers were much more optimistic about their own financial situations than many had thought, making the data bad news for bonds and mortgage rates. That is because rising confidence usually translates into stronger levels of consumer spending, fueling economic growth. Fortunately for mortgage shoppers, this is not considered to be a key piece of data.

There is also the 5-year Treasury Note auction taking place today that may slightly influence mortgage rates. The Treasury will sell 5-year Notes today and 7-year Notes tomorrow. These sales will tell us if there is an appetite in the markets for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET, so if there is a reaction, it will come during early afternoon trading.

Besides the 7-year Note auction tomorrow, we also have Augusts Durable Goods Orders to deal with. This 8:30 AM ET release will give us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Big-ticket products are items that are expected to last three or more years such as appliances, airplanes and electronics. Analysts are expecting to see a decline in new orders, indicating weakness in the manufacturing sector. A larger decline than the 1.9% that is being forecasted should help boost bond prices and cause mortgage rates to drop tomorrow morning because signs of economic weakness make longer-term securities more appealing to investors. However, an increase in new orders would indicate a stronger than expected manufacturing sector that would likely help push mortgage rates higher. It is worth noting that this data is known to be quite volatile from month-to-month, so a slight or moderate variance may not 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... 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]

Wednesdays bond market has opened up slightly, following suit with stocks. The major stock indexes are showing modest gains of 20 points in the Dow and 1 point in the Nasdaq. The bond market is currently up 2/32 (1.55%), which should keep this mornings mortgage rates unchanged from yesterdays morning pricing.

Yesterdays 5-year Treasury Note auction went fairly well with several benchmarks we use to gauge investor interest in the securities showing a pretty decent demand. The bond market had little reaction to the sale yesterday, but those results do allow us to be optimistic about today?s 7-year Note auction. If there is a strong level of interest in todays sale, we may see bonds do well during afternoon trading. On the other hand, a weak auction could lead to pressure in bonds and a slight upward revision to mortgage pricing. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

Todays only important economic data was Augusts Durable Goods Orders at 8:30 AM ET. It showed no change in new orders for big-ticket products from Julys level. That headline is technically bad news for bonds and mortgage rates because analysts were expecting to see a moderate decline in orders. However, a secondary reading that excludes orders for transportation-related products such as new airplanes showed a 0.4% decline that matched expectations. So while overall orders were stronger than predicted, the core products that are less costly and volatile pegged forecasts. That makes the news neutral to slightly negative for bonds and mortgage shoppers.

Tomorrow morning has two pieces of economic data scheduled for release, neither of which is considered to be highly important. The first is the second revision to the 2nd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don't see this revision having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced within the U.S. and is considered the best measurement of economic activity. It is expected to show that the economy grew at an annual rate of 1.3%, up from last month's estimate of 1.1%. The lower the number, the better the news it is for mortgage rates. However, unless there is a significant change in this reading, it likely will not influence mortgage rates.

The other release tomorrow morning is last weeks unemployment update at 8:30 AM ET. It will give us a small snapshot of the employment sector and is expected to show that 259,000 new claims for unemployment benefits were filed last week, up from the previous week?s 252,000. The higher the number of claims, the better the news it is because rising claims indicates a softening labor market. But since this is only a weekly report, it likely will not have much of an impact on mortgage rates either unless it shows a sizable variance from forecasts.

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]

Thursdays bond market has opened in negative territory. The stock markets are showing minor losses with the Dow down 31 points and the Nasdaq down 18 points. The bond market is currently down 5/32 (1.58%), which should push this mornings mortgage rates higher by slightly less than .125 of a discount point.

We saw weakness in bonds late yesterday that caused some lenders to revise rates slightly higher intraday. Yesterday?s 7-year Treasury Note auction took place without much fanfare and was not what pushed bonds lower and mortgage rates higher. The sale appeared to draw an average level of investor interest. Not overly strong or soft. The downward move is extending into this mornings trading.

There were two minor pieces of economic data released this morning, both at 8:30 AM ET. The first was the second revision to the 2nd Quarter Gross Domestic Product (GDP) that came in at up 1.4%. This was an upward revision from the previous estimate of 1.1% and slightly higher than the 1.3% that was expected, indicating the economy was stronger during the April through June months than previously thought. That is technically bad news for bonds and mortgage rates, but because this data is aged now and the current quarter?s reading will be posted next month, the news has had little impact on todays mortgage pricing.

Also released early this morning was last weeks unemployment figures. They showed that 254,000 new claims for unemployment benefits were filed last week. This was an increase from the previous weeks revised total of 251,000 but fell short of the 259,000 that was expected. The increase is favorable to mortgage rates since rising claims is a sign of a weakening employment sector. However, the fact that fewer claims were made than analysts were expecting forces us to label the news neutral-to-slightly negative.

Tomorrow also has two pieces of economic, but they carry more importance than today?s reports did. The first is Augusts Personal Income and Outlays at 8:30 AM ET. It gives us an indication of consumer ability to spend and current spending habits. This is relevant to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. That is negative news for mortgage rates because bonds tend to thrive in weaker economic conditions. It is expected to show an increase of 0.2% in income and a 0.2% increase in spending. If we see weaker than expected readings, the bond market should react positively, leading to lower mortgage rates.

The second report of the day is the University of Michigans revised Index of Consumer Sentiment for September. The preliminary reading that was released earlier this month showed an 89.8 reading. Analysts are expecting to see a slight upward revision, meaning consumer confidence was a bit stronger than previously thought. Waning confidence is good news for bonds because consumers that are concerned about their own financial and employment situations are less likely to make a large purchase in the near future, limiting economic growth. Therefore, a lower than expected reading would be favorable news for bonds and should help improve mortgage rates.

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

 

[Tamalewagon]

Friday?s bond market has opened in negative territory again following mixed economic news. Stocks are helping to pressure bonds with sizable gains in the major indexes. The Dow is currently up 113 points while the Nasdaq has gained 14 points. The bond market is currently down 3/32 (1.56%), but due to strength mid-day yesterday we should see little change in this morning?s mortgage rates if comparing to Thursday?s morning pricing.

There were two pieces of economic data posted this morning. The early release was August's Personal Income and Outlays at 8:30 AM ET. It showed a 0.2% rise in income and no change in the spending reading. The income reading pegged forecasts, indicating that consumers had a little more money to spend than they did in July. However, the flat spending was softer than what analysts were expecting to see (up 0.2%). Since consumers spent less than thought, we can consider the data slightly favorable for mortgage rates. Unfortunately, the early stock rally is preventing much of a reaction to this news.

Also posted this morning was the University of Michigan's revised Index of Consumer Sentiment for September. It was posted just before 10:00 AM ET and showed that the index rose 91.2, exceeding forecasts of 90.0. This means surveyed consumers were more optimistic about their own financial situations than was expected. Since rising confidence usually translates into stronger levels of consumer spending, this was the bad news in this morning?s economic news.

Next week doesn?t have a large number of reports scheduled for release, but does have two key releases that are expected to heavily influence the financial and mortgage markets. One of those comes Monday with the release of September?s Institute of Supply Management?s (ISM) manufacturing index. We will address it and the rest of the week?s 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]

This week brings us the release of four economic reports for the markets to digest with two of those reports being much more important than the others. In addition to the data, there is also a high number of speaking engagements by Federal Reserve members that always draw attention. For the week we can expect to see noticeable movement in rates, but the moves likely will come over just a couple days.

The first release of the week will come from the Institute for Supply Management (ISM), who will post their manufacturing index at 10:00 AM ET tomorrow. This index measures manufacturer sentiment, which is important because it gives us an indication of manufacturing sector strength. It is considered to be one of the more important reports we see each month, partly because it is the first report that tracks the preceding month's activity. Tomorrows release is expected to show a September reading of 50.4, indicating that manufacturer sentiment strengthened from Augusts 49.4 level. This means more surveyed manufacturing executives felt business improved during the month than in August, hinting at manufacturing sector growth. A smaller than expected reading would be good news for bonds and likely lead to lower mortgage rates tomorrow. It is worth noting that a reading below 50.0 is significant because it indicates contraction in the sector.

The second report of the week will be September?s ADP Employment report before the markets open Wednesday. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs of ADPs clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have seen reaction to the report, we should be watching it. Analysts are expecting it to show that 171,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

Augusts Factory Orders data will also be released Wednesday morning. This 10:00 AM Commerce Department report is similar to last week's Durable Goods Orders release except it includes orders for both durable and non-durable goods. It is expected to show a 0.1% rise in new orders from Julys level. A large decline would be good news for the bond market and mortgage rates while an unexpected rise would be bad news and could push rates slightly higher Wednesday morning since it would indicate economic strength. It is worth noting though, that this report is not considered to be highly important to mortgage rates.

The last report of the week is the most important. Friday brings us the release of arguably the most important monthly piece of economic news- the Employment report. The Labor Department will post Septembers employment stats early Friday morning. The report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate, holding at 4.9%, an increase in payrolls of approximately 176,000 and a 0.2% increase in average earnings. Weaker than expected readings should ease concerns about labor market strength and rally bonds enough to improve mortgage rates, especially if the stock markets react poorly to the news.

Overall, the single most important day is Friday but tomorrow is likely to be pretty active also. Tuesday will probably be the calmest day unless something unexpected happens. Besides the relevant economic data set for release three days of the week, the fairly full Fed speaking schedule can also cause volatility in the markets at any time. This leads me to believe that we will see an active week for mortgage rates. Accordingly, please maintain contact with your mortgage professional if still floating a 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]

Tuesdays bond market has opened in negative territory despite a lack of relevant economic data. Stocks are not doing much to influence bonds either with the Dow up 1 point and the Nasdaq up 12 points. The bond market is currently down 7/32 (1.65%), but I do not believe we will see much of a change in this mornings mortgage rates.

Tomorrow brings us the release of two pieces of economic data that we will be watching. Neither is considered to be highly important, but both can cause movement in mortgage pricing if they show unexpected strength or weakness. This is particularly true on a day with nothing that is considered important set to take place or be released.

Septembers ADP Employment report will start the day before the markets open tomorrow (8:15 AM ET). It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs of ADP's clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have seen reaction to the report, we should be watching it. Analysts are expecting it to show that 171,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

Augusts Factory Orders data is the second report of the day. This 10:00 AM Commerce Department report is similar to last weeks Durable Goods Orders release except it includes orders for both durable and non-durable goods. It is expected to show a 0.1% rise in new orders from Julys level. A large decline would be good news for the bond market and mortgage rates while an unexpected rise would be bad news and could push rates slightly higher tomorrow morning since it would indicate economic strength. It is worth noting though, that this report is not considered to be highly important to mortgage rates.

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

 

[Tamalewagon]

Wednesday?s bond market has opened in negative territory with stocks showing sizable gains and no major data to offset them. The Dow is currently up 103 points while the Nasdaq has gained 28 points. The bond market is currently down 9/32 (1.72%), which with yesterday?s afternoon weakness should push this morning?s mortgage rates higher by a little more than .125% of a discount point if comparing to Tuesday?s morning pricing.

The first of this morning?s two pieces of economic data was September?s ADP Employment report at 8:15 AM ET. It showed an increase of only 154,000 private sector jobs, falling short of the 171,000 that was expected. The softer number indicates the private side of the employment sector may be weaker than many had thought, making the data good news for bonds and mortgage rates. However, the muted response in the bond market seems to hint that traders aren?t putting too much weight into the data either. This is one of the reports that, in my opinion, gets more publicity than it usually deserves.

At 10:00 AM ET this morning, the Commerce Department posted August's Factory Orders data. They announced a 0.2% increase in new orders for durable and non-durable goods that slightly exceeded forecasts of a 0.1% rise. This was a minor variance in a moderately important report, so has had little impact on today?s mortgage rates.

Tomorrow?s only economic data will be last week's unemployment figures at 8:30 AM ET. They are expected to show that 258,000 new claims for unemployment benefits were filed last week, up from the previous week?s 254,000 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 since rising claims is a sign of employment sector weakness.

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...

 

[Go-Fly]

The $64K question, when will the Feds start pumping the rates? Has to hold until after the election then, housing is going to crash too? You think the next two years is going to be some good bargain hunting?

 

[Tamalewagon]

The $64K question, when will the Feds start pumping the rates? Has to hold until after the election then, housing is going to crash too? You think the next two years is going to be some good bargain hunting?

Those are indeed the $64K questions. There is not enough information to accurately speculate at this time. If they do raise the rates, the housing market will suffer and there may be some good bargains out there but again...too soon to know at this time.

 

[Tamalewagon]

Fridays bond market has opened up slightly following the release of this mornings major economic news. The stock markets are showing minor losses with the Dow down 36 points and the Nasdaq down 12 points. The bond market is currently up 2/32 (1.73%), which may allow a slight improvement in this morning?s mortgage rates. However, the improvement should be minimal if comparing to Thursdays morning pricing.

Todays big news was Septembers monthly Employment report at 8:30 AM ET. The Labor Department announced that the U.S. unemployment rate rose 0.1% to 5.0% last month while 156,000 new payrolls were added during the month. Analysts were expecting a 4.9% unemployment rate and 176,000 new jobs. Both readings are favorable to bonds and mortgage rates as they indicate weaker conditions than many had thought.

The average hourly earnings reading that has recently showed some concerning growth came in at up 0.2%. That matched forecasts and hasn?t had much of an impact on this mornings bond trading or mortgage pricing. It still will be a focal point in the coming releases to watch for a pickup in wage growth that can fuel broader inflationary pressures.

Overall, I don?t believe today?s report changes anything in regards to the Fed raising key short-term interest rates. As long as there is no significant change in economic activity between now and then, particularly in employment numbers, inflation and spending levels, December is the best bet for another Fed rate hike. There is a possibility of seeing it pushed back to the first meeting of 2017, but in my opinion December is the safest bet at this time.

Next week is a holiday-shortened week with the bond market closed Monday for the Columbus Day holiday, although the stock markets will be open for trading. All markets are open for a full day of trading today. There are a couple of important economic reports set for release late next week. Before we get to those there will be two Treasury auctions and the minutes from the FOMC meeting that may influence mortgage rates. Look for details on the week?s activities 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]

PM or call me directly 866-476-2494 for exact quotes.
___________________________________________
Tuesdays bond market has opened in negative territory following the long weekend. The stock markets are also starting the week in negative territory with the Dow down 87 points and the Nasdaq down 31 points. The bond market is currently down 13/32 (1.76%), which should push this mornings mortgage rates higher by a little more than .125 of a discount point over Fridays morning pricing.

There is nothing of importance scheduled today that is expected to affect mortgage rates. Tomorrow morning also does not have any data that we need to watch. However, tomorrow afternoon brings us two events that may influence rates. One is the minutes from the most recent FOMC meeting at 2:00 PM ET tomorrow. These may move the markets or could be a non-factor, depending on what they say. The key points traders are looking for are concerns over our and the global economies, inflation and the Feds next monetary policy move (rate hike). It is worth noting though that the last FOMC meeting was followed by revised economic predications and a press conference with Fed Chair Yellen. Therefore, the likelihood of seeing a significant surprise in the minutes is relatively low.

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

Overall, it appears Friday is an easy label for the most important day of the week with two highly important reports being posted (Retail Sales and PPI), although tomorrow afternoon could be active also. In addition to the economic data, there are many companies posting earning reports during the week, including some big names. If the corporate earnings releases are generally weaker than forecasts, stocks may suffer, making bonds more appealing to investors. The end result would likely be an improvement in rates. The flip side though is stronger than expected earnings that drive stocks higher, pushing bond prices lower and mortgage rates upward. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate because this will probably be a pretty active week for the financial and mortgage markets.

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

Looks like tomorrow may be a good day to lock if you are in the market.

Wednesdays bond market has opened in negative territory again as the negative momentum in bonds continues. The major stock indexes are showing minor gains of 43 points in the Dow and 3 points in the Nasdaq. The bond market is currently down 7/32 (1.79%), which should push this morning?s mortgage rates higher by approximately .125 - .250 of a discount point.

This morning has nothing of importance set for release, but we do have a couple of afternoon events taking place that have the potential to influence mortgage rates. First up is the 10-year Treasury Note auction results at 1:00 PM ET. If today?s sale was met with a strong demand from investors, we should see the broader bond market react positively, possibly leading to a slight improvement in mortgage pricing before the end of the day. On the other hand, a weak interest in the securities could cause bond selling and an upward revision to rates. Today?s sale will be followed by tomorrow?s 30-year Bond auction.

Next will be the minutes from the most recent FOMC meeting at 2:00 PM ET. These may move the markets or could be a non-factor, depending on what they say. The key points traders are looking for are concerns over our and the global economies, inflation and the Fed's next monetary policy move (rate hike). It is worth noting though that the last FOMC meeting was followed by revised economic predictions and a press conference with Fed Chair Yellen. Therefore, the likelihood of seeing a significant surprise in the minutes is relatively low.

Tomorrows only report will be last weeks unemployment figures. They are expected to show that 255,000 new claims for unemployment benefits were filed last week, up from the previous weeks 249,000. The larger the number of claims, the better the news it is for bonds and mortgage rates because rising claims is a sign of a softening employment sector. However, this is only a weekly snapshot of the sector, so its influence on mortgage rates is often weak 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... 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...

 

[BMABITY]

Company's like CashCall, with their no closing cost refinance loans.

How do they make any money, is it the interest accumulated from the person paying the loan, or do they sell the loan and make a small profit?

Is it in fact a no cost loan to the customer or is there cost hidden?

Always makes me scratch my head when a finance company offers something at no cost, how do they end up making any money?

 

[240Hallett]

Company's like CashCall, with their no closing cost refinance loans.

How do they make any money, is it the interest accumulated from the person paying the loan, or do they sell the loan and make a small profit?

Is it in fact a no cost loan to the customer or is there cost hidden?

Always makes me scratch my head when a finance company offers something at no cost, how do they end up making any money?

There is actually no cost but you will have "prepaid" costs like prop tax and insurance for x amount of days till the end of the month. But you get those back (on a refi) from your existing escrow account. So you're getting the loan for free.

 

[Tamalewagon]

Company's like CashCall, with their no closing cost refinance loans.

How do they make any money, is it the interest accumulated from the person paying the loan, or do they sell the loan and make a small profit?

Is it in fact a no cost loan to the customer or is there cost hidden?

Always makes me scratch my head when a finance company offers something at no cost, how do they end up making any money?

Typically you get a higher rate than a "par" rate. The higher the rate with less fee's equals more credit to the lender. Don't be fooled...they exact their pound of flesh one way or another. You'll pay more over the life of the loan for a "no cost" loan than if you pay the 3rd party closing costs. Nothing is ever "free".

 

[Tamalewagon]

Thursdays bond market has opened in positive territory due to heavy selling in stocks. The major stock indexes are showing significant losses of 181 points in the Dow and 67 points in the Nasdaq. The bond market is currently up 8/32 (1.74%), which should improve this mornings mortgage rates by approximately .125 of a discount point.

Yesterdays 10-year Treasury Note auction went fairly well with the benchmarks we to gauge their success showing above average demand for the securities. The news did not have too much of an impact on mortgage rates yesterday afternoon, but it does allow us to be optimistic about todays 30-year Bond auction. If todays sale is met with a strong demand from investors, we could see bond prices improve this afternoon, possibly leading to a slight improvement in mortgage pricing.

Also yesterday afternoon was the release of the minutes from the most recent FOMC meeting. The most important point they showed was not really a surprise. They indicated that several Fed members felt a rate hike at last month?s meeting could be justified. The discussions held makes it very likely that we will see a Fed rate hike before the end of the year. The Fed is considered to be non-political and their decisions are supposed to follow suit. That technically means that a rate hike should be a possibility at November?s FOMC meeting. However, there is a wide consensus that they will follow tradition by not making a move so close to a Presidential election. This leaves a December rate hike all but a given unless something totally unexpected happens between now and then.

Todays only economic data was last week?s unemployment figures at 8:30 AM ET. They showed that 246,000 new claims for unemployment benefits were filed last week, unchanged from the previous weeks revised total. That is a sign the employment sector remained flat last week, making the data slightly negative for bonds and mortgage rates because analysts were expecting to see an increase. Fortunately, this is only a weekly report and had little impact on today?s trading.

Tomorrow has three economic reports for us to watch, starting with Septembers Retail Sales report at 8:30 AM ET. This highly important data measures consumer level sales and is very important to the markets because consumer spending makes up over two-thirds of the U.S. economy. If consumer level spending is strong, overall economic growth is likely to be stronger, making bonds less attractive to investors. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates will probably improve tomorrow morning. Current forecasts are calling for a 0.6% increase in sales. Good news for the bond market and mortgage pricing would be a much smaller increase.

Also set for release early tomorrow is Septembers Producer Price Index (PPI). This index measures inflationary pressures at the manufacturing level of the economy and is also considered to be highly important to the bond market. Analysts are expecting to see a 0.2% rise in the overall index and an increase of 0.1% in the more important core data reading. A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bonds future fixed interest payments. Unexpected growth in inflation also makes a Fed rate hike likely to be sooner than later. When inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

The last release of the week will be posted by the University of Michigan late tomorrow morning. Their Index of Consumer Sentiment for October will give us an indication of consumer confidence, which helps us measure consumers' willingness to spend. If consumer confidence in their own financial situation is rising, they are more apt to make large purchases. But, if they are growing more concerned about their job security or finances, they probably will delay making that large purchase. This influences future consumer spending data and can impact the financial markets. It is expected to show a reading of 92.4, meaning confidence rose from September's level of 91.2. A decline would be considered favorable news for bonds and mortgage rates because waning consumer spending usually translates into slower economic growth.

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...

 

[rivermobster]

So Holly's realtor was so impressed with you, he says he will recommend you for every transaction he does.

Nice work bro! And thank you. 👍

 

[milkmoney]

Hey. I got a ?
Why is a 5 year arm bad ??

 

[Tamalewagon]

Hey. I got a ?
Why is a 5 year arm bad ??

Who says it's bad Dave? Every loan option has a purpose. If someone is only going to be in a property for 5 years, that's a great option. It has lower rates than the 30 fixed. I typically don't recommend it unless we have a client that fits that specific bill.

 

[Tamalewagon]

So Holly's realtor was so impressed with you, he says he will recommend you for every transaction he does.

Nice work bro! And thank you. 

Thank you Joe. I appreciate the referral a great deal brother. :thumbsup

 

[Go-Fly]

Those are indeed the $64K questions. There is not enough information to accurately speculate at this time. If they do raise the rates, the housing market will suffer and there may be some good bargains out there but again...too soon to know at this time.

Sounds like they are going to give it a 1% bump in December. I think they will try another half in January. The Feds can not keep printing money.:eek

 

[867-5309]

Sounds like they are going to give it a 1% bump in December. I think they will try another half in January. The Feds can not keep printing money.:eek

1%? They can't even decide if they are going to raise it a 1/4% let alone 1!

 

[pronstar]

A 1% jump would kill the economy IMHO

We're barely sputtering along at 0, and some countries are negative.

 

[867-5309]

Company's like CashCall, with their no closing cost refinance loans.

How do they make any money, is it the interest accumulated from the person paying the loan, or do they sell the loan and make a small profit?

Is it in fact a no cost loan to the customer or is there cost hidden?

Always makes me scratch my head when a finance company offers something at no cost, how do they end up making any money?

They're making plenty of money. Trust me. They will bundle the loan, service it for a couple of years and sell it off as AAA paper. Ever notice how you can get a loan, and then they sell it to Wells Fargo and the rate you got was lower than Wells Fargo could even quote you? It's called taking away the salary, incentive, and other costs associated with that retail Wells Fargo employee. They'd rather buy a portfolio of $30 million portfolio from CashCall than write a $250,000 loan directly.

Cash Call is legit.

 

[Tamalewagon]

Fridays bond market has opened in negative territory following the release of mixed economic news. The stock markets are showing early strength with the Dow up 149 points and the Nasdaq up 42 points. The bond market is currently down 5/32 (1.76%), but I don?t believe that will be enough to move this mornings mortgage rates, keeping them at yesterdays early levels.

The first of this morning?s three relevant economic releases was September's Retail Sales report at 8:30 AM ET. The Commerce Department announced a 0.6% increase in retail level sales last month. While this is a noticeable increase that points towards stronger economic growth, it actually pegged forecasts. The same can be said about a secondary reading that excludes more volatile and costly auto transactions. If those sales are excluded, there was a 0.5% rise that also matched expectations. Therefore, we are considering the data to be neutral to slightly negative for mortgage rates.

Septembers Producer Price Index (PPI) was also posted early this morning and as with the sales report, is considered to be highly relevant to the bond and mortgage markets. It showed a 0.3% increase in the overall reading and 0.2% rise in the more important core data that does not included volatile food and energy costs. Analysts were expecting to see increases of 0.2% and 0.1% respectively. This means inflationary pressures at the producer level of the economy were slightly stronger last month than expected, making the data negative for bonds and mortgage pricing.

The third report of the day and the final release of the week came just before 10:00 AM ET when the University of Michigan posted their Index of Consumer Sentiment for October. It came in at 87.9, falling well short of the 92.4 that was expected. This means surveyed consumers were not nearly as optimistic about their own financial situations as many had thought. That is favorable news for bonds because waning confidence usually translates into weaker levels of consumer spending that fuels economic growth.

Next week has a handful of reports scheduled that we will be watching, starting with Mondays mid-morning release of September?s Industrial Production data. There is only one highly important report in the batch. Look for details on it and the rest of the week?s 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]

Mondays bond market has opened in positive territory, erasing late Friday selling. Stocks are starting the week with fairly minor losses, pushing the Dow lower by 41 points and the Nasdaq down 13 points. The bond market is currently up 9/32 (1.77%), but due to weakness late Friday we likely will see little change in this mornings mortgage rates. If your lender did revise higher Friday afternoon, you should see an improvement this morning of about the same amount.

Today did have a relevant piece of economic data. That was Septembers Industrial Production report at 9:15 AM ET. It showed a 0.1% increase in output at U.S. factories, mines and utilities. Forecasts were calling for a 0.2% rise but since this is a moderately important report, the variance was not enough to have much of an impact on this mornings mortgage pricing.

Tomorrow also has one report that we will be watching, but it is much more important to the bond market than todays report was. Septembers Consumer Price Index (CPI) will be released at 8:30 AM ET tomorrow. It measures inflationary pressures at the very important consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a 0.3% increase in the overall index and an increase of 0.2% in the core data. A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bond's future fixed interest payments. When inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

Overall, no particular day stands out as key for the week. We will likely see small moves in rates several days instead of a large move one or two days. The least active day could be Friday since it is the only day of the week with no relevant data set for release. Still, large moves in stocks or geopolitical/financial news can cause the markets to become active any day. Therefore, it still would be prudent to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

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