Mortgage Market Update/Purchase and Refinance Mortgage info

[Tamalewagon]

Doug Duncan on Fed rate hike




Fannie Mae?Wednesday, December 14, 2016

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?The outcomes from today?s Fed meeting held little surprise. The updated ?dot plot,? which now implies three expected rate hikes next year compared with two in September, could be viewed as a sign of a more hawkish stance. However, we shouldn?t give this projection too much weight, given that, at one point, the dot plot signaled four rate increases in 2016 versus the one that actually materialized. Much of the upbeat financial data, including the jumps in interest rates, the dollar, and equity prices, are largely due to the anticipation of stronger economic growth from suggested fiscal stimulus and deregulation from the new Administration and Congress. Whether that bullish view will come to fruition hinges on the priorities of the incoming President and the willingness of Congress, as candidate Trump also campaigned on anti-growth trade policy. The Fed will likely be in wait-and-see mode given this substantial policy uncertainty, and we view this prudency a virtue.? - Doug Duncan, Fannie Mae Chief Economist

 

[Tamalewagon]

Ahhh...back in the saddle.

Tuesdays bond market has opened well in negative territory, starting the new year in the same fashion last year wound down. Stocks are kicking off the year with solid gains of 131 points in the Dow and 48 points in the Nasdaq. The bond market is currently down 15/32 (2.50%), but due to strength before closing Friday we should see an increase of only .125 of a discount point in this morning?s mortgage rates if comparing to Fridays early pricing. The financial and mortgage markets were closed yesterday in observance of the New Years holiday.

The Institute for Supply Managements (ISM) manufacturing index for December was todays only relevant data, but it was an important release. It showed a reading of 54.7 that exceeded forecasts (53.6) and November?s reading (53.2). This means that manufacturer sentiment was stronger than expected and rose from November?s level. Because that is a sign of strength in the manufacturing sector, it is considered bad news for bonds and mortgage rates.

The rest of the week brings us the release of three more monthly economic reports that we will be watching, including the single most influential monthly release. In addition to these reports, we also will get the minutes from the last FOMC meeting that have the potential to impact the bond market and quite possibly mortgage rates.

Tomorrow has two of those items, beginning with the ADP Employment report at 8:15 AM ET, which has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report tracks changes in private-sector jobs of the companys clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on our calendar. Forecasts are calling for an increase of 170,000 new payrolls. Good news for mortgage rates would be a much smaller increase in payrolls.

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

Overall, Friday is the key day of the week with the almighty Employment report being posted, but as expected, today was active also. The least active day will likely end up being Thursday. Please keep an eye on the markets and maintain contact with your mortgage professional if still floating an interest rate as a couple of this weeks events have the potential to cause severe market volatility.

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

 

[Tamalewagon]

Wednesday?s bond market has opened down slightly as investors prepare for this week?s key data. The stock markets are showing minor gains with the Dow up 18 points and the Nasdaq up 24 points. The bond market is currently down 3/32 (2.45%), but due to strength late yesterday we should see a slight improvement in this morning?s mortgage rates if comparing to Tuesday?s early pricing.

It turns out we don?t have anything being released this morning that is expected to affect mortgage rates. This is because the release of the ADP Employment report was pushed to tomorrow morning. That leaves today?s only event this afternoon?s FOMC minutes. They will give market participants insight to the Fed's thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what they show. They will be released at 2:00 PM ET, so they won't affect the markets or mortgage rates until afternoon hours. The last FOMC meeting was followed by revised Fed forecasts and a press conference by Fed Chair Janet Yellen, so the possibility of seeing something unexpected is minimal. Still, market participants will be looking for any tidbits about the decision to raise key short-term interest rates and when the next move may be made.

Tomorrow has two releases, beginning with the rescheduled ADP Employment report at 8:15 AM ET. This report has the potential to cause some movement in the markets if it shows much stronger or weaker numbers as it tracks changes in private-sector jobs of the company's clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on our calendar. Forecasts are calling for an increase of 170,000 new payrolls. Good news for mortgage rates would be a much smaller increase in payrolls.

Also being posted tomorrow is last week?s unemployment figures. They are expected to show that 265,000 new claims for unemployment benefits were filed last week, unchanged from the previous week. Since rising claims hint at employment sector weakness, the higher the number we see, the better the news it is for mortgage rates. However, because this is only a weekly report and comes right before the monthly report (Friday), it likely will have little impact on tomorrow?s mortgage rates unless it shows a significant change.

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

 

[Tamalewagon]

Thursdays bond market has opened in positive territory following mixed results in todays minor economic releases. Stocks are mixed with the Dow down 11 points and the Nasdaq up 10 points. The bond market is currently up 6/32 (2.41%), which should improve this morning?s mortgage rates by approximately .125 - .250 of a discount point.

Yesterdays afternoon release of the FOMC minutes initially had a negative impact on the bond market, but then bonds rallied before closing. The most important point the minutes showed was that some Fed members feel key short-term interest rates may need to be raised at a faster pace than previously thought based on President-elect Trumps plans for spurring economic growth. That is just a theory at this point and fortunately bonds didn?t seem to concerned with the news. There were a few lenders that improved their rates before the end of the day yesterday, so if yours is one of them you may not see as much of an improvement in this mornings pricing.

The first of todays two pieces of economic data was Decembers ADP Employment report at 8:15 AM ET. It showed that 153,000 new private sector jobs were added last month, falling short of the 170,000 that was expected. This is good news for bonds and mortgage rates because it indicates the employment sector may have been softer than many had thought. Confirmation of this will come in tomorrows governmental report.

Last weeks unemployment figures were also posted this morning, revealing 235,000 new claims for unemployment benefits. This was much lower than forecasts and was the fewest number of filings since November 1973. While that points toward a strengthening employment sector, it contradicts the ADP report. Therefore, we have actually seen little reaction to this mornings data.

The big news of the week will come at 8:30 AM tomorrow when the Labor Department posts the almighty Employment report for December. This report is arguably the single most important monthly release we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a decline in payrolls and flat earnings would be ideal news for the bond market. Current forecasts call for a 0.1% increase in the unemployment rate, bumping it to 4.7% while 175,000 new jobs added to the economy and an increase in earnings of 0.%. If we see weaker than expected results, the bond market should rally and stocks should fall, improving mortgage rates noticeably tomorrow. However, stronger than expected readings will likely raise optimism about the economy, pushing stocks and mortgage rates higher.

Novembers Factory Orders report will be posted at 10:00 AM ET tomorrow, although it likely is not going to draw much attention. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted just before Christmas, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as appliances, electronics and airplanes. Examples of non-durable goods are food and clothing. Analysts are expecting to see a decline of 2.1% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it usually can influence bond trading enough to create a minor change in rates if it shows a sizable variance from forecasts. The larger the decline, the better the news it is for mortgage pricing. Primary focus will be on the Employment report though.

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

Friday?s bond market has opened in negative territory following mixed results in today?s major economic release. Stocks are pretty calm during early trading, showing minor gains in the major indexes. The Dow is currently up 8 points while the Nasdaq has gained 19 points. The bond market is currently down 15/32 (2.40%), but due to a rally in bonds late yesterday, we still should see an improvement of approximately .125 of a discount point in this morning?s pricing if comparing to Thursday?s early rates.

Today?s big news was December?s Employment report at 8:30 AM ET. It showed that the U.S. unemployment rate rose 0.1% to 4.7% as expected. There were 156,000 new jobs added to the economy last month, falling short of the 175,000 that was forecasted. These two readings actually are favorable for bonds and mortgage rates as the unemployment rate matched forecasts and the softer than predicted payroll number means the employment sector was not as strong as thought.

The bad news came in the average earnings reading that again showed an increase that exceeded expectations of 0.3%. The 0.4% rise in earnings fuels concern over wage inflation that can easily affect the economy on a wider scale, making it bad news for bonds and mortgage rates. This was mentioned previously here, warning that it would become an issue if future reports showed similar results. I strongly believe we will hear more on this topic in the immediate future and it could have a negative impact on the bond market.

November?s Factory Orders report was also posted this morning, showing a 2.4% decline in new orders for both durable and non-durable goods at U.S. factories. This was fairly close to forecasts of a 2.1% drop in orders, so has had no impact on today?s bond trading or mortgage pricing.

Next week has only a few economic reports that we need to watch, but two of them are very important to the bond and mortgage markets. All the week?s data comes late in the week. Mid-week we have a couple of Treasury auctions that will come into play in addition to some Fed member speaking engagements. Monday has nothing of importance scheduled. Look for details on all of 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... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

 

[Tamalewagon]

Thursdays bond market has opened well in positive territory as bonds open in selling mode. The major stock indexes are showing sizable losses, pushing the Dow lower by 148 points and the Nasdaq down 55 points. The bond market is currently up 15/32 (2.31%), which should improve this morning?s mortgage rates by approximately .250 of a discount point if comparing to Wednesdays morning pricing.

Yesterdays 10-year Treasury Note auction went extremely well with many benchmarks showing a strong level of interest in the securities. That led to bonds improving immediately after results were posted at 1:00 PM. They did give back some of their post-auction gains before the end of the day, but overall it was a good afternoon for the bond market and mortgage rates.

Last weeks unemployment update was today?s only relevant economic report. The 8:30 AM ET release showed that 247,000 new claims for unemployment benefits were filed last week. This was an increase from the previous week?s revised 237,000 initial filings. Analysts were expecting to see 255,000 claims. So, while the increase is good news for bonds because it points towards a weakening employment sector, the number was still lower than expectations. Therefore, we can consider the data neutral for the mortgage market.

We also have todays 30-year Bond auction to watch. Results in this sale will also be posted at 1:00 PM ET. Another very strong auction could help boost bond prices and lower mortgage rates slightly this afternoon.

Tomorrow has all three of this weeks monthly reports. The first is December's Retail Sales data at 8:30 AM ET. This Commerce Department report measures consumer spending by tracking sales at U.S. retail level establishments. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely. Rising consumer sales fuels expectations for broader economic growth that makes long-term bonds less attractive to investors. Current forecasts are calling for a 0.7% increase in December's sales. A smaller increase would be good news for bonds and mortgage rates because it would hint at weaker than thought economic growth.

The second report of the day is December's Producer Price Index (PPI) at 8:30 AM ET. The PPI is important to the markets and mortgage rates because it measures inflationary pressures at the producer level of the economy. Analysts are expecting to see a 0.3% rise in the overall reading and a 0.1% increase in the more important core reading that excludes volatile food and energy prices. A larger than expected increase in the core reading could mean higher mortgage rates since strengthening inflation is bad news for the bond market. It erodes the value of a bond's future fixed interest payments, making them less appealing to investors. Accordingly, they are sold at a discount to offset the drop in value, which drives their yields higher. And since mortgage rates follow bond yields, rising inflation usually translates into higher interest rates for borrowers.

The final report of the week is January's preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to slightly change mortgage rates. If consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future, fueling economic growth. Good news would be a reading weaker than December's 98.2 that means consumers are less likely to make a large purchase in the immediate future.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... 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 again, extending yesterday?s late sell-off. Stocks are mixed yet again with the Dow down 30 points and the Nasdaq up 3 points. The bond market is currently down 14/32 (2.47%), which should push this morning?s mortgage rates higher by approximately .250 of a discount point on top of the same sized increase you likely saw yesterday afternoon before closing. Overall, this mornings rates should be close to .500 of a discount point higher than Wednesdays morning pricing.

Yesterday afternoons release of the Federal Reserves Beige Book was not the cause of the late bond selling, but it did not do anything to stop it either. Bonds were always sliding lower by the time the report was posted at 2:00 PM ET. Unfortunately, what the report showed only contributed to the selling and upward move in rates. The release revealed that prices rose in many regions since the last update, fueling the theory that inflation is ramping up. It also indicated that the labor market remained tight in most Fed regions. Neither bits of info came as a significant surprise, although both are negative for bonds and mortgage rates.

The first of this mornings two minor 8:30 AM ET releases showed that 234,000 new claims for unemployment benefits were filed last week, down noticeably from the previous week?s revised 249,000. Analysts were expecting to see an increase in initial claims, not a decline. This is bad news for mortgage rates because falling initial filings is a sign of employment sector strength.

Decembers Housing Starts was also posted early this morning. It showed an 11.3% increase in new home groundbreakings, exceeding forecasts. The large increase points towards a strengthening new home portion of the housing sector. That makes the data negative for bonds and mortgage rates.

Tomorrow has no relevant economic data set for release. There are a couple of Fed member speaking engagements, but I do not see them causing much concern or excitement in the markets. Their words always have the potential to bring a reaction in the markets, so we do watch them. However, I don?t believe either of them will be a market mover 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... Float if my closing was taking place over 60 days from now...

 

[Tamalewagon]

Mondays bond market has opened in positive territory to start the week with an improvement in rates. Stocks are showing modest losses of 18 points in the Dow and 2 points in the Nasdaq. The bond market is currently up 8/32 (2.43%), which should improve this mornings mortgage rates by approximately .250 of a discount point if comparing to Fridays early pricing.

There is nothing if importance scheduled for release today. However, the rest of the week has six economic reports that we will be watching in addition to a couple of Treasury auctions. The most important data will come late in the week, but the earlier events can still lead to minor changes in mortgage rates.

Decembers Existing Home Sales report from the National Association of Realtors will start the weeks events at 10:00 AM ET tomorrow morning. This data will give us a measurement of housing sector strength and mortgage demand by tracking home resales in the U.S. It is expected to show a decline in sales from Novembers level, meaning the housing sector softened last month. Ideally, bond traders would like to see a large decline in sales that would point toward sector weakness because a weaker housing makes broader economic growth more difficult. However, as long we don't see a significant surprise in its results, it should not have a noticeable impact on tomorrow?s mortgage rates.

Overall, Friday is likely to be the most active day for mortgage rates with three reports set, including two that are very important. The rest of the week has little to be concerned with or excited about. Stocks may play a heavy role in bond direction if they make a move higher or lower the next few days. It appears that we may have a fairly calm week in the bond and mortgage markets, but it is strongly recommended that you maintain contact with your mortgage professional if still floating an interest rate and closing in the near future as the markets can get active at any moment.

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]

Tuesdays bond market has opened in negative territory, erasing yesterdays gains. The major stock indexes are showing minor gains, pushing the Dow higher by 35 points and the Nasdaq down by 14 points. The bond market is currently down 10/32 (2.43%), which should cause this mornings mortgage rates to be slightly higher than Mondays early pricing. If your lender revised rates lower yesterday afternoon, you should see more of an increase in todays rates.

Todays only relevant economic data was Decembers Existing Home Sales at 10:00 AM ET. The National Association of Realtors announced a 2.8% decline in home resales last month. This was a larger decline than analysts were expecting, making the headline number good news for bonds and mortgage pricing. However, the drop in sales is being attributed to the smallest supply of available homes since 1999. Also, a sizable upward revision to Novembers sales pushed them to the highest level since February 2007. The end result was a slightly negative impact on this mornings bond trading and mortgage rates.

Tomorrow has no relevant economic data being released, but it does bring us the first of this weeks two relatively important Treasury auctions. The Treasury will auction 5-year and 7-year Notes tomorrow and Thursday respectively. If the sales are met with a strong demand from investors, the broader bond market may improve during afternoon hours. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates mid-afternoon tomorrow and/or Thursday.

Thursday has a couple of minor pieces of economic data to watch, but Friday brings the important reports. There will be three reports posted Friday morning that will likely influence mortgage rates. Two of them, Durable Goods Orders and the initial 4th Quarter GDP readings are considered very important to the financial and mortgage markets.

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

 

[Tamalewagon]

Wednesdays bond market has opened in negative territory with stocks showing strong gains. The Dow is currently up 144 points, breaking above the 20,000 threshold, while the Nasdaq has gained 41 points. The bond market is currently down 10/32 (2.49%), which should push this mornings mortgage rates higher by approximately .250 if comparing to Tuesdays morning pricing.

There is nothing of importance taking place this morning, but we do have the first of this weeks two relatively important Treasury auctions taking place today. 5-year Treasury Notes will be sold today while 7-year Notes go tomorrow. If the sales are met with a strong demand from investors, the broader bond market may improve during afternoon hours. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

There are three reports set for release tomorrow morning. The first will be last weeks unemployment figures at 8:30 AM ET that are expected to show 246,000 new claims for unemployment benefits were filed. This would be an increase from the previous weeks 234,000 initial filings. Since rising claims is a sign of a weakening employment sector, the higher the number the better the news it is for mortgage shoppers. However, because this is only a weekly report, it usually takes a significant variance from forecasts for the number to directly impact mortgage rates.

The second of the morning will be Decembers New Home Sales that is considered to be the sister release to yesterday's Existing Home Sales report. This 10:00 AM ET release will also give us insight into the housing sector, but tracks a much smaller portion of home sales. Current forecasts are calling for a small decline in sales of newly constructed homes. It is worth noting though that this data is not important enough to heavily influence mortgage pricing unless it varies greatly from forecasts.

Decembers Leading Economic Indicators (LEI) will also be released at 10:00 AM. The Conference Board, who is a New York-based business research group, compiles the data and releases this report. It attempts to predict economic activity over the next several months, but since it is posted by a non-governmental agency, it is not considered to be of high importance to the financial and mortgage markets. Tomorrow's release is expected to show a 0.4% increase, meaning the indicators are predicting growth in economic activity over the next several months. As long as we don't see a much stronger than predicted increase, I don't think this data will have much of an influence on mortgage pricing either.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... 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 negative territory despite some bond-friendly economic news. Stocks are mixed but calm with the Dow up 32 points (20,100) and the Nasdaq down 2 points. The bond market is currently down 8/32 (2.54%), which should push this morning?s mortgage rates higher by approximately .250 of a discount point. Some of that may have come yesterday afternoon when bonds weakened.

Yesterday?s 5-year Treasury Note auction went quite poorly with several benchmarks we use to gauge investor demand showing a weak level of interest in the securities. Bonds initially weakened after results were posted at 1:00 PM ET, but did recover that move before closing. The lack of interest in yesterday?s auction doesn?t give us much to be optimistic about in today?s 7-year Note sale. Results will be posted at 1:00 PM today also, so any reaction will come during early afternoon trading.

The first of this morning?s three economic releases came at 8:30 AM ET. The weekly unemployment update showed that 259,000 new claims for unemployment benefits were filed last week. This was higher than expected and a good-sized increase from the previous week?s revised 237,000. Because rising claims is a sign of a softening employment sector, today?s news is favorable for bonds and mortgage rates. Unfortunately, since it is only a weekly snapshot, it has not had a heavy impact on today?s mortgage pricing.

The second release was December's New Home Sales at 10:00 AM ET that showed a 10.4% decline in sales of newly constructed homes. That was weaker than many had expected, indicating softness in the new home portion of the housing sector. As with the weekly unemployment figures, this is good news for bonds and mortgage rates. The problem is that it is also not considered to be highly important data, minimizing the impact it has on this morning?s trading and mortgage pricing.

December's Leading Economic Indicators (LEI) was the final release of the day. The Conference Board announced a 0.5% increase, pegging forecasts. The rise means the indicators are predicting moderate economic growth over the next several months. While that is not good news for mortgage rates, it matched expectations and this is also considered to be a minor report. That has prevented it from having an influence on today?s trading.

Tomorrow brings us the big news of the week with two important economic reports early and a third release late morning that is considered to be moderately important. The day will start with what is arguably the single most important economic report that we see regularly. This would be the initial quarterly Gross Domestic Product (GDP) reading. Tomorrow's release is the first of three we will get for the 4th quarter. This data is so important because it is considered to be the best measurement of overall economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. This initial reading will be followed by two revisions, each released approximately one month apart. Last quarter's first reading, which usually carries the most significance, is expected to show the economy grew at an annual rate of 2.2%. A noticeably weaker reading would be great news for the bond market, questioning the strength of our economy. That would likely fuel stock selling and a rally in bonds that should push mortgage rates lower tomorrow morning. However, a larger than expected increase, indicating the economy was stronger than thought, will probably cause bond selling that leads to higher mortgage rates.

Next is December's Durable Goods Orders, also at 8:30 AM ET. It helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. These are also known as big-ticket items and include things such appliances, electronics and airplanes. The data is known to be quite volatile from month-to-month, so a large headline number isn?t necessarily a concern. It is expected to show a rise in orders of 3.0%. A large drop in orders would be considered good news for bonds and mortgage rates. Even though this an important report, a slight variance likely will have little impact on tomorrow's mortgage pricing because of the large swings that are common in the data. The large decline that would indicate weakness in the manufacturing sector and be good news for mortgage rates.

The final economic report of the week is the revised reading to the University of Michigan's Index of Consumer Sentiment just before 10:00 AM ET. This index is another measurement of consumer confidence that is thought to indicate consumer willingness to spend. I don't see this data having much of an influence on the markets or mortgage rates because of the importance of the first two releases. Analysts are expecting to see little change from the preliminary reading of 98.1. A large increase would mean consumers are more likely to make a large purchase in the near future, fueling 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...

 

[Tamalewagon]

Fridays bond market has opened in positive territory following mostly favorable economic news. Stocks are showing minor losses, pushing the Dow lower by 21 points and the Nasdaq down 6 points. The bond market is currently up 6/32 (2.49%), which should improve this morning?s mortgage rates by approximately .250 of a discount point from Thursdays early pricing. Many lenders improved rates intraday yesterday as bonds strengthened, so if your lender did make that move you should see less of an improvement in todays pricing.

The first of this mornings three pieces of data was the initial reading of the 4th Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It showed that the economy grew at an annual rate of only 1.9% last quarter, falling short of the 2.2% that was expected. This means that the U.S. economy was not as strong as many had expected, making the data good news for bonds and mortgage rates.

Also posted early this morning was Decembers Durable Goods Orders that showed a 0.4% decline in new orders for big-ticket products. This was well below forecasts of a 3.0% increase in orders, pointing towards weaker manufacturing activity. The headline reading is favorable for the bond and mortgage markets even though this data is known to be quite volatile. However, a secondary reading dampens that news somewhat. If transportation-related orders such as airplanes are excluded, new orders rose 0.5%, matching expectations. The headline number is enough for us to still call this report good news for mortgage rates though.

The final report of the week was the revised University of Michigan's Index of Consumer Sentiment late this morning. This index is a measurement of consumer confidence that is thought to indicate consumer willingness to spend. Todays release revealed a reading of 98.5 for January. This was a little higher than the previous estimate of 98.1 and analysts were calling for little change. Therefore, this is the slightly negative piece of data in this mornings batch. But fortunately, it was the least important of the days three releases and has not had much of an impact on todays trading.

Next week is an extremely important and busy week for the financial and mortgage markets. It is packed with data, some being key major reports, and also has the first FOMC meeting of the new year. We have a pretty important release early Monday in Decembers Personal Income and Outlays report to start the week. Look for details on all of next weeks activities in the 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 up slightly despite heavy selling in stocks as they react to weekend political news. The major indexes are showing sizable losses with the Dow down 174 points and the Nasdaq down 77 points. The bond market is currently up 2/32 (2.48%), which may be enough to slightly improve this mornings mortgage rates. If there is an improvement in today?s pricing, it likely is minimal.

Decembers Personal Income and Outlays data kicked off this week?s calendar at 8:30 AM ET. The Commerce Department announced a 0.3% rise in income while spending rose 0.5%. The income reading fell just short of the 0.4% that was expected (good news) but the rise in spending was stronger than the 0.4% that analysts were calling for (bad news). The results mean that consumers had less money to spend than thought, but actually spent more than expected. Therefore, we are considering the data neutral towards bonds and mortgage rates.

The rest of the week is extremely busy with seven more economic reports for the markets to digest, including two highly important releases. In addition to the data, there is also an FOMC meeting that definitely has the potential to disrupt the markets.

Tomorrow has two of those reports scheduled, starting the 4th Quarter Employment Cost Index (ECI) at 8:30 AM ET. This index measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. If wages are rising, consumers have more money to spend and businesses usually need to charge more for their products and services. The report is considered moderately important and usually has more of an impact on the bond market than the stock markets. Current forecasts are showing an increase of 0.6%. A lower than expected reading would be favorable to bonds and mortgage rates, but unless we see a large variance from forecasts, I am not expecting this report to have much of an influence on tomorrow?s rates.

Januarys Consumer Confidence Index (CCI) is the second report of the day, coming at 10:00 AM ET. This report is also considered to be of moderate importance to the bond market and therefore can move mortgage rates if it shows any surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a small rise from Decembers reading, indicating consumer confidence was a little stronger than last month. A reading much smaller than the expected 112.5 would be ideal for the bond market and mortgage rates. A higher reading than forecasts would hint that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher tomorrow.

Overall, Friday is the best candidate for most important day of the week as long as the FOMC meeting doesn?t yield any surprises, although we could see plenty of movement in the markets and mortgage rates Wednesday also. The calmest day will probably be tomorrow. I am fully expecting to see another very active week for mortgage rates, so please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

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

 

[Tamalewagon]

Tuesdays bond market has opened in positive territory due partly to somewhat favorable economic news. Helping to support bonds is more selling in stocks during early trading. The Dow is currently down 128 points, falling further below 20,000, while the Nasdaq has lost 16 points. The bond market is currently up 13/32 (2.44%), which should improve this mornings mortgage rates by approximately .125 - .250 of a discount point.

Both of this mornings economic releases gave us favorable results, but neither is considered to be highly important. The first was the 4th Quarter Employment Cost Index (ECI) at 8:30 AM ET. It showed a 0.5% increase, meaning employer costs for wages and benefits rose moderately last quarter. However, this was slightly less than the 0.6% that was expected. That allows us to consider the data neutral-to-slightly positive for bonds and mortgage rates.

We also got Januarys Consumer Confidence Index (CCI) at 10:00 AM ET this morning. It showed a reading of 111.8, falling short of the 112.5 that was expected. It also was a decline from Decembers revised reading of 113.3, indicating surveyed consumers were less optimistic about their financial and employment situations than they were in December. Because waning confidence usually translates to softer levels of consumer spending, this is good news for the bond and mortgage markets also.

There are a couple of very important events taking place tomorrow. The day begins with 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. It tracks changes in private-sector jobs of the companys clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and also is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we see a reaction to its results, it is included in this weeks calendar. Analysts are expecting to see 165,000 new jobs. Good news would be a much smaller number of jobs.

Next up is the Institute of Supply Managements (ISM) manufacturing index for January at 10:00 AM ET. This very important index tracks manufacturer sentiment by rating surveyed trade executives opinions of business conditions. It is usually the first economic data released each month and is one of the highly important reports we get monthly. Current forecasts are calling for a reading in the neighborhood of 55.0, which would be a slight increase from Decembers reading of 54.7. The lower the reading, the better the news for the bond market and mortgage rates because weaker sentiment indicates a slowing manufacturing sector.

Lastly, this years first FOMC meeting that begins today will adjourn tomorrow at 2:00 PM ET. The general consensus is that Fed Chair Janet Yellen and friends will not follow up last months bump to key short-term interest rates with another move this week. Another rate hike is still possible though, so we need to be prepared in case it does happen. Afternoon volatility in the markets tomorrow is a possibility following the post-meeting statement release. This meeting will not include economic projections or a Fed press conference.

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

 

[Tamalewagon]

Wednesdays bond market has opened in negative territory following stronger than expected economic data. Stocks are in positive ground but pretty subdued considering the magnitude of this mornings news. The Dow has gained 43 points while the Nasdaq is up 22 points. The bond market is currently down 9/32 (2.49%), which will likely push this morning?s mortgage rates higher by approximately .250 of a discount point.

We had two economic reports released this morning and both gave us results that are bad news for bonds and mortgage rates. First came the ADP Employment report at 8:15 AM ET that showed a surprising 246,000 new private sector jobs last month. This was well above expectations of 165,000 and a significant increase from December?s revised 151,000. The spike indicates solid strength in private sector hiring. It also raises concerns about what Friday?s monthly governmental Employment report is going to show. Because the data points toward strength in the employment sector, it has had a negative impact on today?s rates.

Then the Institute of Supply Management (ISM) posted their manufacturing index for January at 10:00 AM ET. It came in at 56.0, its highest reading since August 2014. Analysts were expecting to see a reading of 55.0, meaning more surveyed manufacturing execs felt business improved last month than many had thought. That is unfavorable news because it points towards manufacturing sector growth.

The days activities are not over yet. We have this afternoon?s FOMC meeting adjournment to deal with also. The general consensus is that Fed Chair Janet Yellen and friends will not follow up last months bump to key short-term interest rates with another move this week. Another rate hike is still possible though, so we need to be prepared in case it does happen. Afternoon volatility in the markets is a possibility following the post-meeting statement release. This meeting will not include economic projections or a Fed press conference. It will adjourn at 2:00 PM ET, so any reaction will come during mid-afternoon trading.

We do have a couple of minor economic reports scheduled for tomorrow, but they will be addressed in this afternoon?s update. Look for this report to be updated shortly after the markets have an opportunity to react to the FOMC adjournment and statement.

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

 

[Tamalewagon]

Thursdays bond market has opened in positive territory, extending yesterday?s post-FOMC move. The major stock indexes are showing modest losses with the Dow down 20 points and the Nasdaq down 4 points. The bond market is currently up 11/32 (2.43%), which should improve this mornings mortgage rates by approximately .250 - .375 of a discount point if comparing to Wednesdays early pricing. You may have seen part of that improvement late yesterday as many lenders ended up reposting lower rates before the end of the day.

There were two pieces of data posted at 8:30 AM ET this morning. Neither were considered important to the financial or mortgage markets. The first was last week?s unemployment update that showed 246,000 new claims for unemployment benefits were filed. This was a little lower than the 250,000 that was expected and a decline from the previous week?s revised 260,000 initial filings. Declining claims is a sign of a strengthening employment sector, so we should consider this data negative for mortgage rates. However, it is only a weekly snapshot and the variance from forecasts was not significant. Therefore, it has had a minimal impact on todays mortgage rates.

Also posted early this morning was 4th Quarter Employee Productivity and Costs data. It revealed that worker productivity grew at an annual rate of 1.3% last quarter, exceeding expectations of 1.0%. In this report, the higher the growth rate the better the news it is for bonds. This means we can consider the data favorable for mortgage rates. Although, it is not the cause of this morning?s bond strength.

Tomorrow brings us the almighty monthly Employment report from the Labor Department at 8:30 AM ET. This is a key report that can heavily influence the financial and mortgage markets. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller rise in payrolls than expected and flat earnings. Current forecasts are calling for no change in the unemployment rate of 4.7% and approximately 180,000 new jobs added to the economy. I am paying close attention to the average hourly earnings reading also as it is trending upward. Stronger than expected readings will likely fuel a stock market rally and selling in bonds that would cause a sizable upward revision to mortgage rates. On the other hand, disappointing numbers would raise concerns about the strength of economy and the Fed raising rates, which would likely lead to a sizable improvement in mortgage pricing.

December's Factory Orders data is also scheduled to be released tomorrow morning but at 10:00 AM ET. It is similar to last week's Durable Goods Orders release in giving us a measurement of manufacturing sector strength, but this data includes new orders for both durable and non-durable goods. It is not one of the more important reports we get each month, however, it can normally influence mortgage pricing if it varies greatly from forecasts. Analysts are expecting a 1.4% rise in new orders, indicating a strengthening manufacturing sector. The bond market would like to see a large decline, meaning that manufacturing activity was weaker than many had thought. However, the Employment report will be taking center stage 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... Float if my closing was taking place over 60 days from now...

 

[Go-Fly]

Rates will be at 6% by late summer.:thumbsup

 

[Tamalewagon]

Fridays bond market has opened in positive territory due to a positive reaction to todays key economic data. Stocks are also reacting positively to the news, pushing the Dow higher by 138 points and over 20,000 again. The Nasdaq has gained 23 points. The bond market is currently up 11/32 (2.43%), which should improve this mornings mortgage rates by approximately .125 - .250 of a discount point over Thursdays morning pricing. Limiting a larger improvement is weakness late yesterday that gave back some of the mornings gains.

The first of this mornings two relevant economic releases was Januarys Employment report at 8:30 AM ET. It revealed that the U.S. unemployment rate rose 0.1% to 4.8% last month and that 227,000 new jobs were added to the economy. The payroll number was much higher than the 180,000 that was expected, making it bad news for bonds and mortgage rates. However, in a bit of positive news, downward revisions to December and Novembers payroll numbers eliminated 39,000 jobs. Still, we have a higher unemployment rate (positive for bonds) contradicting a stronger payroll number (negative). In other words, they more or less offset each other.

What is driving bonds higher this morning is the weaker than expected average earnings reading. It came in at up 0.1% when analysts were expecting to see a 0.3% rise. Furthermore, Decembers previously announced 0.4% increase was revised to up only 0.2%. These readings ease concerns about wage inflation that was appearing to be gaining steam and can easily fuel broader inflation within the economy. The softer than expected earnings also should affect the Feds thought process when considering to raise key short-term interest rates. I believe that is why we are seeing a positive reaction to the report in bonds and mortgage rates this morning despite the surprise payroll number.

Todays second piece of data was December's Factory Orders data at 10:00 AM ET. The Commerce Department announced a 1.3% rise in new orders for both durable and non-durable goods. This was close to forecasts of a 1.4% rise, so its impact on today?s trading has been nearly non-existent.

Next week is very light in terms of economic releases and other events that are expected to affect mortgage rates. There is little data being posted. In fact, the biggest events will likely be a couple of Treasury auctions the middle days. Look for details on next week?s events in Sunday evenings weekly preview.

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

 

[Tamalewagon]

Monday?s bond market has opened in positive territory, recovering some of Friday?s late selling. Stocks are starting the week flat with the Dow nearly unchanged from Friday?s close and the Nasdaq down 8 points. The bond market is currently up 6/32 (2.44%), but we still may see a slight increase in this morning?s rates if comparing to Friday?s morning levels. This is because bonds turned south during afternoon trading, causing many lenders to revise rates higher before the day came to a close Friday. If your lender did revise higher, you may see a slight improvement from that revision in this morning?s pricing.

There is nothing of importance set for release today. In fact, the rest of the week has only a single monthly report that is expected to influence mortgage rates. We also have a couple of Treasury auctions to watch mid-week. With such a short list of events to affect bond trading, we should see stocks have a larger impact this week than they recently have.

The first scheduled event of the week will be the first of the two important Treasury auctions. 10-year Treasury Notes will be sold Wednesday, followed by 30-year Bonds Thursday. Wednesday?s auction is the more important of the two as it will give us an indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward afternoon revisions to mortgage rates.

Overall, Wednesday is the best candidate for most active day for rates while any other day could be the quietest. Look for stocks to be in focus this week. Of particular interest will be the Dow?s ability to stay above 20,000. Weaker stocks are generally good news for bonds and mortgage rates. If it fails to hold, there is an elevated likelihood that stocks will slide noticeably, driving bond prices higher and mortgage rates lower. Despite the lack of influential economic data, it still would be prudent to maintain contact with your mortgage professional if 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 flat with nothing of importance on tap today to drive trading. The major stock indexes are showing noticeable gains with the Dow up 80 points and the Nasdaq up 19 points. The bond market is currently unchanged from yesterdays close (2.41%), but strength late yesterday should help push this mornings mortgage rates slightly lower than Mondays morning levels.

There is again no relevant economic data or other mortgage-relevant events scheduled for today. With so little set for this week, we are turning our attention to stocks and their recent upward move. The Dow has managed to stay above 20,000 for a couple days now, which has been a key point. If it fails to hold that level, stocks may be in for some selling that should benefit bonds and mortgage rates. On the other hand, if stocks continue their upward trend, bonds may become less appealing to investors. That would lead to higher mortgage yields and mortgage pricing.

Tomorrow does bring us something to watch that may affect mortgage rates. However, it comes during afternoon trading. It is the first of this weeks two important Treasury auctions. 10-year Treasury Notes will be sold tomorrow, followed by 30-year Bonds Thursday. Tomorrows auction is the more important of the two as it will give us an indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

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

 

[Tamalewagon]

check the daily rates at www.WMRLoans.com. We are closing loans in as little as 8 days.



Wednesdays bond market has opened in positive territory (any time you see "positive" territory, that is good news for mortgage rates), extending yesterdays afternoon strength. Stocks are helping bonds with the Dow down 51 points (nearing 20,000 test) and the Nasdaq down 14 points. The bond market is currently up 14/32 (2.34%), which with yesterdays late gains should improve this mornings mortgage rates by approximately .250 of a discount point. If your lender improved pricing intraday Tuesday, you likely will see a smaller improvement this morning.

There is no relevant economic data scheduled for release today. We do however, have a Treasury auction taking place that often influences mortgage rates. 10-year Treasury Notes are being auctioned today. If this sale is met with a strong demand from investors, we should see the bond market move higher during afternoon hours, possibly improving mortgage pricing. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

Tomorrows only relevant economic news is expected to be last week's unemployment figures at 8:30 AM ET. They are forecasted to show that 250,000 new claims for unemployment benefits were filed last week, up from the previous week?s 246,000 initial claims. This report usually does not cause much movement in the markets or mortgage rates unless it shows a significant jump or drop in initial claims for benefits. But with such little scheduled this week, we may see a slightly stronger reaction to its results than we normally do. 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.

We also have the 30-year Treasury Bond auction to watch tomorrow. As with todays sale, a strong level of interest from investors would be good news for bonds and mortgage rates. Bad news would be a weak interest in the securities. Results will also be posted at 1:00 PM, so this will be an afternoon event 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... Float if my closing was taking place over 60 days from now...

 

[Tamalewagon]

Thursdays bond market has opened in negative territory following unfavorable economic news. Stocks are not helping the cause with moderate gains in the major indexes. The Dow is currently up 50 points while the Nasdaq has gained 14 points. The bond market is currently down 13/32 (2.37%), which should push this mornings mortgage rates higher by approximately .250 of a discount point.

We saw bonds turn south after yesterdays 10-year Treasury Note auction. The results of the sale gave us mixed results on investor interest in the securities. It appears the indicators that point towards a weak interest were the main focus as selling started immediately after the results were posted. Mortgage bonds did make a respectable rebound before closing, but they did not get back to their pre-auction results though, leaving us with a slight increase in rates to carry into this mornings trading.

Last weeks unemployment figures were posted at 8:30 AM ET this morning, showing that 234,000 new claims for unemployment benefits were filed last week. This was down from the previous week?s 246,000 initial claims and well below the 250,000 that was expected. Since declining claims is a sign of strength in the employment sector, this is bad news for bonds and mortgage rates.

We also have the 30-year Treasury Bond auction to watch tomorrow. As with todays sale, a strong level of interest from investors would be good news for bonds and mortgage rates. Bad news would be a weak interest in the securities. Results will also be posted at 1:00 PM, so this will be an afternoon event tomorrow.

This week closes tomorrow with Februarys preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows an increase in consumer confidence, the stock markets may move higher and bond prices could fall. It is currently expected to show a 98.0 reading, down from Januarys final reading of 98.5. That would indicate consumers were a little less optimistic about their own financial situations than last month and are less likely to make large a purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, this would be considered slightly positive news for bonds and mortgage pricing. Ideally, we would prefer to see a large decline in confidence.

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 in negative territory despite weaker than expected economic news. The major stock indexes are showing relatively minor gains of 42 points in the Dow and 8 points in the Nasdaq. The bond market is currently down 5/32 (2.41%), which will likely push this morning?s mortgage rates higher by approximately .125 of a discount point than Thursdays morning pricing.

Yesterdays 30-year Bond auction went fairly well with several benchmarks indicating a decent interest in the securities. Despite the favorable results, bonds did not improve during afternoon trading. In fact, they slowly moved slightly lower into the close. It was enough of a change for some lenders to revise rates higher intraday, but I suspect most waited until this morning to reflect the move.

Todays only relevant economic data was February?s University of Michigans Index of Consumer Sentiment. It came in at 95.7, falling short of expectations and January?s final reading. Analysts were expecting to see a 98.0 reading following January?s 98.5. This decline means surveyed consumers were less optimistic about their own financial and employment situations than many had thought. Since waning confidence usually translates into softer consumer spending levels, we can consider the data good news for bonds and mortgage rates. Unfortunately, this is only a moderately important report, so its impact on todays trading has been minimal.

Next week is going to be pretty active in terms of mortgage rate-relevant data and other events. There are some important pieces of economic data scheduled, including a key measure of consumer spending and two inflation readings. The big news though will likely be Fed Chair Janet Yellens semi-annual congressional testimony over two days. There is nothing on tap for Monday that is of concern. Look for details on all of next weeks events 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]

Mondays bond market has opened in negative territory with stocks starting the week well in positive ground. The Dow is currently up 95 points while the Nasdaq has gained 24 points. The bond market is currently down 8/32 (2.43%), but due to a little strength in trading late Friday we should see just a slight increase in this mornings mortgage rates.

There is nothing of importance scheduled for today, but the rest of the week brings us the release of six monthly economic reports that have the potential to influence mortgage pricing. Some of those releases are considered to be highly important to the financial and mortgage markets. In addition to the data, we also have a couple of Fed congressional events that will draw much attention.

The weeks calendar starts at 8:30 AM ET tomorrow morning when the Labor Department releases their Producer Price Index (PPI) for January. This index measures inflationary pressures at the producer level of the economy and is considered to be one of the key measures of inflation we see each month. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. It is expected to show an increase of 0.3% in the overall reading and a 0.2% rise in the core data. Good news for bonds would be a decline in both readings, particularly the core data as it would ease concerns about future inflation that make long-term securities less attractive to investors.

Also tomorrow is day one of Fed Chair Janet Yellens semi-annual testimony on the status of the economy. She will appear at 10:00 AM ET tomorrow and Wednesday mornings. She will be speaking to the Senate Banking Committee tomorrow morning and the House Financial Services Committee Wednesday. Market participants will watch her words very closely. The Fed is required to deliver this testimony twice a year, which is considered to be of extreme importance to the financial markets. We almost always see the markets move as a result of what is said during this testimony. Look for her to address our employment situation, inflation, stock gains and global political/financial issues and their impact on our economy. Her testimony begins at 10:00 AM ET with a prepared statement which is then followed by Q & A with committee members. Her prepared words are expected to be released prior to her appearance, so we could see a reaction early tomorrow morning. I am expecting to see the markets fluctuate tomorrow morning, possibly affecting mortgage rates also. The first day of testimony usually causes the most volatility because the prepared statement made by the Chairperson on the second day often differs little from that of the first day.

Overall, tomorrow is the most important day of the week due to Feds semi-annual testimony to congress and the PPI. Wednesday also has a good chance of being an overly active day for mortgage rates because of the importance of the data (three releases, two of which are highly important). The calmest day could be Friday. With so many highly important events scheduled this week, it would 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... Lock if my closing was taking place over 60 days from now...

 

[Tamalewagon]

Tuesdays bond market has opened well in negative territory following stronger than expected inflation news and concerning words from Fed Chair Janet Yellen. Stocks are flat for the most part with the Dow down 4 points and the Nasdaq down 7 points. The bond market is currently down 18/32 (2.50%), which should push this mornings mortgage rates higher by approximately .250 - .375 of a discount point.

Todays only relevant economic data was January?s Producer Price Index (PPI) at 8:30 AM ET. It showed a surprising 0.6% rise in the overall reading and a 0.4% increase in the more important core data. Analysts were expecting to see increases of 0.3% and 0.2% respectively. This means that inflationary pressures were stronger at the producer level of the economy than many had thought. Since rising inflation erodes the value of a bonds future fixed interest payments, it has a negative impact on mortgage-related bonds. It also makes it more likely the Fed will be aggressive in raising key short-term interest rates. Therefore, this data was bad news for bonds and mortgage rates.

Taking place late this morning is the first of two days of semi-annual congressional testimony by Fed Chair Yellen on the status of the economy. She is before the Senate Banking Committee today and will repeat to the House Financial Services Committee tomorrow. Most of her comments in the prepared statement were run of the mill quotes we have heard before. But there were two things said this morning that are causing alarm in the bond market. The first was a reference that a rate hike would be "appropriate at one of the upcoming meetings." While that technically could mean any of the future meetings, the market is taking it to imply another rate bump may be coming at their next meeting in March. That appears to have caught traders off guard.

The second is a comment that indicates the Fed may be planning to shed many of their mortgage-related security holdings and focus just on government securities. The fact that the Fed is considering selling the massive amount of mortgage debt is certainly bad news for mortgage rates. That will significantly alter the supply versus demand equation and has already pushed mortgage bonds lower and mortgage pricing higher this morning. The negative reaction will likely repeat itself every time news is released of the Fed selling those holdings. In other words, this may be an ongoing hurdle for the bond and mortgage markets to get over.

Besides day two of the Chair Yellens testimony, we also have three economic reports coming tomorrow that are likely to affect mortgage rates. The first is one of the more important ones we get each month. The Commerce Department will post Januarys Retail Sales at 8:30 AM ET tomorrow. It is very important to the financial markets because it measures consumer spending. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched quite closely. If tomorrows report reveals weaker than expected retail-level sales, the bond market should thrive and mortgage rates will fall since it would be a sign that the economy is not as strong as many had thought. However, a stronger reading than the 0.1% increase that is expected could lead to higher mortgage rates tomorrow morning.

Also at 8:30 AM ET tomorrow will be the release of Januarys Consumer Price Index (CPI). The difference between the CPI and today?s PPI is that the CPI measures inflationary pressures at the more important consumer level of the economy. Its results can have a significant impact on the financial markets, especially on long-term securities such as mortgage-related bonds. Inflation isn't exactly a concern currently, but there are many that feel the Feds monetary policy decisions are going to fuel rapid inflation down the road, so analysts still track the readings closely. Current inflation readings will also influence the Fed's decisions regarding rate increases. The report is expected to show a 0.2% increase in the overall index and a 0.3% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall, assuming the Retail Sales report doesn?t show surprise results.

Januarys Industrial Production data will be released at 9:15 AM tomorrow. It helps us measure manufacturing sector strength by tracking output at U.S. factories, mines and utilities and can have a moderate impact on the financial markets. Analysts are expecting to see no change in production levels from December to January. A decline in output would be good news and should help push bond prices higher, helping to lower 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 negative territory following unfavorable results in today?s important economic data. Stocks are showing minor gains in response, pushing the Dow higher by 27 points and the Nasdaq up 3 points. The bond market is currently down 10/32 (2.50%), but due to a bounce in bonds late yesterday we should see little change in this morning?s mortgage pricing. If your lender did improve rates intraday yesterday afternoon, you will likely see an increase in this morning?s rates.

We had three piece of economic data posted this morning, including two highly important reports at 8:30 AM ET. The bad news came from those two releases. Starting with Januarys Retail Sales, the Commerce Department announced a 0.4% rise in consumer level sales. Analysts were expecting to see only a 0.1% increase. Even a secondary reading that excludes more costly and volatile auto sales came in with a 0.8% increase when only 0.4% was forecasted. Todays release also showed upward revisions to Decembers sales. The data indicates consumers spent much more last month and in December than many had thought. Because consumer spending makes up a significant portion of the U.S. economy, this is clearly bad news for bonds and mortgage rates.

The second report of the morning also came at 8:30 AM when Januarys Consumer Price Index (CPI) was posted. It revealed a surprising 0.6% jump in the overall reading and a 0.3% increase in the more important core data. Both readings exceeded forecasts, meaning inflationary pressures were stronger at the consumer level of the economy than was expected. Since bonds tend to thrive in a lower inflationary environment, this is also bad news for mortgage rates.

Januarys Industrial Production data was released at 9:15 AM ET, showing a 0.3% decline in output at U.S. factories, mines and utilities. That hints at manufacturing sector weakness and since no change was expected, we can consider this news favorable for the bond and mortgage market. Unfortunately, this was the least important of the days three releases, minimizing its impact on todays trading.

Day two of Fed Chair Janet Yellens semi-annual congressional testimony has failed to bring any significant surprises. She is speaking before the House Financial Services committee today. Her prepared statement was the same as yesterdays, so we have seen no reaction to todays proceeding.

Tomorrow brings us the release of two minor pieces of economic data. The first is last weeks unemployment figures at 8:30 AM ET. They are expected to show that 245,000 new claims for unemployment benefits were filed last week, up from the previous week?s 234,000 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.

Next up is Januarys Housing Starts, also early tomorrow morning. This report gives us an indication of housing sector strength and mortgage credit demand by tracking new housing construction starts. It usually does not affect rates unless the results vary greatly from forecasts. Current forecasts are calling for little change in construction starts of new housing. A weak housing sector makes broader economic growth less likely in the near future, which makes bonds more attractive to investors. Therefore, the smaller the number of starts, the better the news it is for mortgage rates.

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

 

[Tamalewagon]

Thursdays bond market has opened in positive territory (translation - lower rates today) as a key resistance level in bonds looks to be holding ground. Stocks are flat with the Dow down 1 point and the Nasdaq down 2 points. The bond market is currently up 7/32 (2.47%), which should improve this morning?s mortgage rates by approximately .125 of a discount point.

The benchmark 10-year Treasury Note yield broke above 2.50% twice yesterday but closed right at that level. This mornings gains bring it back below. If 2.50% is truly broken, we can expect bond yields to continue to move higher, bringing mortgage rates with them. But, if there is strong resistance at this point, then bonds and mortgage rates may be heading lower in the immediate future. One day is not enough to rely on, although it is a good start for mortgage shoppers who have not locked a rate yet.

There were two minor economic reports posted this morning. The first was last week?s unemployment figures at 8:30 AM ET. They showed that 239,000 new claims for unemployment benefits were filed last week, up from the previous week?s 234,000 initial claims. The increase is favorable news for bonds but it actually fell short of the 245,000 that was expected. Rising clams is good news for bonds and mortgage rates. However, because it fell short of expectations we should consider the data neutral toward rates.

Also early this morning was the release of Januarys Housing Starts. The Commerce Department announced a 2.6% drop in new home groundbreakings. This was a larger decline than expected, hinting at housing sector weakness. Unfortunately though, the numbers are not what the headline number makes them appear to be. A sizable upward revision in Decembers starts makes Januarys decline look worse than it is. Despite the percentage drop, the number of groundbreaking exceeded expectations for January. Accordingly, we can label this news negative for bonds and mortgage rates.

This weeks very busy calendar comes to a close late tomorrow morning when Januarys Leading Economic Indicators (LEI) are released. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 0.5% increase, meaning that economic activity should expand in the near future. A smaller increase would be good news for the bond market and mortgage rates. This data is not considered to be highly important, so a sizable variance from forecasts is needed for it to directly affect 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]

Fridays bond market has opened in positive territory with stocks showing minor losses and no significant surprises in today?s only economic data. The Dow is currently down 45 points while the Nasdaq has slipped 1 point. The bond market is currently up 11/32 (2.40%), which should improve this morning?s mortgage rates by approximately .250 of a discount point from Thursday?s morning pricing. Some lenders improved rates yesterday afternoon as bonds improved, so if your lender did revise lower intraday yesterday, you should see less of an improvement this morning.

The benchmark 10-year Treasury Note yield continues to move away from 2.50% after breaking it twice Wednesday. This is very good news for mortgage shoppers as it appears that threshold is a very strong point of resistance. This trend could continue until it gets into the mid 2.2?s, meaning there is still room for rates to improve from current levels because mortgage pricing tends to track bond yields. However, I say that with caution and recommend proceeding carefully if still floating an interest rate and closing in the near future.

Todays only economic data was January?s Leading Economic Indicators (LEI) that showed a 0.6% increase. This was slightly stronger than the 0.5% that was expected. The rise indicates potential economic growth over the next several months. However, this is not considered to be a highly important piece of data, so its influence on today?s trading has been minimal.

The financial markets will be closed Monday for the President?s Day holiday. You will likely find many mortgage companies open for business, but will probably be using todays rates or not accepting new rate locks. There is no early close in today?s trading.

Next week does not have much to be concerned with. There are a couple of minor economic reports, two potentially relevant Treasury auctions and the minutes from the most recent FOMC meeting. Look for details on next week?s calendar in Sunday evening?s weekly preview.

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

 

[Tamalewagon]

Tuesdays bond market has opened in negative territory following the long weekend. Stocks are not helping either with the major indexes showing sizable gains. The Dow is currently up 112 points while the Nasdaq has gained 25 points. The bond market is currently down 4/32 (2.43%), which should push this mornings mortgage rates higher by approximately .125 of a discount point if comparing to Fridays morning pricing. The financial markets were closed yesterday in observance of the Presidents Day holiday.

There is nothing of importance set for release today. The rest of the week does not have much either in terms of economic reports that are likely to affect mortgage rates. There are only three pieces of moderately important data for the bond market to digest along with the minutes from the most recent FOMC meeting and a couple Treasury auctions.

The first piece of data will be Januarys Existing Home Sales report by the National Association of Realtors at 10:00 AM ET tomorrow morning. This data tracks home resales throughout the country, giving us a measurement of housing sector strength. It is expected to show a rise in sales of existing homes, meaning the housing sector strengthened last month. Ideally, the bond market would like to see a sizable decline in sales because weak housing makes broader economic growth more difficult. Since long-term securities such as mortgage bonds tend to thrive during weaker economic conditions, weak housing numbers would be good news for mortgage rates.

In addition to this weeks few economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Notes tomorrow and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, sales with higher levels of investor demand usually make bonds more attractive to investors and brings additional funds into the bond market. The buying of bonds that follows translates into lower mortgage rates. Results will be posted at 1:00 PM ET, so this will be an afternoon event.

Tomorrow also brings us the release of the minutes from the most recent FOMC meeting. Traders will be looking for any indication of the Fed's next move regarding monetary policy, particularly when the next rate increase may come. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. These minutes may lead to afternoon volatility, or they may be a non-factor. However, they do carry the potential to influence mortgage rates so they should be watched.

Overall, tomorrow is the best candidate for most active day in mortgage rates but Friday is worth consideration also. The quietest day will probably be Thursday. Generally speaking, there is nothing of major concern scheduled this week. Therefore, we could see a pretty calm week in mortgage rates unless something unexpected happens.

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 in positive territory despite stronger than expected housing news. The stock markets are calm with the Dow down 4 points and the Nasdaq down 7 points. The bond market is currently up 7/32 (2.40%), which should improve this mornings mortgage rates slightly.

The National Association of Realtors gave us Januarys Existing Home Sales report at 10:00 AM ET this morning. They announced a 3.3% rise in home resales last month, exceeding forecasts and pushing sales to their highest level since February 2007. Since sales beat expectations, pointing towards housing sector strength, we should consider this data negative for bonds and mortgage rates. Fortunately, this is only a moderately important report and has had a minor impact on today?s trading.

Today also has the first of this week?s two Treasury auctions that may influence mortgage pricing. 5-year Treasury Notes will be auctioned today, followed by a 7-year Note sale tomorrow. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, sales with higher levels of investor demand usually make bonds more attractive to investors and brings additional funds into the bond market. The buying of bonds that follows translates into lower mortgage rates. Results will be posted at 1:00 PM ET, so this will be an afternoon event.

The minutes from the most recent FOMC meeting will also be posted this afternoon. Traders will be looking for any indication of the Fed's next move regarding monetary policy, particularly when the next rate increase may come. They will be released at 2:00 PM ET, therefore, any reaction will come during mid-afternoon trading. These minutes may lead to afternoon volatility, or they may be a non-factor. However, they do carry the potential to influence mortgage rates so they should be watched.

Besides the 7-year Note sale, the only other mortgage-relevant event tomorrow is the weekly unemployment update at 8:30 AM ET. It is expected to show that 242,000 new claims for unemployment benefits were filed last week, up from the previous week?s 239,000. 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.

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 positive territory, recovering yesterdays afternoon losses. The major stock indexes are mixed with the Dow up 13 points and the Nasdaq down 19 points. The bond market is currently up 7/32 (2.39%), but due to selling late yesterday we should see little change in this morning?s mortgage pricing if comparing to Wednesdays morning rates. If your lender did revise pricing higher before close yesterday, then you should see a small improvement this morning.

We had the first of this weeks two relevant Treasury auctions take place yesterday. The 5-year Note sale did not go very well with several benchmarks pointing towards weak interest in the securities. This news didn?t cause bonds to slide as they were already losing ground before results were posted at 1:00 PM ET. However, the news certainly did not help the cause either. It also gives us little to be optimistic about in today?s 7-year Note auction. Results will also be posted at 1:00 PM ET, so any reaction will come during early afternoon trading. Strong investor demand is good news for the broader bond market and mortgage rates.

Also yesterday was the release of the minutes from the January 31/February 1 FOMC meeting. They didn?t reveal too many surprises, but did reiterate the possibility of another bump to key short-term interest rates in the immediate future. Many analysts now think that the Fed will make another quarter point move at their March 14-15 meeting. This is earlier than what some were expecting at the beginning of the year. It doesn?t change much of anything as long as the Fed makes only three rate increases this year. More increases would be bad news for mortgage rates, while fewer would be positive.

Todays only economic data was last weeks unemployment figures at 8:30 AM ET. They showed that 244,000 new claims for unemployment benefits were filed last week, up from the previous week?s revised 238,000 initial filings. This was slightly higher than the 242,000 that was expected, making the data favorable for mortgage rates.

Tomorrow has two pieces of economic data that we will be watching, both at 10:00 AM ET. Januarys New Home Sales report is one. This is the least important report of the week, and is the sister report to Wednesdays Existing Home Sales data. It also measures housing sector strength and mortgage credit demand, but usually does not have a significant impact on bond trading or mortgage rates unless it shows a significant surprise. Tomorrow's report is expected to show an increase in sales of newly constructed homes, hinting at strength in the new home portion of the housing sector too. The smaller the number of sales, the better the news it is for bonds and mortgage rates.

The University of Michigans revision to their Index of Consumer Sentiment for February will close out the week's calendar. Current forecasts show this index rising slightly from its preliminary estimate of 95.7. This index is fairly important because it helps us measure consumer confidence that translates into consumer willingness to spend, but is not considered to be a major market mover. The lower the reading, the better the news it is for mortgage rates.

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

 

[Tamalewagon]

Fridays bond market has opened in positive territory with stocks showing early weakness. The major indexes are posting moderate losses of 58 points in the Dow and 22 points in the Nasdaq. The bond market is currently up 12/32 (2.33%), which should improve this morning?s mortgage rates by approximately .250 of a discount point.

There were two 10:00 AM ET economic reports posted this morning. The Commerce Department announced that sales of newly constructed homes rose 3.7% last month, falling short of expectations. The fact we saw an increase in sales indicates strength in the new home portion of the housing sector. However, since the increase was not as much as analysts were expecting to see, we can consider the data neutral to slightly favorable for mortgage rates.

Also posted this morning was the University of Michigans revised Index of Consumer Sentiment for February. It came in at 96.3, exceeding forecasts of 95.8. This means that more surveyed consumers felt better about their own financial and employment situations than many had thought. Because rising confidence usually means consumers are more willing to spend, this is slightly negative news for bonds and mortgage pricing.

Next week brings us the release of a handful of reports that may influence mortgage rates, some of which are pretty important to the markets. We will not get the Employment report but will get the ISM manufacturing index next week. Monday does have a release and its one of the more important reports we get each month (Durable Goods Orders). Look for details on next week?s calendar in Sunday evenings weekly preview.

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

 

[Tamalewagon]

Mondays bond market has opened in negative territory, erasing gains from Friday afternoon. Stocks are starting the week flat with the Dow down 2 points and the Nasdaq down 1 point. The bond market is currently down 8/32 (2.34%), but due to Fridays late gains we should see little change in this mornings mortgage rates if comparing to Fridays early pricing. If your lender improved rates during afternoon trading Friday, you should see an increase this morning by the same amount.

Todays sole relevant economic report was January's Durable Goods Orders at 8:30 AM ET. It showed a 1.8% decline in new orders for big-ticket products such as appliances and airplanes, matching forecasts. However, a secondary reading the excludes more costly and volatile airplane orders showed a 0.2% decline when analysts were expecting to see a 0.5% increase. This means that the manufacturing sector was weaker than expected if transportation-related orders are excluded. Therefore, we can consider the data slightly positive for bonds and mortgage rates.

Tomorrow has two of this weeks five remaining monthly and quarterly releases. The first is the revised 4th Quarter GDP reading at 8:30 AM ET. The GDP is considered the benchmark reading of economic growth or contraction because it is the total sum of all goods and services produced in the U.S. Analysts forecasts currently call for an annual rate of growth of 2.1%, up from the initial estimate of 1.9% that was posted last month. It will be interesting to see where this figure falls and what its impact on the markets will be. Generally speaking, higher levels of activity are bad news for the bond market, while a larger downward revision would be good news for bonds and could lead to improvements in mortgage pricing.

Februarys Consumer Confidence Index (CCI) will be posted at 10:00 AM ET tomorrow. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. If consumers are feeling good about their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the economy, related data is considered important in terms of gauging economic growth. It is expected to show a decline in confidence from the 111.8 reading in January to 111.5 this month. A lower reading would be considered good news for bonds and mortgage rates since it would indicate consumers are less likely to make a large purchase in the near future than many had thought.

Overall, Wednesday is the best candidate for most important day of the week with two important reports scheduled in the morning and the afternoon release of the Fed Beige Book that can affect the Feds voting on interest rate changes. The calmest day will likely be Thursday. Due to the importance of some of this week?s data, it is strongly recommended that you 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]

YOUR VA PURCHASE LOAN WENT FROM SUBMISSION TO CTC IN 18 CALENDAR DAYS!

The CregXXX loan was submitted February 9th @5:11pm and received the CTC at 9:39am on February 27th!

Great work Wenhe Mortgage!

Nobody closes loans faster than You + UWM!

 

[Tamalewagon]

Tuesdays bond market has opened in positive territory following mixed economic news. The major stock indexes are showing minor losses with the Dow down 12 points and the Nasdaq down 19 points. The bond market is currently up 5/32 (2.34%), which should help recover some of yesterdays afternoon increase in mortgage rates. Many lenders revised higher during afternoon trading and this mornings bond gains should recover about half of that upward revision. If your lender did not raise rates intraday yesterday, you should see a slight increase in this mornings pricing.

The first of this mornings two economic releases was the revised 4th Quarter GDP reading at 8:30 AM ET. It showed the economy grew at an annual rate of 1.9% during the 4th quarter of last year, matching the preliminary reading posted last month. Because analysts were expecting it to be revised upward 0.2%, we can consider the data favorable for bonds and mortgage rates since it shows the economy was weaker than expected.

Also posted this morning but at 10:00 AM ET was Februarys Consumer Confidence Index (CCI). The Conference Board announced a reading of 114.8 that exceeded forecasts by a couple points. It also was an increase from Januarys revised 111.6 reading, meaning surveyed consumers felt better about their own financial and employment situations than they did last month. Since strengthening confidence usually translates into stronger levels of consumer spending, this should be considered bad news for mortgage rates.

Tomorrow is likely to be a pretty active day for the markets. Januarys Personal Income and Outlays data is scheduled for release at 8:30 AM ET tomorrow morning. This data gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for an increase in income of 0.4% while spending is expected to rise 0.3%. Lower levels of income means consumers have less money to spend. And weaker levels of consumer spending helps limit overall economic growth, making long-term securities such as mortgage-related bonds more attractive to investors. Therefore, the weaker the readings, the better the news it would be for mortgage rates.

The Institute for Supply Management (ISM) will release their manufacturing index for February at 10:00 AM ET tomorrow. This index measures manufacturer sentiment and can have a pretty heavy impact on the financial and mortgage markets if it varies from forecasts. It is expected to show a slight change from Januarys 56.0 (+0.1). A reading above 50.0 means more surveyed manufacturers felt business improved during the month than those who felt it had worsened. A sub-50 reading is considered a recessionary sign. If we see a weaker than expected reading, the bond market could rally. But, a much higher than forecasted reading could lead to heavy selling in bonds, causing mortgage rates to rise. One of the reasons this data is considered so important is the fact that it is usually the first monthly report posted that covers the preceding month. It is traditionally posted the first business day of the month, allowing for a current snapshot of conditions in the manufacturing sector.

We also have an afternoon event to watch. The Fed Beige Book will be posted at 2:00 PM ET tomorrow afternoon. This report details economic activity throughout the country by Federal Reserve region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during mid-afternoon trading tomorrow. It probably will not cause a major sell off in the stock or bond markets, but it is still worth watching.

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 well in negative territory in response to strong stocks gains fueled by President Trumps speech last night. The major stock indexes are sharply higher with the Dow up 254 points and the Nasdaq up 55 points. The bond market is currently down 19/32 (2.46%). This mornings losses, coupled with weakness late yesterday should push this mornings mortgage rates higher by approximately .500 of a discount point if comparing to Tuesdays early pricing.

This mornings economic data wasn?t exactly bond favorable, but it is not the cause of the selling. Stocks are rallying after President Trumps speech to congress last night was taken as extremely positive for economic growth. He is in favor of corporate tax cuts and less business regulation that are also expected to help boost corporate earnings. Accordingly, stocks are rallying today and what is positive for stocks generally is negative for bonds. Besides the economic growth concerns in the bond market, we are also seeing funds shift away from bonds and back into stocks. This doesn?t come as a surprise after the recent bond rally as it is common to see profit-taking after a quick rally.

We had two pieces of economic data that was released this morning. The first was Januarys Personal Income and Outlays data at 8:30 AM ET. The Commerce Department reported a 0.4% increase in income and a 0.2% in personal spending. The income reading matched forecasts, but the spending came in a little light compared to the 0.3% rise that was expected. This means that consumers spent less than anticipated, making the data slightly favorable for bonds and mortgage rates. Unfortunately, it was just a small victory on an otherwise overly negative day.

The more important data of the morning was the Institute for Supply Management (ISM) manufacturing index for February at 10:00 AM ET. It came in at 57.7, exceeding forecasts of 56.1. That means more surveyed manufacturing executives felt business improved than did in January. Because that is a sign of manufacturing sector strength, we should consider this news negative for the bond and mortgage markets.

Later today, the Federal Reserve will release their Fed Beige Book. It will be posted at 2:00 PM ET tomorrow afternoon. This report details economic activity throughout the country by Federal Reserve region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during mid-afternoon trading. It probably will not cause a major sell off in the stock or bond markets, but it is still worth watching.

Tomorrows only relevant data is last week?s unemployment figures. They are expected to show that 245,000 new claims for unemployment benefits were filed last week, up from the previous week?s 244,000 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 tomorrow?s 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]

Thursdays bond market has opened in negative territory as the negative momentum in bonds continues. Stocks are calm but down a few points. The Dow is down 2 points while the Nasdaq has lost 16 points. The bond market is currently down 9/32 (2.48%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point compared to yesterdays early pricing.

Yesterdays afternoon release of the Fed Beige Book didn?t reveal too many noticeable surprises. It did indicate that employment optimism eased a little since the previous update. But overall, the information compiled from the Federal Reserves regional districts showed that the economy continues to grow at a modest to moderate pace. This report is relied upon by the Fed when they meet for their FOMC meetings and there is debate among analysts whether they will make another rate increase at their March 14-15th meeting. This report didn?t do much to boost or weaken the odds of that happening.

Todays only relevant economic data was last weeks unemployment figures at 8:30 AM ET. They showed that only 223,000 new claims for unemployment benefits were filed last week. This was well below the 245,000 that was expected and the previous week?s revised 242,000 initial filings. This points towards a strengthening employment sector, making the news negative for bonds and mortgage rates.

Tomorrow only has a couple Fed speaking engagements that are likely to heavily influence the markets and/or mortgage pricing. I would not be surprised to see a fairly calm day, although any surprises could push bonds lower and mortgage rates higher.

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

 

[Tamalewagon]

Fridays bond market has opened in negative territory again. The major stock indexes calm at this point, but they have been active during afternoon trading several days this week. Currently, the Dow is down 8 points while the Nasdaq is down 6 points. The bond market is currently down 5/32 (2.49%), which should keep this mornings mortgage rates very close to yesterdays early pricing.

There is no important economic data being released today that is likely to affect mortgage rates. This weeks bond weakness has the benchmark the 10-year Treasury Note yield testing 2.50% again. If it breaks above, we will likely be in for more increases to mortgage rates in the immediate future. On the other hand, if it moves away from that threshold like last time, rates should move lower in the coming days. I think we need to turn towards stocks for guidance. The Dow broke above 21,000 before slipping below this morning. There is an argument to be made that stocks are due for a pullback. If that is the case, then there is a decent chance of seeing bond yields and mortgage pricing move lower.

Next week has only a few reports set to be released, but one of those is the almighty monthly Employment report. We do have data coming Monday with Januarys Factory Orders report at 10:00 AM ET. It is only moderately important, but can affect mortgage rates if it shows a noticeable variance from forecasts. Look for details on it and the rest of next week?s calendar in Sunday evening?s weekly preview.

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

 

[Tamalewagon]

Tuesdays bond market has opened in negative territory, again testing the important 2.50% threshold. Stocks are showing minor losses of 26 points in the Dow and 11 points in the Nasdaq. The bond market is currently down 4/32 (2.50%), which should push this mornings mortgage rates slightly higher.

Tomorrow has a couple events taking place that may influence mortgage rates. The first comes at 8:15 AM ET from payroll processor ADP who will announce their change in private-sector payrolls processed last month. Since it is not a government agency report, it isn't considered to be highly important. However, as with any employment-related data, it does draw some attention. This is especially true for this report because it is posted just a couple days before monthly employment figures are released by the Labor Department. I personally believe it is given more attention than it really deserves, particularly because many use it to predict the monthly government figures but often without success. Still, if it shows a noticeable variance from expectations, it will likely cause movement in the markets and mortgage rates. Forecasts are calling for it to show 180,000 new payrolls.

The second report of the day will be the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed an increase of 1.3% in worker output. Analysts are expecting to see an upward revision of 0.2% to last month's initial reading. Employee productivity is watched fairly closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns. However, since this data is quite aged now, it likely will have little impact on tomorrow's mortgage rates unless it shows a significant change.

Also tomorrow is the first of this weeks two Treasury auctions that are likely to affect mortgage rates. 10-year Treasury Notes will be sold tomorrow, followed by 30-year bonds Thursday. Results of both sales will be posted at 1:00 PM ET each day. If investor demand was high, we may see bonds rally during afternoon trading as it would hint that investors still have an appetite for longer-term securities. However, weak demand in the sales could lead to selling and an increase in mortgage rates late tomorrow and/or Thursday.

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

Lock those rates campers! Yellen is said to most likely raise rates next week and the bond market is down meaning higher rates...read on.

Wednesdays bond market has opened well in negative territory following a bit of surprisingly strong employment-related data. Despite the stock-friendly news, the major stock indexes are mixed with the Dow down 19 points and the Nasdaq up 15 points. The bond market is currently down 12/32 (2.55%), which will likely push this mornings mortgage rates higher by approximately .250 of a discount point.

There were two pieces of data posted early this morning. The one that surprised the markets was ADPs private sector payroll number at 8:15 AM ET. It showed that 298,000 new jobs were added, greatly exceeding forecasts of 180,000. Because this points towards strength in the employment sector, it is clearly bad news for bonds and mortgage rates. It also raises expectations for Fridays monthly government Employment report. Fortunately, this release is considered only to be moderately important to the markets or we could have seen a much bigger move in rates this morning.

The second report of the day was the revised Productivity index for the 4th Quarter. It came in at up 1.3%, matching the initial estimate that was posted last month, but falling short of the 1.5% that was expected. Stronger levels of worker productivity are considered good for the bond market. Since this report that doesn?t draw too much attention and the focus this morning has been on the ADP number, this news has had little influence on today?s mortgage rates.

Also going on today is the first of this week?s two Treasury auctions that are likely to affect mortgage rates. 10-year Treasury Notes are being auctioned today, followed by 30-year bonds tomorrow. Results of both sales will be posted at 1:00 PM ET each day. If investor demand was high, we may see bonds rally during afternoon trading as it would hint that investors still have an appetite for longer-term securities. However, weak demand in the sales could lead to selling and another increase in mortgage rates.

The only relevant economic release tomorrow morning is last week?s unemployment update at 8:30 AM ET. It will give us a small snapshot of the employment sector and is expected to show that 240,000 new claims for unemployment benefits were filed last week, up from the previous week?s 223,000. 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 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... Lock if my closing was taking place over 60 days from now...

 

[OldSchoolBoats]

Lock those rates campers! Yellen is said to most likely raise rates next week and the bond market is down meaning higher rates...read on.

I think the rate hike has already been priced in for the most part. As long as we hold under 2.61 today, that is a good thing.

IMO a series of Fed hikes could be the one scenario where mortgage rates actually stabilize / fall

Another crazy stat is that even if rates go to 5.5%, housing affordability would still be at the long term historical average.

 

[Tamalewagon]

Thanks for the input Joe. We'll have to wait and see.

 

[Tamalewagon]

Thursdays bond market has opened in negative territory as investors prepare for tomorrow?s major economic data. Stocks are showing minor gains with the Dow up 34 points and the Nasdaq up 11 points. The bond market is currently down 8/32 (2.58%), which should push this mornings mortgage rates higher by approximately .125 - .250 of a discount point.

We saw mortgage bonds improve a little yesterday afternoon after results of the 10-year Treasury auction were posted. Unfortunately, this morning?s selling erases that move. Yesterdays auction went pretty well with the benchmarks showing a decent level of investor interest in the securities. That allows us to remain optimistic about today?s 30-year Bond auction. If investor demand is high for these securities also, we could see bond and mortgage pricing improvement later today. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon hours.

Todays only economic data was last weeks unemployment update at 8:30 AM ET. It showed that 243,000 new claims for unemployment benefits were filed last week, up from 223,000 the previous week. Analysts were expecting to see 240,000 new claims. Since rising claims is a sign of a softening employment sector, we can consider this news to be favorable for bonds and mortgage rates. Unfortunately, todays release is not considered to be of high importance, limiting its influence on this mornings mortgage pricing.

Tomorrow brings us the almighty monthly Employment report form the Labor Department. They will release Februarys Employment report at 8:30 AM ET tomorrow. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller increase in payrolls than expected and little or no increase in earnings. Current forecasts are calling for a 0.1% decline in the unemployment rate from January?s 4.8% and approximately 200,000 new jobs added to the economy. Stronger than expected readings will likely fuel a stock market rally and selling in bonds that would cause a sizable upward revision to mortgage rates. On the other hand, disappointing numbers would raise concerns about the economys ability to continue to grow that would have an opposite impact on the markets and mortgage pricing.

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

 

[Tamalewagon]

Fridays bond market has opened in positive territory following the release of Februarys employment numbers. The major stock indexes are showing gains of 36 points in the Dow and 23 points in the Nasdaq. The bond market is currently up 6/32 (2.58%), but weakness late yesterday is going to likely prevent an improvement in this morning?s rates. If your lender raised rates intraday Thursday, then you should see an improvement in this mornings rates of the same amount.

Yesterdays 30-year Bond auction went fairly well, but not as strong as Wednesdays 10-year Note sale. Bond prices lost ground during afternoon trading yesterday, causing some lenders to review rates upward before closing. I don?t believe that selling was a result of the auction. It is more likely that traders were still concerned about this morning?s key economic data.

Todays big news was Februarys Employment report at 8:30 AM ET. It revealed that the unemployment rate slipped 0.1% last month, now standing at 4.7%. The average earnings reading came in with a 0.2% increase. Both of these readings matched forecasts and have not had too much influence on todays markets.

The not so favorable news came in the payroll number that showed 235,000 new jobs were added to the economy last month. This was higher than the 200,000 that was expected, which by itself is bad news for bonds and mortgage rates. However, it appears that market participants were actually expecting a higher number than printed forecasts after Wednesday?s ADP release showed a significant spike in private sector jobs. In other words, the 235,000 beat forecasts, but traders had built in a higher number. We can call this morning?s positive reaction a relief rally, fueled by the fact that the payroll number was not higher than it was.

I would not be surprised to see some swings in the major stock indexes and bond prices throughout the day today. This could lead to an intraday revision to mortgage pricing, although it likely would be a minor change. Next week is packed with economic data and mortgage-relevant events. There is something of interest set for every day except Monday with Wednesday being the key day of the week due to a couple of important economic reports, followed by an afternoon of Fed events. Look for details on next weeks calendar in Sunday evenings weekly preview.

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

 

[Tamalewagon]

Take note campers...rates likely to move higher this week. Check our rates at www.WMRLoans.com.

Mondays bond market has opened in negative territory with stocks mixed but calm and no relevant economic data to drive trading. The Dow is currently down 12 points while the Nasdaq is up 4 points. The bond market is currently down 4/32 (2.58%), which should push this mornings mortgage rates slightly higher than Fridays morning levels.

There is nothing of importance scheduled for today. This is the only day of the week that we don?t have something to watch that has the potential to influence mortgage rates. The rest of the week is very busy with seven monthly reports for the bond market to digest in addition to a Fed-filled afternoon. The most important reports and Fed events take place mid-week, so we should see the most movement in mortgage rates then.

Februarys Producer Price Index (PPI) will kick off this weeks calendar at 8:30 AM ET tomorrow morning. This important index measures inflationary pressures at the producer level of the economy. There are two portions of the index- the overall reading and the core data. The core data is more important and watched more closely because it excludes more volatile food and energy (such as gasoline) prices. If the index shows a large increase, inflation concerns will rise, making long-term investments such as mortgage-related bonds less attractive to investors. Rising inflation also could cause the Fed to make more rates hikes this year than previously expected. Therefore, increases larger than the 0.1% in the overall reading and 0.2% core reading that are expected would be bad news for mortgage rates.

Overall, Wednesday is the key day of the week due to the two morning highly important economic releases and the afternoon FOMC adjournment, economic projections and Fed press conference. There is a strong likelihood that we will see plenty of movement in the markets and mortgage rates this week. Accordingly, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

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

 

[Tamalewagon]

Tuesdays bond market has opened in positive territory despite stronger than expected inflation news. Stocks are helping to boost bonds with losses of 85 points in the Dow and 42 points in the Nasdaq. The bond market is currently up 9/32 (2.59%), but due to weakness late yesterday we still should see a slight increase in this mornings mortgage rates if comparing to Mondays morning pricing.

Todays only relevant economic data was Februarys Producer Price Index (PPI) at 8:30 AM ET. It showed a 0.3% rise in both the overall and core data readings. Analysts were expecting to see a 0.1% rise in the overall reading and a 0.2% increase in the core data. This means that inflationary pressures at the manufacturing level were stronger than thought. By theory, that is bad news for bonds and mortgage rates. Fortunately, traders appear to be shrugging off the news.

Tomorrow is the key day of the week. It should bring plenty of volatility in the markets and mortgage rates. It starts with two very important pieces of economic data at 8:30 AM ET. Februarys Retail Sales data from the Commerce Department is one. This data is extremely important to the financial markets because it measures consumer spending strength. Since consumer spending makes up over two-thirds of the U.S. economy, data that is related usually has a big impact on the markets. This months report is expected to show a rise in sales of 0.1%. If it reveals a larger increase, the bond market will likely fall and mortgage rates will move higher as it would indicate a stronger level of economic growth than many had thought. If it shows a much weaker level of spending, I expect to see bond prices rise and mortgage rates improve tomorrow morning, assuming the second release doesn?t show a significant surprise.

The second release of the morning will be Februarys Consumer Price Index (CPI). It is the sister release to todays PPI but measures inflationary pressures at the very important consumer level of the economy. The CPI is expected to show a 0.1% increase in the overall index and a 0.2% rise in the more important core data. As with the PPI, weaker than expected readings would be good news for bonds and mortgage rates.

Tomorrow also has several Fed events scheduled. They start with the 2:00 PM ET adjournment of the two-day FOMC meeting that began today. There is much debate whether or not Fed Chairman Yellen and company will raise key short-term interest rates at this meeting. There is a very good chance that they will make another quarter point bump and I am one that believes it happen Wednesday. Even if no move is made, we will be closely watching the post-meeting statement for changes in verbiage that could indicate when their next move is likely to take place. If they don?t act at this meeting, it is widely expected that it will come at the next. So, if the post-meeting statement hints that it may not happen at the next meeting either, we can expect a very favorable reaction in the bond market.

The FOMC meeting will adjourn at 2:00 PM ET, which is when the statement will be released. That is also when we will get the Fed?s updated economic projections. Those events will be followed by a press conference by Chair Yellen. It is likely going to be a pretty active morning tomorrow but an even more active afternoon in the financial and mortgage markets.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... 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 with this mornings key economic data showing little in terms of surprises. The major stock indexes are showing relatively minor gains, pushing the Dow higher by 42 points and the Nasdaq up 2 points. The bond market is currently up 5/32 (2.58%), which should slightly improve this mornings mortgage rates.

Februarys Retail Sales data was posted at 8:30 AM ET this morning. The Commerce Department announced a 0.1% increase in retail-level sales last month, matching forecasts. A secondary reading that excludes more volatile and costly auto transactions showed a 0.2% rise when analysts were expecting to see a 0.1% increase. This means consumers spent slightly more in February than they did in January. However, because they did not vary much from expectations, we can consider the news neutral for mortgage rates.

The second release of the morning was Februarys Consumer Price Index (CPI), also at 8:30 AM ET. It revealed a 0.1% increase in the overall reading and a 0.2% rise in the core data that excludes food and energy prices. Both readings pegged forecasts, so we can also consider this data neutral for mortgage rates.

The rest of the days activities come this afternoon, starting with the 2:00 PM ET adjournment of the two-day FOMC meeting. There is much debate whether or not Fed Chairman Yellen and company will raise key short-term interest rates at this meeting with the consensus being a quarter point move being made. Even if no move is made, we will be closely watching the post-meeting statement for changes in verbiage that could indicate when their next move is likely to take place. If they do not act at this meeting, it is widely expected that it will come at the next. So, if the post-meeting statement hints that it may not happen at the next meeting either, we can expect a very favorable reaction in the bond market.

Also 2:00 PM is when we will get the Feds updated economic projections. Those events will be followed by a press conference by Chair Yellen at 2:30 PM ET. It is likely going to be a pretty active afternoon for the financial and mortgage markets. We will update this report shortly after the markets react to the events. There is some minor economic data being posted tomorrow morning, but it will be addressed in this afternoon?s update.

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 the Fed raising key short-term interest rates by a quarter point. This was move was expected by many market analysts. Even the revised economic projections failed to bring a significant surprise. There was a slight upward revision to this year?s inflation growth and the same for 2018?s GDP. With the exception to those minor changes, the other key projections remained unchanged from their previous estimates.

What is making waves is the indication that the Fed still only expects to make three rate increases this year and three next year. Some traders were expecting to hear that four or more increases would be made. That is being taken as a significant positive for the bond market and mortgage rates.

Overall, both stocks and bonds are reacting favorably to this afternoon?s events. The Dow is currently up 106 points while the Nasdaq is up 41 points. Bonds are making a more noticeable move from this morning?s levels. The bond market is currently up 28/32, dropping the 10-year Note yield from 2.58 this morning to 2.50% currently. This should cause widespread sizable downward revisions to mortgage rates. We should see an improvement in this afternoon?s mortgage pricing of approximately .375 - .500 of a discount from this morning?s rates.

February's Retail Sales data was posted at 8:30 AM ET this morning. The Commerce Department announced a 0.1% increase in retail-level sales last month, matching forecasts. A secondary reading that excludes more volatile and costly auto transactions showed a 0.2% rise when analysts were expecting to see a 0.1% increase. This means consumers spent slightly more in February than they did in January. However, because they didn?t vary much from expectations, we can consider the news neutral for mortgage rates.

The second release of the morning was February's Consumer Price Index (CPI), also at 8:30 AM ET. It revealed a 0.1% increase in the overall reading and a 0.2% rise in the core data that excludes food and energy prices. Both readings pegged forecasts, so we can also consider this data neutral for mortgage rates.

There are two minor pieces of economic data set for release at 8:30 AM ET tomorrow morning. February's Housing Starts is the first, tracking construction starts of new housing. It doesn't usually cause much movement in mortgage rates though. Tomorrow?s release is expected to show an increase in new home groundbreakings. Good news for the bond market and mortgage rates would be a sizable decline in new starts. But unless we see a large variance from forecasts the data likely will not lead to a noticeable move in mortgage pricing.

Also being posted early tomorrow is last week?s unemployment figures. They are expected to show 242,000 new claims for unemployment benefits were filed, down slightly from the previous week?s 243,000. Rising claims is a sign of a softening employment sector, so the larger the number of new filings, the better the news it is for bonds and mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... 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, giving back some of yesterdays afternoon gains. The stock markets are showing small gains with the Dow up 32 points and the Nasdaq up 8 points. The bond market is currently down 10/32 (2.53%), which should push this morning?s mortgage rates higher by approximately .125 of a discount point if comparing to yesterday?s post-FOMC pricing.

This morning had two minor economic reports for the markets to digest at 8:30 AM ET. Februarys Housing Starts showed a larger than expected increase in new home groundbreakings. The Commerce Department announced a 3.0% increase in housing starts last month. A sizable increase in single-family home starts pushed them to their highest level since October 2007, indicating the new home portion of the housing sector is strengthening. That makes the data bad news for bonds and mortgage rates.

The second report of the morning was last week?s unemployment figures. They revealed that 241,000 new claims for unemployment benefits were filed last week. That was down from the previous weeks 243,000 new filings but close to the 242,000 that was forecasted. The decline in new claims is technically bad news, however, this is only a weekly report and the small variance wasn?t enough to affect this morning?s bond trading or mortgage pricing.

Tomorrow has three moderately important economic reports scheduled for release. First is Februarys Industrial Production report at 9:15 AM ET. This report measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.2% rise from Januarys level. A large decline would be considered favorable news for bonds and mortgage rates because it would indicate manufacturing sector weakness. Broader economic growth would be more difficult if manufacturing activity is slipping.

Next up is the University of Michigans Index of Consumer Sentiment for March just before 10:00 AM ET. This index gives us a measurement of consumer willingness to spend. If consumers are more confident in their own financial and employment situations, then they are more apt to make large purchases in the near future. This helps fuel consumer spending levels and economic growth. A drop in confidence will probably hurt the stock markets and boost bond prices, leading to lower mortgage rates. Bad news for bonds and mortgage rates would be rapidly rising confidence. It is expected to show a reading of 96.8, up from Februarys final reading of 96.3.

The final report of the week will be Leading Economic Indicators (LEI) for February from the Conference Board. This index attempts to measure economic activity over the next three to six months. It is considered to be moderately important, but likely will not have a significant impact on mortgage rates. Current forecasts are calling for a 0.5% increase, meaning it is predicting that economic activity will likely expand moderately in the coming months. A smaller than forecasted rise, or better yet a decline would be considered good news for the bond market and mortgage rates.

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

 

[Tamalewagon]

Fridays bond market has opened in positive territory despite mostly stronger than expected economic data. The major stock indexes are nearly unchanged with the Dow down 1 points and the Nasdaq down 3 points. The bond market is currently up 9/32 (2.50%) which should improve this morning's mortgage rates by approximately.125 of a discount point.

The first of this mornings three economic reports was Februarys Industrial Production report at 9:15 AM ET. It showed now change from Januarys level, falling short of the 0.2% increase that was expected. This means that output at U.S. factories, mines and utilities was lighter than many had thought. Because that indicates the manufacturing sector may be flat, we can consider the data good news for bonds and mortgage rates.

Next up was the University of Michigans Index of Consumer Sentiment for March. They announced a reading of 97.6, exceeding forecasts of 96.8. This was also an increase from Februarys 96.3, meaning consumers felt better about their own financial situations than they did last month. Since higher levels of confidence usually translate into stronger consumer spending, this report is a negative for mortgage rates.

The final report of the week was Februarys Leading Economic Indicators (LEI). The Conference Board announced a 0.6% rise in the indicators, meaning they are predicting moderate economic growth over the next several months. Analysts were expecting to see a 0.5% rise, so this report also should be considered unfavorable for bonds and mortgage rates.

Next week has only a couple of relevant economic reports scheduled for release,none of which are set for Monday. It is a much lighter week than this one was in terms of data and other events that are likely to influence mortgage rates. Look for details on next week's calendar in Sunday evening's weekly preview.

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