If I were considering financing/refinancing a home, I would....

Rate Lock Advisory - Friday May. 14th

Friday's bond market has opened up sharply following another round of selling in stocks. The stock markets are showing sizable losses with the Dow down 180 points and the Nasdaq down 52 points. The bond market is currently up 17/32, which will likely improve this morning's mortgage rates by approximately .250 - .375 of a discount point.

Due to the stock selling, today's economic data did not influence bond trading and mortgage rates as it was expected to do. The data itself was unfavorable for bonds and rates, but the market seems to be more interested in the stock weakness that has shifted funds away from stocks and into bonds.

The first piece of today's three releases was April's Retail Sales. The Commerce Department said that sales at retail level establishments rose 0.4% last month. This was twice the increase of 0.2% that was expected, meaning consumers spent more than thought. However, if more volatile auto-related sales are excluded, they would have matched forecasts. This has helped prevent the bond market from reacting negatively to the data, but the stock selling has taken center stage anyhow.

The second report of the day was April's Industrial Production. It showed that production at U.S. factories, mines and utilities rose 0.8%. That matched forecasts, meaning that industrial production did not exceed expectations. The sizable gain is good news for the economy and bad news for bonds, but this data is much less important to the markets than the Retail Sales data is. Therefore, it also has had little impact on today's mortgage pricing.

The last report of the week was May's preliminary reading to the University of Michigan's Index of Consumer Sentiment. It showed a reading of 73.3, indicating that consumers were more optimistic about their own financial situations this month than they were last month. Again, as with the earlier two reports, this data has not affected mortgage rates this morning.

Next week brings us the release of a several relevant reports, including two key inflation readings. Nothing of importance is scheduled for release Monday and the most important data will be released mid-week. Look for more details on next week's events in Sunday'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... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Rate Lock Advisory - Tuesday May. 11th

Tuesday's bond market has opened relatively flat considering the past few trading sessions. The stock markets are showing early losses with the Dow down 32 points and the Nasdaq down 7 points. The bond market is currently up 2/32, but I don't believe this will be enough to cause much change to mortgage rates.

There is no relevant economic news scheduled for release today. This will leave the bond market and mortgage rates subject to stock market movements again. As long as the major stock indexes remain near current levels, I suspect that mortgage rates will follow suit. However, afternoon strength or selling in stocks could make bonds less or more appealing to investors and lead to afternoon changes in mortgage rates.

Tomorrow does bring us some economic data, but it is the week's least important news. March's Goods and Services Trade Balance report will be released early tomorrow morning, giving us the size of the U.S. trade deficit. It is expected to show a $40.5 billion trade deficit. This report likely will have little impact on tomorrow's mortgage rates unless it shows a significant variance between forecasts and its actual results.

10-year Treasury Notes will be sold tomorrow and could impact bond prices and mortgage rates. The 30-year Bond sale will take place Thursday. Results of the auctions will be posted at 1:30 PM ET each day. If they are met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding in the sale could lead to higher mortgage pricing those afternoons.

The remaining three economic reports will be released Friday morning. This is when we will get April's Retail Sales data (highly important), April's Industrial Production (moderately important) and May's University of Michigan's Index of Consumer Sentiment (moderately important).

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... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Friday will Lead to a Great Week - Rate Lock Advisory - Friday May. 7th

Friday's bond market has opened in negative territory after this morning's employment data gave us mixed results. The stock markets are experiencing quite a bit of volatility this morning fluctuating between positive and negative ground. They initially opened with respectable gains after yesterday's 347-point drop in the Dow, but quickly gave them up before moving higher yet again. They are currently well in negative territory with the Dow down 91 points and the Nasdaq down 41 points.

The bond market initially appeared to be ready to give back a good part of yesterday's gains. It traded in negative ground overnight and even after this morning's data was posted it remained there. However, it seems to be slowly erasing these losses as the morning trading session continues. After being down 14/32 earlier, it is currently down only 5/32. We will still likely see an improvement of approximately .250 - .375 of a discount point in this morning's mortgage rates though due to strength late yesterday as stocks slid. If the stock markets continue to fall, bonds should improve enough to possibly revise mortgage rates lower this afternoon.

The Labor Department was in the spotlight again this morning when they posted April's employment statistics. They announced that the unemployment rate rose to 9.9% last month when it was expected to remain at 9.7%. This was the part of the report that was good for bonds and mortgage rates. The bad news came in the payroll numbers that showed that 290,000 jobs were added to the economy during the month that was the largest monthly addition since March 2006. Analysts had forecasted only 187,000 new jobs, indicating that the employment sector was hiring more than thought. Today's report also revealed an upward revision of 68,000 jobs to March's previously announced total, meaning that 573,000 new payrolls have been added to the economy so far this year.

Overall, the data supports both theories about the strength and recovery of the economy. On one hand, the unemployment rate nearly touched the 10.0% benchmark that the Fed itself has indicated is a possibility. That hints that there may be room for the figure to move even higher. But, the job growth is fairly impressive and puts us on a pace for strong job growth for the year if the current rate continues. During the first few minutes of trading it seemed that the markets couldn't quite decide if this data is worth adding or selling holdings. Now it seems that with the overseas financial crisis still looming, we could see more weakness in stocks today. Holding out for an improvement to rates later today may be a safe bet, but I still think that we are due for a correction in bonds that would bring mortgage rates off their current lows. So, please proceed cautiously if still willing to gamble on mortgage rates.

Next week is relatively active with a handful of relevant economic reports schedule and two important Treasury auctions set. There is no relevant data scheduled for release Monday or Tuesday, so I am expecting any weekend news on the financial situations overseas and the stock markets to drive bond trading and mortgage rates those days. Look for details on next week's relevant events in Sunday'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... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.