Rate Lock Advisory - Wednesday May. 19th

Wednesday's bond market initially opened in negative territory but has since erased those gains as stock prices started to fall. The stock markets are in selling mode again with the Dow down 122 points and the Nasdaq down 27 points. The bond market is currently up 2/32, which should improve this morning's mortgage rates by approximately .125 of a discount point.

Today's important inflation data gave us favorable results. The Labor Department reported that the Consumer Price Index (CPI) fell 0.1% last month when it was expected to rise slightly. Even better news was the core data reading that showed no change from March when it was expected to rise slightly. This means that inflationary pressures at the consumer level of the economy were lighter than thought. That is good news for rates because it makes long-term securities such as mortgage-related bonds more attractive to investors.

Later today, the minutes from the last FOMC meeting will be released. Market participants will be looking at how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form opinions about when the Fed may make a move to key short-term interest rates. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.

Tomorrow brings us the last relevant economic data of the week when April's Leading Economic Indicators (LEI) are posted at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a 0.2% increase from March's reading, meaning that economic activity is likely rise slightly during the next few months. A decline would be good news for the bond market and mortgage rates, while a larger increase could cause mortgage rates to inch higher tomorrow.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... 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 - Monday May. 17th

Monday's bond market has opened up slightly following a calm open in stocks. The major stock indexes are mixed with the Dow down 14 points and the Nasdaq up 2 points. The bond market is currently up 3/32, which should keep this morning's mortgage rates at Friday's levels.

There is no relevant economic news scheduled for release today. As long as the stock markets remain near current levels, the bond market and mortgage rates will likely follow suit today. If they move much higher or lower than where they are this morning, bond prices will probably move in the opposite direction. If stocks rise, look for upward revisions to rates later today. If they fall form current levels, mortgage pricing may revise lower this afternoon.

The first report of the week is April's Producer Price Index (PPI) early tomorrow morning, which helps us measure inflationary pressures at the producer level of the economy. If this report reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes more volatile food and energy prices is also expected to rise 0.1%. No change or a decline in the core data would be ideal for mortgage shoppers because inflation is the number one nemesis for long-term securities such as mortgage-related bonds.

April's Housing Starts will also be posted early tomorrow morning, but is much less important than the PPI readings are. This data measures housing sector strength and mortgage credit demand by tracking new permits and actual starts of new home construction. It is expected to show an increase in new starts from March's readings. Since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts and the PPI matches forecasts.

Overall, it appears it is going to be another active week for the mortgage market. We have two inflation readings that are very important to the bond market the middle part of the week. Stock market volatility will likely also affect bond trading again this week, so we may see movement in rates several days. Wednesday's CPI is the single most important report of the week, but tomorrow's PPI can also heavily influence the bond market.

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.