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Thursday's bond market has opened in negative territory following the release of stronger than expected economic data and early stock gains. The stock markets are showing moderate strength during early trading with the Dow up 53 points and the Nasdaq up 10 points. The bond market is currently down 13/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point compared to yesterday's morning rates.
The Labor Department gave us both of this morning's releases. The more important of the two was the 1st Quarter Productivity and Costs data that revealed a larger than expected 0.8% increase in worker output. The bad news came from the Unit Labor Costs reading that showed a 3.3% increase. That was higher than the 2.7% that was forecasted, meaning employer costs were higher than thought. Higher costs can translate to wage inflation concerns, therefore, this portion of the report is a negative for bonds.
The second bit of news was last week's unemployment figures. It showed that 601,000 new claims for benefits were filed last week. This is a three month low and was well below forecasts of 635,000, but fortunately this data is not considered to be highly influential on mortgage rates. However, it does raise additional concern about tomorrow's monthly report.
Yesterday's 10-year Note sale was met with a decent demand from investors. That led to improvements in bonds during afternoon trading yesterday and some lenders to revise mortgage pricing lower. The Treasury will sell 30-year Bonds today, posting the results at 1:30 PM ET. Another round of strong bidding could cause bonds to get back some of this morning's earlier losses. However, I suspect that most mortgage lenders will wait until tomorrow's big news rather than revising their rates this afternoon.
Tomorrow morning brings us the release of the almighty Employment report, giving us April's employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be a larger than expected increase in the unemployment rate and more payrolls lost during the month than was expected.
It could turn out to be a wonderful day in the mortgage market tomrrow, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for an 8.9% unemployment rate and approximately 620,000 jobs lost during the month.
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... 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.
Thursday, May 7, 2009
Thursday, April 30, 2009
Rate Update
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Visit my site here, www.htmmobile.com
Thursday's bond market has opened in negative territory following another round of stock gains. The stock markets are continuing yesterday's rally with the Dow up 102 points and the Nasdaq up 37 points. The bond market is currently down 12/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point over yesterday's morning rates.
The Labor Department gave us today's first economic report with the release of the 1st Quarter Employment Cost Index (ECI). It tracks employer costs for wages and benefits, showing a 0.3% increase during the quarter. This was lower than forecasts, which is good news for bonds, and was the lowest increase on record. However, the data seems to be ignored by traders this morning.
March's Personal Income & Outlays also showed weaker than expected results. It revealed a 0.3% decline in income and a 0.2% drop in spending. Both of these readings were a little weaker than analysts had expected, so the data can be considered favorable to bonds also. But this morning's stock gains have made it difficult for bonds to move higher.
The Labor Department also said that 631,000 new claims for unemployment benefits were filed last week. This was lower than forecasts, but since this data tracks only a week's worth of claims, it has had little impact on this morning's trading or mortgage rates.
There are three reports scheduled for release late tomorrow morning. The first is the University of Michigan's update to their Index of Consumer Sentiment for April. This report gives us an indication of consumer sentiment. I don't expect it to have a significant impact on bonds and mortgage pricing unless it varies greatly from forecasts. Current forecasts are calling for a small downward revision to 61.5.
The second is March's Factory Orders data at 10:00AM. This is a moderately important release because it measures manufacturing sector strength. It is similar to last week's Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report usually has more of an impact on the financial markets than the Factory Orders report does. Still, a larger decline than the 0.7% that is expected could push mortgage rates slightly lower, while a smaller drop will likely lead to higher rates. But, the third report of the morning is the most important and will likely be the biggest influence on bond trading tomorrow.
The Institute for Supply Management (ISM) will post their manufacturing index late tomorrow morning also. This is one of the first important economic reports released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. But, if we see a drop from last month's reading of 36.3, the bond market should thrive and mortgage rates will probably fall. It is expected to show a reading of 38.0.
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... 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.
Visit my site here, www.htmmobile.com
Thursday's bond market has opened in negative territory following another round of stock gains. The stock markets are continuing yesterday's rally with the Dow up 102 points and the Nasdaq up 37 points. The bond market is currently down 12/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point over yesterday's morning rates.
The Labor Department gave us today's first economic report with the release of the 1st Quarter Employment Cost Index (ECI). It tracks employer costs for wages and benefits, showing a 0.3% increase during the quarter. This was lower than forecasts, which is good news for bonds, and was the lowest increase on record. However, the data seems to be ignored by traders this morning.
March's Personal Income & Outlays also showed weaker than expected results. It revealed a 0.3% decline in income and a 0.2% drop in spending. Both of these readings were a little weaker than analysts had expected, so the data can be considered favorable to bonds also. But this morning's stock gains have made it difficult for bonds to move higher.
The Labor Department also said that 631,000 new claims for unemployment benefits were filed last week. This was lower than forecasts, but since this data tracks only a week's worth of claims, it has had little impact on this morning's trading or mortgage rates.
There are three reports scheduled for release late tomorrow morning. The first is the University of Michigan's update to their Index of Consumer Sentiment for April. This report gives us an indication of consumer sentiment. I don't expect it to have a significant impact on bonds and mortgage pricing unless it varies greatly from forecasts. Current forecasts are calling for a small downward revision to 61.5.
The second is March's Factory Orders data at 10:00AM. This is a moderately important release because it measures manufacturing sector strength. It is similar to last week's Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report usually has more of an impact on the financial markets than the Factory Orders report does. Still, a larger decline than the 0.7% that is expected could push mortgage rates slightly lower, while a smaller drop will likely lead to higher rates. But, the third report of the morning is the most important and will likely be the biggest influence on bond trading tomorrow.
The Institute for Supply Management (ISM) will post their manufacturing index late tomorrow morning also. This is one of the first important economic reports released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. But, if we see a drop from last month's reading of 36.3, the bond market should thrive and mortgage rates will probably fall. It is expected to show a reading of 38.0.
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... 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.
Thursday, April 23, 2009
Daily Rate info, Thursday 23rd
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View all homes in Mobile, AL at, www.homes4mobile.com
Thursday's bond market has opened fairly flat after this morning's economic news failed to give us any significant surprises. The stock markets are showing early losses with the Dow down 23 points and the Nasdaq down 6 points. The bond market is currently down 4/32, but we still will likely see an improvement of .125 of a discount point in this morning's mortgage rates due to strength in bonds late yesterday.
The Labor Department reported this morning that 640,000 new claims for unemployment benefits were filed last week. This nearly matched forecasts so has had little impact on this morning's bond trading and mortgage rates.
The second report released this morning came from the National Association of Realtors who said that home resales fell 3% last month. This was a larger decline than expected and indicates that the housing sector is not ready to rebound yet. This is good news for bonds, but this data is not considered to be a highly important piece of data. Therefore, its results also have not heavily influenced this morning's mortgage rates.
March's Durable Goods Orders will be posted early tomorrow morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates tomorrow.
The last report of the week will be March's New Home Sales data but it is the least important release of the week. It tracks approximately 15% of all home sales in the U.S., so its impact on bonds will likely be less than today's report that covered the other 85% of home sales. It is expected to show little change in sales from February's levels.
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... 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.
©Mortgage Commentary 2009
View all homes in Mobile, AL at, www.homes4mobile.com
Thursday's bond market has opened fairly flat after this morning's economic news failed to give us any significant surprises. The stock markets are showing early losses with the Dow down 23 points and the Nasdaq down 6 points. The bond market is currently down 4/32, but we still will likely see an improvement of .125 of a discount point in this morning's mortgage rates due to strength in bonds late yesterday.
The Labor Department reported this morning that 640,000 new claims for unemployment benefits were filed last week. This nearly matched forecasts so has had little impact on this morning's bond trading and mortgage rates.
The second report released this morning came from the National Association of Realtors who said that home resales fell 3% last month. This was a larger decline than expected and indicates that the housing sector is not ready to rebound yet. This is good news for bonds, but this data is not considered to be a highly important piece of data. Therefore, its results also have not heavily influenced this morning's mortgage rates.
March's Durable Goods Orders will be posted early tomorrow morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates tomorrow.
The last report of the week will be March's New Home Sales data but it is the least important release of the week. It tracks approximately 15% of all home sales in the U.S., so its impact on bonds will likely be less than today's report that covered the other 85% of home sales. It is expected to show little change in sales from February's levels.
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... 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.
Tuesday, April 14, 2009
Today's Rate Advisory
Tuesday's bond market has opened in positive territory after this morning's economic data revealed much weaker than expected readings. The stock markets are showing losses with the Dow down 49 points and the Nasdaq down 6 points. The bond market is currently up 10/32, which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.
There were two pieces of important economic data posted this morning and both gave us favorable results. The Commerce Department said that sales at retail establishments in the U.S. fell 1.1% last month. This was well off forecasts of a 0.3% rise and indicates that consumers are not spending nearly as much as thought. That is good news for bonds and mortgage rates because consumer spending makes up two-thirds of the U.S. economy. When consumer spending is softening, economic activity slows, creating a favorable environment for bonds and longer-term securities.
The second report of the day was March's Producer Price Index (PPI), which also gave us surprising results. The overall index fell 1.2% when it was expected to remain unchanged from February's level. But the more important core data, that excludes volatile food and energy prices, did not change. It was expected to rise 0.1%, meaning that prices paid at the producer level of the economy were lower than analysts had expected. This eases inflation concerns and makes bonds more appealing to investors.
Tomorrow brings us the release of three reports to watch. The first is the sister report of today's PPI. March's Consumer Price Index (CPI) will be released early tomorrow morning. This index is very similar to today's release, but tracks prices at the more important consumer level of the economy. This is one of the most important pieces of data we see each month, so stronger than expected readings will most likely lead to higher mortgage rates. Current forecasts are calling for an increase of 0.2% in the overall index and 0.1% in the core data.
The second report is March's Industrial Production data at 9:15 AM ET. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for a decline in production of 0.9%. Since signs of a weakening economy are considered favorable to bonds and therefore mortgage rates, a larger decline would be good news for mortgage pricing. However, the CPI is by far the most important data of the day and will likely be the most influential on tomorrow's rates.
The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET tomorrow afternoon. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... 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.
There were two pieces of important economic data posted this morning and both gave us favorable results. The Commerce Department said that sales at retail establishments in the U.S. fell 1.1% last month. This was well off forecasts of a 0.3% rise and indicates that consumers are not spending nearly as much as thought. That is good news for bonds and mortgage rates because consumer spending makes up two-thirds of the U.S. economy. When consumer spending is softening, economic activity slows, creating a favorable environment for bonds and longer-term securities.
The second report of the day was March's Producer Price Index (PPI), which also gave us surprising results. The overall index fell 1.2% when it was expected to remain unchanged from February's level. But the more important core data, that excludes volatile food and energy prices, did not change. It was expected to rise 0.1%, meaning that prices paid at the producer level of the economy were lower than analysts had expected. This eases inflation concerns and makes bonds more appealing to investors.
Tomorrow brings us the release of three reports to watch. The first is the sister report of today's PPI. March's Consumer Price Index (CPI) will be released early tomorrow morning. This index is very similar to today's release, but tracks prices at the more important consumer level of the economy. This is one of the most important pieces of data we see each month, so stronger than expected readings will most likely lead to higher mortgage rates. Current forecasts are calling for an increase of 0.2% in the overall index and 0.1% in the core data.
The second report is March's Industrial Production data at 9:15 AM ET. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for a decline in production of 0.9%. Since signs of a weakening economy are considered favorable to bonds and therefore mortgage rates, a larger decline would be good news for mortgage pricing. However, the CPI is by far the most important data of the day and will likely be the most influential on tomorrow's rates.
The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET tomorrow afternoon. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... 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.
Wednesday, April 8, 2009
HUD Plans to Increase Inspections
| HUD No. 09-032 Lemar Wooley (202) 708-0685 | For Release Thursday April 2, 2009 |
DONOVAN ANNOUNCES PLANS TO REDUCE FRAUD AND RISK IN FHA
HUD seeks funding for technology and manpower, announces lender 'swat teams'
WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan told a Senate appropriations subcommittee today that the Federal Housing Administration needs additional resources to ensure FHA can continue to meet the needs of underserved borrowers during the current mortgage crisis. Donovan also testified that he recently reactivated a program to dispatch teams of investigators to conduct on-site reviews of lenders, especially those whose refinance portfolios are showing signs of distress and abnormally high default rates.
Donovan emphasized that every effort is being made to reduce risk and confront fraud in FHA's single-family mortgage insurance programs. To read the full text of Donovan's testimony, visit HUD's website.
"For FHA to realize its full potential to respond to the current mortgage crisis, it will require additional resources and development of new and innovative reform initiatives," said Donovan. "The recent mortgage market meltdown has provided ample evidence that we must work to rethink each and every aspect of the nation's housing finance system."
In addition to the Agency's normal lender monitoring procedures, FHA plans to increase unannounced on-site inspections of lenders to further reduce the risk of fraud. In FHA's mortgagee letter, lenders are reminded the Department expects a strict adherence to FHA's underwriting standards to ensure lenders:
- Implement and maintain a comprehensive quality control plan,
- Review all loans with early payment defaults;
- Do not engage in false or misrepresentative advertising;
- Fully document the stability and amount of borrower(s) income; and,
- Do not charge excessive and unallowable fees to the borrower.
Donovan also appealed to Congress to appropriate additional funds next year to allow FHA to hire more staff to handle the tremendous surge in loan activity. FHA's role has grown substantially from three percent of lending activity (by dollar volume) in 2006 to approximately 30 percent of all mortgages originated today. But while FHA is currently handling this increased loan volume and managing the accompanying risk, Donovan also cautioned about the challenges facing the mortgage insurance fund.
Donovan said, "Like many federal domestic agencies, FHA has suffered under the penny-wise and pound foolish priorities of the previous Administration. FHA was stagnant, limiting its ability to maintain adequate staffing levels and invest in state-of-the art technology. Repeated budget stalemates and resulting uncertainty of future funding levels undermined the ability to implement long-term organizational improvements."
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HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.
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