If you are in the middle of getting a loan, here is the latest rate lock advisory based on the current market condition. Recommendation is based on number of days you have left until the closing day of your loan. Please bookmark this page since we will update this regularly with the latest information.
Rate Lock Advisory - Monday Jun. 16th
Monday's bond market has opened up slightly, following a mixed open in stocks and no relevant economic news scheduled for release today. The Dow is currently showing a 35 points loss while the Nasdaq is up 3 points. The bond market is currently up 3/32, but due to selling in bonds late Friday, we will likely still see an increase of approximately .250 of a discount point in this morning's mortgage rates.
This week is moderately busy with four economic reports scheduled to be released. Only one of the four is considered to be of high importance to the markets and mortgage rates. The remaining three are of interest to the markets but likely will not cause a large change in mortgage rates unless they vary greatly from forecasts.
Tomorrow brings us the release of three of the week's four reports. May's Producer Price Index (PPI) will be the first early tomorrow morning. It helps us measure inflationary pressures at the producer level of the economy and is the sister report to last week's Consumer Price Index (CPI). There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food and energy prices. A large increase could add fuel to the theory that inflation is a real threat to the economy because the higher prices will likely be passed on to the consumer in the near future. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond's future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 1.0% in the overall index and a 0.2% rise in the core data.
The second of three reports being posted tomorrow is May's Housing Starts report. This report gives us a measurement of housing sector strength, but is the week's least important. It usually doesn't have a major impact on the bond market or mortgage rates and I see no reason for this month's results to be any different. Analysts are expecting to see a drop in starts of new homes between April and May.
The third and final piece of data is May's Industrial Production. This report will be released at 9:15 AM ET. It measures output at U.S. factories, mines and utilities, giving us an important measurement of manufacturing sector strength. If it reveals that production is rising, concerns of manufacturing strength may come into play in the bond market. A decline would indicate that the manufacturing sector is weaker than expected and should help push mortgage rates lower. Current forecasts are calling for an increase of 0.1%.
Overall, look for tomorrow to be the biggest day of the week. Not just because it brings the release of three of the four reports, but because it brings us the PPI that is considered to be a key inflation reading. I am still not sure that we have seen the end of the recent bond selling. Therefore, I am holding the lock recommendations for the time being.
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 Jun. 3rd
Tuesday'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 in positive territory with the Dow up 25 points and the Nasdaq up 20 points. The bond market is currently down 13/32, but we likely will not see much change in this morning's mortgage rates due to strength in bonds late yesterday.
The Commerce Department reported late this morning that April's Factory Orders rose 1.1%. This greatly exceeded forecasts of a 0.1% decline and indicated that the manufacturing sector was stronger than thought. This is considered to be negative news for bonds and mortgage rates because a growing manufacturing sector is a strong sign of overall economic growth.
Tomorrow morning brings us the release of two pieces of economic data for the markets to digest. The first is the revised 1st Quarter Productivity and Costs reading. This index measures employee output and employer costs for wages and benefits. It is considered to be a measurement of wage inflation. It is believed that the economy can grow with low inflationary pressures when productivity is high, so this type of data can influence trading and mortgage rates. Last month's preliminary reading revealed a 2.2% rate, but I don't think this revision will have much of an impact on the bond market or mortgage pricing unless it varies greatly from its forecasted reading of 2.5%.
The second report of the day may have a significant impact on the markets or be a non-factor depending on its result. The Institute for Supply Management will release its services index late Wednesday morning. It is expected to show a reading of 51.0, with the same principals as Monday's manufacturing index. If this reading varies greatly from forecasts, we may see volatility in the markets and mortgage rates. However, if its results are in the general area of expectations, it will likely have no influence on the markets and mortgage pricing.
There is no relevant data scheduled for release Thursday except weekly unemployment figures. However, market participants will be preparing for Friday's key Employment report for the month of May. This report will likely lead to plenty of volatility in the markets even if its results vary slightly 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... 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.
Other Related Articles:
Car Loans For People With Bad Credit
Car loans for people with bad credit are readily available online. After completing an online car loan application, you can expect an approval within a few minutes. By the next day, you can have check in hand to purchase your vehicle. Car Loans...read more
First Time Home Buyer Loans Made Easy
When it comes to first time home buyer loans, a little research
can save you thousands of dollars over the life of your
mortgage.
A wise consumer selects a mortgage lender prior to shopping for
a home. You see, first time home buyer loans...read more
