Housing News Blog

Mondays Rate Lock News
May 19th, 2008 12:12 PM


Monday's bond market has opened fairly flat after this morning's economic news failed to show any significant surprises. The stock markets are showing early gains with the Dow up 35 points and the Nasdaq up 15 points. The bond market is currently down 1/32, which should keep this morning's mortgage rates at Friday's levels.

The Conference Board gave us this morning's data with the release of April's Leading Economic Indicators (LEI). They reported an increase of 0.1% compared to forecasts of no change, indicating that the economy may grow slightly more than was expected over the next few months. This data is considered to be moderately important and did not have much influence on today's mortgage rates.

April's Producer Price Index (PPI) will be released early tomorrow morning. This index helps us measure inflationary pressures at the producer level of the economy. If this report reveals weaker than expected readings, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.4%, while the core data that excludes food and energy prices is expected to rise 0.2%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.

There is no relevant economic news scheduled for release Wednesday, but we will get to see the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about what the Fed's next move will be. 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.

Overall, it may be an interesting week for mortgage rates. We could see little movement in rates if the stock markets remain calm and the week's data doesn't reveal any major surprises. Tuesday's PPI report is the single most important data o f the week, but the FOMC minutes may also lead to some volatility in the markets. Also worth noting is an early close in the bond market Friday afternoon ahead of the Memorial Day Holiday Monday. These early closes sometimes lead to additional volatility bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early.

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.
Posted by Cam Wallaert on May 19th, 2008 12:12 PMPost a Comment (0)

Bond Market for May 30 2008
May 30th, 2008 12:00 PM
 


Friday's bond market has opened in positive territory after this morning's economic news failed to bring any negative surprises. The stock markets are in positive territory with the Dow up 15 points and the Nasdaq up 13 points. The bond market is currently up 10/32, which will likely improve this morning's mortgage rates by approximately .375 of a discount point.

There were two pieces of economic data released this morning. The first was April's Personal Income and Outlays data that showed personal income and spending both rose 0.2% last month. Forecasts were calling for an increase of 0.2% in both readings, indicating that consumer spending and their ability to spend rose modestly.

The second report of the day came from the University of Michigan who updated their Index of Consumer Sentiment for May. Today's revision revealed a reading of 59.8 that was up slightly from the earlier estimate of 59.5. This means that consumer sentiment was slightl y stronger this month than previously thought, but not enough to have much of an impact on bonds or mortgage pricing.

Even with this morning's gains, I still believe they overall tone in the bond market is more negative than positive. This will likely lead to not only volatility in bonds but also possibly intra-day changes to mortgage rates. Accordingly, I am holding the lock recommendations for the time being.

Next week is busy with several important economic releases scheduled for the markets to digest. It begins with Monday's release of May's ISM manufacturing index and ends with Friday's posting of May's Employment report. It will likely be another active week in the mortgage market, but look for 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.
Posted by Cam Wallaert on May 30th, 2008 12:00 PMPost a Comment (0)

Rate Lock advisory
May 29th, 2008 7:57 PM
 


Thursday's bond market has opened in negative territory as investor interest appears to be shifting towards stocks and non-mortgage related securities. The stock markets are showing gains with the Dow up 47 points and the Nasdaq up 14 points. The bond market is currently down 23/32, which will likely push this morning's mortgage rates higher by approximately .500 of a discount point.

There were two pieces of economic data released this morning. The first was the preliminary revision to the 1st quarter Gross Domestic Product (GDP). It matched forecasts with a 0.9% annual pace of growth that was an upward revision from the initial estimate. An important inflation reading in the data also matched forecasts, so today's report didn't reveal any surprises.

The Labor Department gave us last week's unemployment figures, saying that 372,000 new claims for benefits were filed during the week. This was slightly above the 370,000 that was expected, so had little impact on bond trading or mortgage rates because this data is generally of low importance to the markets unless it varies greatly from forecasts.

Tomorrow brings us the release of two pieces of data with the first being April's Personal Income and Outlays data at 8:30 AM. This report gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.2% rise in income and a 0.2% increase in spending. Weaker readings would be considered good news for bonds and mortgage rates.

The last report of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. It measures consumer willingness to spend by tracking their confidence in their own f inancial situations. An upward revision from the preliminary 59.5 reading would be considered a negative for bonds.

Yesterday's bond weakness that has carried over into this morning's trading pretty much answers the question proposed yesterday if 4.00% is going to be a level of upward resistance. There seemed to be very little resistance as bond prices dropped over the past 24 hours and the yield on the benchmark 10-year Note shot up to 4.10%. I suspect that this may now be the lower end of a new trading range if this level holds for another day. That means that bond prices are more likely to fall than they are to rise, leading to upward movement in yields and mortgage rates. Accordingly, I am holding the lock recommendations across the board until we have stability below that level.

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.
Posted by Cam Wallaert on May 29th, 2008 7:57 PMPost a Comment (0)

FHASECURE PLAN
May 29th, 2008 1:26 PM

BUSH ADMINISTRATION TO IMPLEMENT FHASECURE EXPANSION USING FAIR, FLEXIBLE PREMIUM PRICING
FHA prepares to assist more struggling homeowners while protecting taxpayers from risk

WASHINGTON - The Bush Administration today issued final guidance that will permit its flagship mortgage insurance program to assist more homeowners who are struggling to keep up with their high-cost subprime adjustable rate mortgages. To ensure taxpayers do not assume the cost of this expansion, HUD's Federal Housing Administration (FHA) will implement a fair and flexible premium pricing structure beginning July 14, 2008.

Modifications to FHASecure will help homeowners who can no longer afford their mortgages and missed up to three monthly mortgage payments over the past 12 months. As an alternative to foreclosure, eligible borrowers can refinance with FHA and lenders can voluntarily write down the outstanding subprime mortgage principal balances. Implementation of FHA's new premium pricing plan on July 14 will coincide with the start date to expand FHASecure.

"With a flexible premium structure, FHA can fulfill its mission of assisting families who do not have access to prime-rate financing. Fair pricing will allow FHA to reach more troubled homeowners without placing excessive risk on its insurance fund,"; said HUD Deputy Secretary Roy A. Bernardi.

Currently, FHA has a 'one size fits all' premium structure that charges borrowers 1.50 percent of the loan balance upfront and .50 percent annually regardless of their credit standing. FHA feels this approach does not treat borrowers equitably and may put the FHA insurance fund at risk. Under the new rule, FHA's upfront mortgage insurance premium will range from 1.25 percent to 2.25 percent. Borrowers must continue to adhere to FHA's strict underwriting criteria. By charging different premiums, FHA will operate like most other insurance companies. This premium structure will preserve lower premium costs for FHA's traditional borrowers, including low-income and minority families who have a strong credit history and save for a downpayment.

By charging slightly higher premiums based on risk, FHA will be able to extend the benefits of its FHASecure program to more homeowners affected by the volatility in the mortgage market. Borrowers refinancing into FHA from the subprime market are better off, even with slightly higher mortgage insurance premiums, because FHA insurance gives them access to substantially lower interest rates, and lowers their overall mortgage costs. The difference between the existing 1.50 percent upfront premium and a 2.25 percent premium for a $150,000 mortgage is only about $7 per month. With families turning to FHA in record numbers, the agency is on pace through its expansions to help approximately 500,000 families refinance into its affordable mortgage product by the end of this year.

"Charging borrowers a fair premium based on their credit risk means that they pay their own way, allows FHA to reach more borrowers, and helps create a more financially sound FHA. That's good news since FHA, like any other insurance company, supports its flagship program through its premiums - not taxpayer dollars,"; said Assistant Secretary for Housing - Federal Housing Commissioner Brian D. Montgomery.

FHA has the statutory authority to charge as much as 2.25 percent for the upfront premium and .55 percent for the annual premium. This premium structure will give borrowers an incentive to improve their credit and thereby pay lower premiums. Today's announcement will allow FHA to offer a range of premiums, depending on the level of risk borrowers represent based on their credit profile and the amount of their downpayment. In other words, to determine a fair premium, FHA will look at the borrower's financial responsibility and how much they are willing to invest in their home.

Posted by Cam Wallaert on May 29th, 2008 1:26 PMPost a Comment (0)

Rate Lock Info for Tuesday May 27 2008
May 27th, 2008 4:44 PM


Tuesday's bond market has opened down slightly despite a weaker than expected consumer confidence reading. The stock markets are mixed with the Dow down 10 points and the Nasdaq up 9 points. The bond market is currently down 7/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Conference Board started this week's economic releases with their Consumer Confidence Index (CCI) May. It showed a weaker than expected level of confidence with a reading of 57.2 when it was forecasted to stand at 60.0. This was the lowest reading in 16 years, indicating that consumers are not very optimistic about their personal financial situations. This is considered good news for bonds and mortgage rates because it usually means consumers are less likely to make large purchases in the near future.

April's New Home Sales data was also released today, revealing a higher level of sales than was expected. However , today's report also revised March's sales lower. This means that sales were weaker than thought in March, but the month to month increase was fairly large. This is bad news for bonds because a weak housing sector usually translates into weaker economic conditions in general. But, this data is not considered to be of high importance to the bond market and mortgage rates, so its impact on today's pricing was fairly minimal.

Tomorrow morning we will see April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show a decline in new orders of approximately 1.5%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a larger than expected drop, we should see rates improve tomorrow morning.

If I were considering financing/refinancin g 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.
Posted by Cam Wallaert on May 27th, 2008 4:44 PMPost a Comment (0)

Rate lock info for Monday May 26th
May 26th, 2008 9:21 AM


This holiday shortened week brings us the release of six important economic reports or news releases. Two of the six are considered to be of high importance to the bond market and mortgage pricing with one being of low importance. The remaining reports are considered to be of moderate importance to the markets. The financial and mortgage markets are closed tomorrow in observance of the Memorial Day holiday and will reopen Tuesday morning.

The Conference Board will start the week's releases by posting their Consumer Confidence Index (CCI) at 10:00 AM Tuesday. This is a very important release that measures consumer willingness to spend. If the index rises, it indicates that consumers feel better about their personal financial situations and are more apt to make large purchases. If confidence is sliding, analysts think consumer spending may slow in the near future. The latter is good news for the bond market because it should ease concerns about inflationary pr essures, making bonds more attractive to investors. This should boost bond prices and push mortgage rates lower Tuesday morning. It is expected to show a reading of 61.0 after April's 62.3 reading.

April's New Home Sales data will be released late Tuesday morning. This report gives us a measurement of housing sector strength and future mortgage credit demand. However, it is actually the least important release of the week and probably will not have much of an impact on mortgage pricing. It is expected to show another decline in sales.

Wednesday morning we will see April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show a decline in new orders of approximately 0.7%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a large r than expected drop, we should see rates improve Wednesday morning.





The first of two revisions to the 1st quarter Gross Domestic Product (GDP) will be released at 8:30 AM Thursday. The second revision to this report comes next month but isn't expected to have much of an impact on the financial markets. The GDP is the sum of all goods and services produced in the U.S. and is considered to be the best indicator of economic growth. Last month's preliminary reading revealed a 0.6% annual rate of growth. Analysts expect an upward revision to this reading with the consensus being a .9% annual rate. If true, we may see the bond market react negatively and mortgage rates move higher.

Friday brings us the release of two pieces of data with the first being April's Personal Income and Outlays data at 8:30 AM. This report gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.4% rise in income and a 0.4% increase in spending. Weaker readings would be considered good news for bonds and mortgage rates.
Posted by Cam Wallaert on May 26th, 2008 9:21 AMPost a Comment (0)

Fannie May poised to scrap policy over down payment
May 23rd, 2008 6:28 PM

I thought you might find this article interesting Fannie Is Poised to Scrap Policy Over Down Payment Fannie Mae is expected to announce Friday that it is scrapping a policy requiring higher down payments on home mortgages in areas where house prices are falling.

The change comes in response to protests from vital political allies of the government-sponsored provider of funding for mortgages, including the National Association of Realtors, the National Association of Home Builders and organizations that promote affordable housing for low-income people.

Those various groups have said the policy is hurting an already feeble housing market by shutting out too many potential buyers.

The current policy, adopted in December and now due to end June 1, limits loan amounts in areas with declining home prices, including most of the densely populated parts of the country.

For instance, if a loan program normally allows people to borrow up to 100% of the estimated property value, the maximum is cut to 95% in "declining markets."

Under the new policy that is taking effect next month, Fannie will have the same maximum loan percentages across the country for people purchasing single-family homes that they intend to occupy, according to people familiar with the plan.

For borrowers approved by Fannie's automated underwriting program, the maximum generally will be 97%. For those approved by other means, the maximum will be 95%. (Fannie also has some loan programs, typically offered through state or local housing agencies or nonprofit groups, that allow certain borrowers to make no down payment.) Fannie is expected to continue to have variable down-payment requirements on mortgages considered riskier, such as those used to buy investment or vacation homes.

Fannie and its main rival, Freddie Mac, own or guarantee the bulk of U.S. home mortgages and so set nationwide standards for lenders. Freddie also has a policy requiring higher down payments in declining markets. But Freddie earlier this month said it wouldn't require lenders to drop below 95% of the estimated value.

By JAMES R. HAGERTY May 16, 2008; Page A3

Posted by Cam Wallaert on May 23rd, 2008 6:28 PMPost a Comment (0)

Rate Locks for Friday May 23rd 2008
May 23rd, 2008 12:03 PM


Friday's bond market has opened in positive territory as stocks react negatively to rising oil prices. The stock markets are showing sizable losses with the Dow down 111 points and the Nasdaq down 27 points. The bond market is currently up 14/32, which will likely improve this morning's mortgage rates by approximately .1250 - .250 of a discount point.

The National Association of Realtors gave us today's only semi-relevant economic news with the release of April's Existing Home Sales report. It revealed a decline in sales, but not as much of a drop as expected. However, the data has not influenced bond trading enough to affect mortgage rates this morning.

The bond market will close at 2:00 PM today ahead of Monday's Memorial Day Holiday and will remain closed until Tuesday morning. The stock markets will also be closed Monday. I don't think that this will have an impact on this afternoon's mortgage rates.

Next week brings us the releas e of several pieces of important economic data. There are relevant reports scheduled for release each of the four business days, so we will likely see some volatility in rates. 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... 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.
Posted by Cam Wallaert on May 23rd, 2008 12:03 PMPost a Comment (0)

Mortgage Rates DROP
May 23rd, 2008 8:46 AM

The benchmark 30-year fixed-rate mortgage fell 17 basis points, to 6.02 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.44 discount and origination points. One year ago, the mortgage index was 6.42 percent; four weeks ago, it was 6.11 percent.

The benchmark 15-year fixed-rate mortgage fell 15 basis points, to 5.63 percent. The benchmark 5/1 adjustable-rate mortgage fell 15 basis points, to 5.71 percent. The benchmark jumbo 30-year fixed fell 12 basis points, to 7.29 percent.

The last time the 30-year rate was lower was in Bankrate's April 9 survey, when it slipped to 5.96 percent.

With housing prices at there lowest in 2 years now could be the time to jump off the fence and get in on a great deal.

 

Posted by Cam Wallaert on May 23rd, 2008 8:46 AMPost a Comment (0)

Rate Lock for May 14th 2008
May 21st, 2008 11:39 AM


Wednesday's bond market has opened in negative territory as investors prepare for today's FOMC minutes. The stock markets are posting another round of losses with the Dow down 97 points and the Nasdaq down 8 points. The bond market is currently down 9/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

There was no relevant economic news posted today. The only relevant news we really need to worry about are the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about what the Fed's next move will be. 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 no relevant economic data except for weekly unemployment claims from the Labor Department. T hey are expected to report that 372,000 new claims for benefits were filed last week. However, since this data tracks only a week's worth of numbers, it likely will not influence mortgage rates unless it varies greatly from forecasts.

I would not be surprised to see stock prices continue to fall over the next few days. They seem to be reacting to high oil prices. If this is true, we should see funds shift into bonds as a safe haven, leading to improvements in mortgage rates. Accordingly, I am holding the float recommendations for short and longer periods for the time being.

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 o nly an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Posted by Cam Wallaert on May 21st, 2008 11:39 AMPost a Comment (0)

Rte Lock Tuesday May 20th 2008
May 20th, 2008 12:56 PM


Tuesday's bond market has opened in positive despite stronger than expected inflation news. The stock markets are showing significant losses with the Dow down 179 points and the Nasdaq down 30 points. The bond market is currently up 8/32, which should improve this morning's mortgage rates by approximately .250 of a discount point.

The Labor Department gave us April's Producer Price Index (PPI) this morning, showing a 0.2% increase in the overall reading. That was below the 0.4% that was forecasted. However, the bad news came in the more important core reading that showed a 0.4% increase compared to the 0.2% that was expected. This means that excluding more volatile food and energy prices, inflationary pressures were much stronger at the producer level than analysts had thought. That is a negative for bonds because those price increases will likely trickle down to the consumer level of the economy eventually.

Tomorrow's only news is the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about what the Fed's next move will be. 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.

I would not be surprised to see stock prices continue to fall over the next few days. They seem to be reacting to high oil prices. If this is true, we should see funds shift into bonds as a sage haven, leading to improvements in mortgage rates. Accordingly, I am holding the float recommendations for the time being.

If I were considering financing/refinancing a home, I would.... Float 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 pl ace 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.
Posted by Cam Wallaert on May 20th, 2008 12:56 PMPost a Comment (0)

Mortgage News for Tuesday May 20th 2008
May 20th, 2008 12:56 PM


Tuesday's bond market has opened in positive despite stronger than expected inflation news. The stock markets are showing significant losses with the Dow down 179 points and the Nasdaq down 30 points. The bond market is currently up 8/32, which should improve this morning's mortgage rates by approximately .250 of a discount point.

The Labor Department gave us April's Producer Price Index (PPI) this morning, showing a 0.2% increase in the overall reading. That was below the 0.4% that was forecasted. However, the bad news came in the more important core reading that showed a 0.4% increase compared to the 0.2% that was expected. This means that excluding more volatile food and energy prices, inflationary pressures were much stronger at the producer level than analysts had thought. That is a negative for bonds because those price increases will likely trickle down to the consumer level of the economy eventually.

Tomorrow's only news is the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about what the Fed's next move will be. 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.

I would not be surprised to see stock prices continue to fall over the next few days. They seem to be reacting to high oil prices. If this is true, we should see funds shift into bonds as a sage haven, leading to improvements in mortgage rates. Accordingly, I am holding the float recommendations for the time being.

If I were considering financing/refinancing a home, I would.... Float 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 pl ace 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.
Posted by Cam Wallaert on May 20th, 2008 12:56 PMPost a Comment (0)

Washington Report: Risk Based Pricing
May 20th, 2008 7:57 AM

Washington Report: Risk-Based Pricing
The Federal Housing Administration shook up Washington's mortgage and real estate leaders last week by announcing that it's shifting its entire production line to risk-based pricing -- starting this summer.

FHA plans to abandon its 74-year policy of charging all borrowers the same insurance premiums and interest rates, and to move to a system where applicants who present high risks -- low credit scores and low down payments -- pay higher premiums.

Under the new system, applicants with FICO scores below 560 and down payments below five percent will be charged a two and a quarter percent premium up front and 0.55 percent annually.

Low risk borrowers will almost all pay less than they do today: A 1.25 percent premium up front, and annual renewals of half a percent with down payments of 10 percent or more. High FICO borrowers with score above 680 making down payments of less than 5 percent will also save on upfront premiums, paying one and a quarter percent.


Read the Full Story: http://realtytimes.com/rtpages/20080519_washingtonreport.htm

Posted by Cam Wallaert on May 20th, 2008 7:57 AMPost a Comment (0)

Fridays 5-16-008 Mortgage News
May 16th, 2008 11:32 AM


Friday's bond market has opened flat following the release of mixed economic data and new record oil prices. The stock markets are showing losses with the Dow down 39 points and the Nasdaq down 17 points. The bond market is currently up 1/32, but we should see an improvement in this morning's mortgage rates of approximately .375 of a discount point due to strength in bonds late yesterday.

Today's data gave us mixed results. April's Housing Starts showed stronger than expected results with an increase in starts of new homes. It was expected to reveal another decline in new home starts, indicating that the housing sector was stronger than thought. This is negative news for bonds because the weak housing sector is believed to have significantly contributed to the weakness in the overall economy.

The second report of the day was May's preliminary reading to the University of Michigan's Index of Consumer Sentiment. It showed a reading of 59.5 that w as lower than forecasts, meaning that consumers were less optimistic about their own financial situations than many had thought. This is good news for the bond market and mortgage rates because waning confidence usually means consumers are less apt to make large purchases in the near future.

Next week is light in the number of reports scheduled for release, but it does bring us a couple of important events. The first piece of data is Monday's release of the Leading Economic Indicators (LEI). It is a moderately important report but can influence bonds enough to lead to slight changes in mortgage rates. Look for more details on next week's events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Float 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 ov er 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.
Posted by Cam Wallaert on May 16th, 2008 11:32 AMPost a Comment (0)

Mortgage News
May 15th, 2008 12:05 PM
Thursday's bond market has opened in positive territory after this morning's economic data showed much weaker manufacturing activity than was expected. The stock markets are showing modest gains with the Dow up 9 points and the Nasdaq up 7 points. The bond market is currently up 5/32, which should keep this morning's mortgage rates near yesterday's levels.

April's Industrial Production report was released this morning, revealing a surprising 0.7% decline in output. It was expected to show that production at U.S. factories, mines and utilities fell 0.3%. This is good news for bonds and mortgage rates because slowing manufacturing activity is an indication of a weakening economy.

The Labor Department gave us last week's unemployment figures, saying that 371,000 new claims for benefits were filed. Since this data tracks only a week's worth of claims and it nearly matched forecasts, this data had little impact on bond trading or mortgage rates today .

There are two pieces of data due to be posted tomorrow. April's Housing Starts is the first and is the least important of the two. 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 a decline in new starts from March's readings. But, 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.

The last report of the week is May's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. It is expected to show a reading of 62.0, which would be a small decline from last month's final reading. If it shows a decline in consumer confidence, bond prices will likely rise. This should le ad to mortgage rates moving slightly lower tomorrow.

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.
Posted by Cam Wallaert on May 15th, 2008 12:05 PMPost a Comment (0)
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