Daily Mortgage Interest Rate Updates for Massachusetts

Massachusetts Mortgage Rate Commentary 12/29/2009

2009-12-29T10:16:00.001-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened slightly in positive territory following mixed trading in stocks and no surprises in this week’s only significant economic news. The stock markets are relatively calm with the Dow up 6 points and the Nasdaq down 3 points. The bond market is currently up 2/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point.

The Conference Board posted their Consumer Confidence Index (CCI) for December late this morning, showing a reading of 52.9. This nearly matched forecasts and indicates that consumer sentiment about their own financial situations was close to where analysts had thought. That can be considered favorable for mortgage rates with the recent negative tone in the bond market. The lack of a higher than expected reading brings somewhat of a sigh of relief following the downward move in bonds over the past two weeks.

Today also brings us the first of two important Treasury auctions on this week’s calendar. 5-year Treasury Notes will be sold today while 7-year Notes will be auctioned tomorrow. Yesterday’s 2-year Note sale, that was less important to mortgage rates than today’s and tomorrow’s sales will be, did not get an overly strong interest from investors. That raises concern that the other two sales may also generate a lackluster demand. If that is the case, we may see further weakness in bonds before the year-end and possibly upward revisions to mortgage rates. If we happen to get good results in the sales, particularly tomorrow’s more important 7-year Note sale, bond prices should move higher and mortgage rates move lower. Results of each auction will be posted at 1:00 PM ET each day, so the potential for afternoon revisions to rates is fairly high today and tomorrow.

There is no relevant economic news scheduled for release tomorrow except for weekly unemployment figures. The Labor Department is expected to announce that 460,000 new claims for benefits were filed last week. This would be an increase from the previous week, but unless we see a large variance I don’t think this data will have much of an impact on mortgage rates.

The bond market will close at 2:00 PM ET Thursday and all of the U.S. financial markets will be closed Friday in observance of the New Year’s Day holiday. They will reopen for regular hours next Monday morning.

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 over 60 days from now...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/28/09

2009-12-28T10:56:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened in negative territory following minor gains in stocks. The stock markets are starting the week in positive ground, but not by much. The Dow is currently up 12 points while the Nasdaq has gained 4 points. The bond market is currently down 8/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point compared to Thursday’s morning rates.

There is no relevant news scheduled for release today, leaving the stock markets to heavily influence bond trading and mortgage rates. If the major stock indexes remain near current levels, I suspect that bond prices and mortgage rates will follow suit today.

This week brings us the release of only one piece of economic data that is considered important to mortgage rates in addition to two important Treasury auctions. It is another holiday-shortened week with the New Years Day holiday Friday, so the data may have a heavier impact on trading than usual if it varies from forecasts by much. The bond market will close early Thursday and remain closed Friday as it did last week. With that type of schedule, many traders will not be working the latter part of the week, so any unexpected news or data may lead to a larger than usual reaction in the markets.

The only important release comes late tomorrow morning when the Conference Board will post its Consumer Confidence Index (CCI) for December. This is a pretty important release because it measures consumer willingness to spend. If consumers are more confident in their personal financial situations, they are more apt to make large purchases. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely by market participants and can have a significant influence on mortgage rate direction. Current forecasts are calling for an increase in confidence from November’s reading of 49.5. Analysts are expecting tomorrow’s release to show a reading of 53.0. The lower the reading, the better the news for bonds and mortgage pricing.

This week also has Treasury auctions scheduled the first three days. The two that are most likely to influence mortgage rates are tomorrow’s 5-year and Wednesday’s 7-year Note sales. If those sales are met with a strong demand, particularly Wednesday’s auction, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates.

The bond market will close at 2:00 PM ET Thursday and all of the U.S. financial markets will be closed Friday in observance of the New Year’s Day holiday. They will reopen for regular hours next Monday morning.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/23/09

2009-12-23T11:20:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened in positive territory after this morning’s economic data gave us favorable results. The stock markets are mixed with the Dow down 11 points and the Nasdaq up 5 points. The bond market is currently up 11/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.

November’s Personal Income and Outlays report was the first of today’s three releases. It showed that personal income rose 0.4% last month while spending rose 0.5%. Both of these readings were below forecasts, indicating that consumer ability to spend and their actual spending was not as strong as thought. This is fairly good news for bond and mortgage rates. They still posted strong increases that point towards a strengthening economy, but since they fell short of expectations we can consider the readings positive for bonds.

The second report also gave us a bit of good news. The University of Michigan revised their Index of Consumer Sentiment for December, posting a 72.5 reading that was lower than the previous estimate of 73.4. Current forecasts were calling for a reading of 73.8. This index measures consumer confidence, which is relevant to the markets because falling confidence usually means consumers are less apt to make large purchases in the near future. Slowing consumer spending indicates slower economic growth and makes bonds more attractive to investors.

The last report of the day also gave us results that were positive for bonds and mortgage rates, but since this was the week’s least important report its impact on rates has been minimal. November’s New Home Sales report revealed an 11.3% decline in sales of newly constructed homes. This was a huge difference from forecasts and hints that part of the housing sector is not stable yet.

Tomorrow’s only important data is November’s Durable Goods Orders that will be posted early morning. This data gives us an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years. Analysts are expecting the report to show a 0.5% increase in new orders. A decline in orders would indicate that the manufacturing sector was weaker than many had thought. This would be good news for the bond market and should drive mortgage rates lower. However, a larger than expected rise in orders could lead to mortgage rates moving higher early tomorrow.

The stock and bond markets will close early tomorrow ahead of the Christmas Day holiday and will remain closed Friday. They will reopen Monday morning for regular trading hours. I strongly suspect that trading will be thin tomorrow as many firms keep only a skeleton staff on Christmas Eve. This will likely be the same for many mortgage companies also, so it is highly unlikely to see any afternoon revisions to mortgage rates 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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/21/2009

2009-12-21T08:18:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened down sharply following early stock gains that has shifted funds away from the bond market. The stock markets are rallying with the Dow up 120 points and the Nasdaq up 24 points. The bond market is currently down 27/32, which will likely push this morning’s mortgage rates higher by approximately .750 of a discount point compared to Friday’s morning rates. Most of this increase comes this morning, but some of it came from weakness late Friday.

There is no relevant economic news scheduled for release today. As expected, the stock markets are driving bond trading and this morning’s mortgage pricing. The early interest in stocks has caused bond selling and moving funds into stocks where better returns are possible. The result is higher mortgage rates this morning.

This holiday-shortened trading week brings us the release of six monthly or quarterly economic reports. Only a couple of the reports being released are considered to be of high importance to the markets. With the Christmas holiday falling during the week we can expect very thin trading, meaning that we may see a larger reaction than normal to some news because there will be fewer traders working and less transactions being made. This will become more evident as the week progresses.

Tomorrow has two reports scheduled for release. The first is the final revision to the 3rd Quarter GDP. I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 2.8% annual pace during the quarter and this month’s revision is expected to show the same. A significant upward revision would be considered bad news for bonds, but since this data is quite aged at this point I don’t think it will have much of an impact on mortgage rates tomorrow.

The second report of the day is November’s Existing Home Sales report. This release will come from the National Association of Realtors while Wednesday’s New Home Sales data is a Commerce Department report. Both give us a measurement of housing sector strength and mortgage credit demand, however, neither are considered to be of high importance. And both of the reports are expected to show a small increase in sales. Weaker than expected readings would be considered positive for bonds and mortgage rates because they hint at a weakening housing market, but unless the actual reading varies greatly from forecasts the results will probably have little or no impact on mortgage rates.

Overall, I am expecting to see some movement in the markets and mortgage rates this week. The bond market will close early Thursday and will be closed all day Friday in observance of the Christmas Day holiday. This means that firms that trade in bonds will likely be keeping only a skeleton staff the latter part of the week and raises the possibility of a stronger reaction to surprises in the economic data than we normally would see. Accordingly, proceed cautiously this week if still floating an interest rate and closing in the immediate future.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/18/2009

2009-12-18T08:26:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened down slightly with no relevant economic news scheduled for release today. The stock markets are showing relatively minor gains with the Dow up 8 points and the Nasdaq up 16 points. The bond market is currently down 4/32, but I am still expecting to see a small improvement in this morning’s mortgage rates due to strength late yesterday.

We likely will see plenty of movement in stocks today as a result of option expirations. Therefore, we cannot rely on stocks to give direction to bonds since the movement in the major stock indexes will be due more to the expirations than direct concerns or optimism about the economy. In other words, it will likely be a directionless day for unless something unexpected occurs. This will likely prevent seeing changes to mortgage rates this afternoon.

Next week brings us the release of a couple of important economic reports for the markets to digest. Included in next week’s releases are a couple of housing sector reports, data on personal income and spending along with a high profile manufacturing report. There is no relevant data scheduled for release Monday, so look for the stock markets to influence bond trading and mortgage pricing.

The next two weeks are holiday’s shortened trading weeks due to the Christmas and New Year’s holidays. As we get closer to those particular days, the market tends to thin as traders head home early for the holiday weekends. This sometimes leads to larger than normal reactions to some of the key reports or any significant news releases. But 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... 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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/17

2009-12-17T08:50:00.001-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened in positive territory following a weak open in stocks. The stock markets are reacting to overseas losses and concerns about the economy after yesterday’s FOMC comments. The Dow is currently down 98 points while the Nasdaq has lost 23 points. The bond market is currently up 17/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount compared to yesterday’s morning rates.

The Labor Department gave us last week’s unemployment figures early this morning. They announced that 480,000 new claims for unemployment benefits were filed last week. This was good news for bonds because it was a higher number of claims than was expected. However, this data usually has little impact on mortgage rates because it tracks only a week’s worth of new claims.

Late this morning, the Conference Board posted their Leading Economic Indicators (LEI) for November. It showed a 0.9% increase, meaning that they think economic activity will be stronger over the next several months than many analysts had thought. This can be considered negative news for bonds, but since this is only a moderately important report, its impact on bond trading and mortgage rates has been minimal.

There is no relevant economic data scheduled for release tomorrow. We likely will see plenty of movement in the stock markets tomorrow as a result of option expirations. Therefore, we cannot rely on stocks to give direction to bonds since the movement in the major stock indexes will be due more to the expirations than direct concerns or optimism about the economy. In other words, it will likely be a directionless day for bonds tomorrow unless something unexpected occurs.

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 over 60 days from now...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/16/2009

2009-12-16T10:48:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened in positive territory after this morning’s inflation data did not cause concern like yesterday’s PPI release did. The stock markets are also showing gains with the Dow up 40 points and the Nasdaq up 15 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.

This morning’s major news came from the Labor Department who reported that November’s Consumer Price Index (CPI) rose 0.4% and that the more important core data reading was unchanged from October’s level. The overall reading matched forecasts but the core data fell short of the 0.2% that was expected. This means that inflation at the consumer level of the economy was not nearly as strong as feared after yesterday’s Producer Price Index was posted. This is good news for the bond market and mortgage rates.

Today’s second release was November's Housing Starts that gave us an indication of housing sector strength. It matched forecasts of an 8.9% rise in construction starts of new homes, but this data is the least important this week’s reports. Its impact on this morning’s bond trading and mortgage rates has been minimal.

Later today, the two-day FOMC meeting with adjourn. There is not much debate about what the Fed will do at this meeting with little chance of them raising key short-term interest rates. Therefore, the post meeting statement will likely be the sole source of a market reaction. This statement has the potential to have a significant influence on the markets and mortgage rates as investors look for any indication of what and when the Fed may do next. Generally speaking, the bond market would like to hear something that indicates the Fed will not be raising rates anytime soon.

Look for an update to this report shortly after the markets have had an opportunity to react to the meeting’s results.

Tomorrow morning does bring us the release of a moderately important when November’s Leading Economic Indicators (LEI). This 10:00 AM release attempts to measure or predict economic activity over the next three to six months. It is expected to show a sizable increase in activity, meaning that it predicts any expanding economy over the next several months. This probably will not have much of an impact on bond prices or affect mortgage rates unless it exceeds current forecasts of a 0.7% increase from October’s reading. The lower the reading, the better the news for bonds. If it shows a smaller increase, the bond market may move slightly higher, improving mortgage rates slightly.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Commentary 12/14

2009-12-15T12:54:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened well in negative territory following some surprising inflation news. The stock markets are relatively calm with the Dow down 10 points and the Nasdaq nearly unchanged. The bond market is down 13/32, which should push this morning’s mortgage rates higher by approximately .250 - .375 of a discount point.

The Labor Department gave us the news that fueled this morning’s bond selling. They said that the Producer Price Index (PPI) spiked 1.8% last month and that the core data reading rose 0.5%. Both of these readings were more than twice forecasts, meaning inflationary pressures were strong at the producer level of the economy last month. This is bad news for bonds and mortgage rates because inflation erodes the value of a bond’s future fixed interest payments, making them less attractive to investors. The result usually is bond selling and higher mortgage rates.

November’s Industrial Production data also gave us stronger than expected results with a 0.8% increase. Forecasts were calling for a 0.5% increase, indicating that manufacturing activity at U.S. factories, mines and utilities was stronger than thought. This is also bad news for bonds because it points towards a strengthening economy.

This week’s most important economic data tomorrow’s release of November’s Consumer Price Index (CPI). It is the sister report of today’s Producer Price Index, except it tracks inflationary pressures at the more important consumer level of the economy. Current forecasts call for an increase of 0.4% in the overall index and a 0.2% rise in the core data reading. The core data is watched more closely because it excludes more volatile food and energy prices, giving a more stabile reading for analysts to consider.

November's Housing Starts report will also be released tomorrow morning, but I don’t see it causing much movement in mortgage rates. This report, which is expected to show a sizable increase in starts of new homes, gives us an indication of housing sector strength and future mortgage credit demand. However, it can be considered the least important of this week’s news.

The last FOMC meeting of the year began today and will adjourn at 2:15 PM ET tomorrow. There is not much debate about what the Fed will do at this meeting with little chance of them raising key short-term interest rates. Therefore, the post meeting statement will likely be the sole source of a market reaction. This statement has the potential to have a significant influence on the markets and mortgage rates as investors look for any indication of what and when the Fed may do next. Generally speaking, the bond market would like to hear something that indicates the Fed will not be raising rates anytime soon.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/14/09

2009-12-14T09:41:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened in positive territory despite early gains in stocks. The stock markets are reacting favorably to both international (Dubai World) and domestic (Citi) news that eased some concerns in the market. The result is the Dow up 28 points while the Nasdaq has gained 14 points. The bond market is currently up 3/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point over Friday’s rates.

There is no relevant economic data scheduled for release today, but the rest of the week brings us several reports and events that are likely to cause movement in mortgage rates. Besides the five relevant economic reports that will be posted between tomorrow and Thursday morning, there also is another Federal Open Market Committee (FOMC) meeting to watch. Two of the five economic reports are considered to be of high importance, so the data should have a heavy influence on the markets and mortgage rates this week.

The first relevant report of the week is one of the two highly important ones. The Labor Department will release November’s Producer Price Index (PPI) early tomorrow morning. This index measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If tomorrow's release reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and drive mortgage rates higher. If we see in-line or weaker than expected numbers, the bond market should fair well and mortgage rates should fall. Current forecasts are showing a 0.8% increase in the overall index and a 0.2% rise in the core data.

November’s Industrial Production data is also scheduled to be posted tomorrow morning, but a little later than the PPI. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Analysts are expecting it to show a 0.5% increase in output. A smaller than expected rise would be good news for bonds, while a stronger than expected reading may result in slightly higher mortgage pricing. However, the PPI release is more important to the markets than this data is.

Overall, expect to see a pretty volatile week in the financial markets and mortgage pricing. The most important day of the week is certainly Wednesday with the CPI and the FOMC meeting both scheduled. However, we may see noticeable movement in rates tomorrow also. Please maintain contact with your mortgage professional if you have not locked an interest rate yet because we may see sizable changes to mortgage pricing more than one day this week.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/11/09

2009-12-11T08:09:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened in negative territory following the release of much stronger than expected economic data. The stock markets have reacted fairly positive to the news with the Dow up 57 points and the Nasdaq up 6 points. The bond market is currently down 17/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

This morning big news was November’s Retail Sales report that showed a whopping 1.3% spike in sales. This was more than twice the latest forecast of a 0.6% jump. Also, if volatile auto-related sales are excluded, sales rose 1.2%. This reading is triple the forecast of a 0.4% increase, indicating that consumers spent much more last month than many had thought. That is bad news for bonds because consumer spending makes up two-thirds of the U.S. economy. If consumer spending is rapidly growing, fuel is being added to the overall economy. Generally speaking, weaker economic conditions create a more favorable environment for bonds and mortgage rates.

The second report of the day also gave us much stronger than expected results. The University of Michigan posted their Index of Consumer Sentiment for December late this morning. They announced a reading of 73.4 that exceeded forecasts of a 68.9 reading. This means that surveyed consumers were more optimistic about their own financial situations than was expected. That is not favorable news for bonds because consumers tend to spend more when they are more comfortable with their own finances. This leads to higher levels of spending and helps the economy to grow.

Following suit of Wednesday’s 10-year auction, yesterday’s 30-year Bond sale also was weak. Several measurements of how successful the sale goes gave us poor results. This means that investors may be losing interest in acquiring new U.S. debt. That could be a problem for mortgage rates if it continues.

Next week is pretty busy in terms of economic releases and related events. There is nothing of importance scheduled for Monday, but the rest of the week brings us data that includes two key inflation readings and the last FOMC meeting of the year. It will likely be another active week for mortgage rates, but look for details on next week’s event sin 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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/10/09

2009-12-10T09:32:00.001-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened well in negative territory following yesterday’s weak Treasury auction. The stock markets are showing gains with the Dow up 79 points and the Nasdaq up 14 points. The bond market is currently down 16/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

This morning’s economic news wasn’t important enough to heavily influence bond trading, but it has contributed somewhat to the early selling. October’s Goods and Services Trade Balance report showed that the U.S. trade deficit stood at a smaller than expected $32.9 billion. This data doesn’t usually directly affect bond trading, but it does influence the value of the U.S. dollar versus other currencies. A strong dollar makes U.S. securities, including mortgage-related bonds, more attractive to international investors. But today’s release was the week’s least important and has not had an impact on mortgage rates.

The Labor Department gave us some favorable news with an announcement that 474,000 new claims for unemployment benefits were filed last week. This was a higher total than was expected, but this data is not important enough to erase the negative tone in bonds since yesterday’s auction results were posted.

As mentioned already, yesterday’s 10-year Note sale did not go very well. This means that investor appetite for longer-term U.S. debt was not as strong as hoped for. This also indicates that mortgage bonds, which are considered long-term securities, may see some pressure in the near future due to a lack of buyer interest. If that is true, we can expect to see mortgage rates rise in the near future. Today’s 30-year Bond sale is not as important as yesterday’s sale was, but if we do get a strong demand from investors bond prices could rise during afternoon trading. That may lead to afternoon improvements, but I am not too optimistic it will happen today.

November’s Retail Sales report will be released early tomorrow morning. This is one of the more important reports released each month since it tracks consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. It is expected to show a 0.6% increase in sales at retail level establishments, meaning consumer spending was stronger in November than in October. Since the market is expecting an increase, it will likely take a larger than expected jump in sales for the bond market to react negatively and mortgage rates to rise. A smaller than expected increase should lead to lower mortgage rates tomorrow.

Also tomorrow is the release of December’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly. However, with the Retail Sales data report before this data, I don’t expect it to affect mortgage rates much. It is expected to show a reading of 68.9, which would be an increase from last month’s final reading.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/9/2009

2009-12-09T10:09:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened relatively flat following an uneventful opening in stocks. The stock markets are mixed with the Dow up a couple of points and the Nasdaq down nearly the same. The bond market is practically unchanged from yesterday’s closing level, so I am expecting little change in this morning’s mortgage rates.

There is no relevant economic news being posted today, but we do have the first of this week’s two important Treasury auctions. The 10-year Note sale is being held today while 30-year Bonds will be sold tomorrow. Today’s sale is more important to mortgage rates than tomorrow’s is. If there was a strong demand from investors, we should see bond prices move higher after results are posted at 1:00 PM ET. This could lead to downward revisions to mortgage rates this afternoon. However, if the sale was met with a lackluster interest, there is a pretty decent possibility of seeing higher mortgage pricing later today.

October’s Goods and Services Trade Balance report will be posted early tomorrow morning. This report gives us the size of the U.S. trade deficit, but it is the week’s least important release. It is expected to show a $37.0 billion trade deficit. Unless it varies greatly from forecasts, I don’t expect it to affect mortgage pricing.

The Labor Department will post last week’s unemployment figures. They are expected to announce that 465,000 new claims for benefits were filed last week, up from the previous week. That would be considered favorable news for the bond market and mortgage rates, but the truth is that this data is not considered to be highly important because it tracks only a week’s worth of new claims. It usually takes a wide variance between the announced total of new claims and forecasts for them to have much of an impact on mortgage rates.

We do get some important economic data Friday morning when November’s Retail Sales report is released. This is one of the more important reports released each month since it tracks consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. It is expected to show a 0.7% increase in sales at retail level establishments, meaning consumer spending was stronger in November than in October. Since the market is expecting an increase, it will likely take a larger than expected jump in sales for the bond market to react negatively and mortgage rates to rise. A smaller than expected increase should lead to lower mortgage rates Friday.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/8/2009

2009-12-08T09:37:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened in positive territory again following early weakness in stocks. The stock markets are showing sizable losses with the Dow down 85 points and the Nasdaq down 6 points. The bond market is currently up 11/32, which should improve mortgage rates by approximately .250 - .375 of a discount point over yesterday’s morning rates.

There is no relevant economic news scheduled for release today or tomorrow. Therefore, I am expecting the stock markets to likely be the biggest influence on bond trading and mortgage rates today. If the major stock indexes move lower we may see bond prices move higher and mortgage rates improve this afternoon.

Tomorrow does bring us the first of this week’s two important Treasury auctions. The 10-year Note sale will be held Wednesday while 30-year Bonds will be sold Thursday. Wednesday’s auction is the more important of the two events and will likely influence mortgage rates more. Results of each sale will be posted at 1:00 PM ET. If they were met with a strong demand from investors, particularly international buyers, we should see afternoon strength in bonds and improvements to mortgage pricing those days.

There is no relevant economic news scheduled for release today, tomorrow or Wednesday. October’s Goods and Services Trade Balance report will be posted early Thursday morning. This report gives the size of the U.S. trade deficit, but it is the week’s least important release. It is expected to show a $37.0 billion trade deficit. Unless it varies greatly from forecasts, I don’t expect it to affect mortgage pricing.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/7/09

2009-12-07T12:37:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened in positive territory, recovering part of Friday’s sell-off. The stock markets are showing modest gains with the Dow up 20 points and the Nasdaq up 3 points. The bond market is currently up 8/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point from Friday’s morning rates.

This week is fairly light in terms of the number of economic releases scheduled for release. There are only three on the agenda but one of them is considered to be very important and can heavily influence the markets and mortgage pricing. In addition, there are two Treasury auctions the middle part of the week that may hurt or help boost bond prices, depending on how strong of a demand there is for the sales. Since all of the relevant data is scheduled for release Thursday and Friday, the most movement in rates will likely be the middle or latter part of the week.

Fed Chairman Bernanke will be speaking to the Economic Club of Washington D.C. at noon today. This is not considered to be an important speech and likely will not influence mortgage rates. However, whenever he speaks publicly, the possibility does exist that his words could rattle or rally the markets. I am not concerned about this one and don’t feel there should be much attention placed on it.

There is no relevant economic news scheduled for release today, tomorrow or Wednesday. October’s Goods and Services Trade Balance report will be posted early Thursday morning. This report gives the size of the U.S. trade deficit, but it is the week’s least important release. It is expected to show a $37.0 billion trade deficit. Unless it varies greatly from forecasts, I don’t expect it to affect mortgage pricing.

Overall, expect to see a pretty volatile second half of the week with the biggest moves in mortgage pricing likely to come Wednesday or Friday. Friday’s Retail Sales report can cause a great deal of movement in rates, but Wednesday’s Treasury auction may also help determine if rates will close the week higher or lower than tomorrow’s opening levels. It will also be interesting to see if bonds extend Friday’s selling into tomorrow’s trading or if they recover some of those losses. This looks to be one of those weeks that maintaining contact with your mortgage professional would be wise.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12-4-2009

2009-12-04T10:08:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened down sharply due to the results of this morning’s Employment report. The stock markets are rallying around the news, pushing the Dow higher by 130 points while the Nasdaq has gained 37 points. The bond market is currently down 34/32, which should translate into an increase in this morning’s mortgage rates of approximately .625 of a discount point. This equates to approximately .125 of a percent in rate.

The Labor Department gave us today’s news that was so bad for bonds. They reported that the U.S. unemployment rate fell to 10.0% last month when it was expected to remain at 10.2%. They also announced that only 11,000 jobs were lost last month, falling well short of the 125,000 loss that was forecasted. In addition, today’s report also revised October’s job loss lower by 79,000 jobs. These were big numbers for the markets and indicate that the employment sector was not nearly as weak as many had thought. That is bad news for the bond market and mortgage rates because a strengthening labor market means a broader economic recovery is more likely.

In a small bit of good news, the report showed that average hourly earnings rose only 0.1% last month when it was expected to show a 0.2% increase. This means that earnings paid to workers did not rise as much as thought, which is good news for bonds because it eases wage-inflation concerns. However, this is the least important of the three major readings in the data and had little impact on this morning’s bond selling.

Also posted this morning was October’s Factory Orders report. It also revealed a stronger than expected reading for October and revised September’s orders much higher than previously announced. The 0.6% increase was well above forecasts for October, indicating that the manufacturing sector may be gaining steam. While this data can be considered negative for bonds and mortgage pricing, it is not nearly important as the monthly Employment report and has had little influence on this morning’s mortgage rates.

Next week is fairly light in terms of the number of economic reports scheduled for release, especially the first part of the week. There is no relevant economic data scheduled to be posted Monday and the latter part of the week brings us the only important economic news. But we do have a couple of key Treasury auctions to watch the middle days. Look for more details on next week’s data and events in Sunday evening’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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/3/09

2009-12-03T08:15:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened in negative territory following the release of unfavorable economic news. The stock markets are mixed again with the Dow down 25 points and the Nasdaq up 3 points. The bond market is currently down 13/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point over yesterday’s morning rates.

The 3rd Quarter Productivity revision gave us a lower level of productivity than previously thought and fell short of forecasts. The 8.1% annual rate of worker productivity growth can be considered negative new for bonds because the preliminary estimate stood at 9.5% and forecasts for today’s revision were 8.5%. That is still a healthy rate of productivity, but the fact that it fell short of expectations means it is bad news for bonds.

The Labor Department also gave us news that was not so good for bonds and mortgage rates. They reported that 457,000 new claims for unemployment benefits were filed last week. This was a lower total than the 480,000 that was expected and their lowest total since September of last year, meaning the employment situation may be stronger than thought. However, this data usually does not carry too much weight because it tracks only a single week’s worth of new claims. Tomorrow’s monthly report is a different story though.

Also worth noting is today’s Senate confirmation hearing for Fed Chairman Bernanke. I don’t think anything said during today’s hearing will significantly affect the markets or mortgage rate. He has stated that the economy is coming out of the recession but that there is still more work to be done. Despite some early barbs in the hearing, there is little doubt that he will be confirmed for another term four-year term.

We will here again from the Labor Department tomorrow morning when they post November’s Employment report. This is arguably the most important monthly report we see. It is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate of 10.2%, payrolls down approximately 125,000 and an increase of 0.2% in average earnings. An ideal scenario for mortgage shoppers would be a higher unemployment rate than 10.2%, a larger decline in jobs and no change in the earnings reading.

Also scheduled for release tomorrow is the October’s Factory Orders report. This data is similar to last week’s Durable Goods Orders release by giving us a measurement of manufacturing sector strength, except this one includes orders for both durable and non-durable goods. This data usually isn’t a major influence on bond trading, but there is little chance of it impacting mortgage rates this tomorrow because the Employment report is an extremely important report. Analysts are expecting to see little change in new orders from September to October.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/2

2009-12-02T11:03:00.001-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened flat with no relevant economic news scheduled for release this morning. The stock markets aren’t influencing bond trading either with the major indexes mixed. The Dow is currently down 10 points and the Nasdaq up 15 points. The bond market is nearly unchanged from yesterday’s close, but we will still likely see an increase in this morning’s mortgage rates of approximately .250 of a discount point due to weakness late yesterday.

Today’s only relevant report comes during afternoon trading. The Fed Beige Book will be released at 2:00 PM ET today. This report, which is simply named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any significant surprises.

Tomorrow morning brings us the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It is the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 8.6%, down from the previous estimate of 9.5%.

We also get weekly unemployment figures from the Labor Department tomorrow morning. They are expected to say that 480,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week, but unless the total varies greatly from this forecast I don’t believe it will have much of an impact on tomorrow’s mortgage rates.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 12/1

2009-12-01T08:50:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened in negative territory despite weaker than expected economic results from a very important report. Stock market gains are likely the cause of this morning’s bond weakness. Stocks are rallying with the Dow up 133 points and the Nasdaq up 30 points. The bond market is currently down 11/32, which should push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point.

Today’s big news came from the Institute for Supply Management (ISM) who posted their manufacturing index for November. They announced a reading of 53.6 that fell short of the 54.9 that was expected, meaning manufacturer sentiment was weaker than thought. This is supposed to be good news for bonds and mortgage rates because a weakening manufacturing sector makes a broader economic recovery less likely and eases inflation concerns that hurt bond prices. Unfortunately for mortgage shoppers, today’s data is not influencing trading as much as it usually does.

The Fed Beige Book will be released at 2:00 PM ET tomorrow and is the day’s only relevant data. This report, which is simply named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any significant surprises.

The next piece of data that we need to be concerned with comes Thursday morning with the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It is the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 8.6%, down from the previous estimate of 9.5%.

I still believe Friday is the day to watch out for. It brings us the almighty monthly Employment report. Its results can erase the entire week’s gains or losses in the hour of trading following its release. It appears that my concern about bonds meeting resistance at current levels was accurate. This will probably remain the case until we get a significant catalyst to break through these levels. Friday’s report certainly has the potential to do this, assuming that the data is favorable to bonds. Until then, it is prudent to remain cautious towards rates.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/30/09

2009-11-30T07:26:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened in negative territory, unable to extend Friday’s rally. The stock markets are relatively calm with the Dow up a few points and the Nasdaq down a few points. The bond market is currently down 8/32, which may minimize the expected improvements in this morning’s mortgage rates. However, I am still expecting to see a small improvement in this morning’s mortgage rates compared to Wednesday’s pricing.

There are five pieces of economic news that may affect mortgage rates this week, with data scheduled for release each day except today. The fact that the bond market was unable to follow-thru on Friday’s rally concerns me that we may have some resistance in breaking current levels in the bond market. That shifts the risk versus reward calculations for locking or floating a rate, at least short-term. This doesn’t necessarily mean that I feel rates will move higher in the immediate future. It simply means that the risk of floating a rate outweighs the potential gain of doing so. With little possible reward, why take the risk?

The Institute for Supply Management (ISM) will post their manufacturing index for November late tomorrow morning. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a decline in sentiment from October to November. October’s reading was previously announced as 55.7. A weaker reading than the expected 54.8 would be good news for the bond market and mortgage rates. A reading below 50 means that more surveyed trade executives felt business worsened during the month than those who felt it had improved. The lower the reading the better the news for bonds because waning sentiment indicates a slowing manufacturing sector and makes a broader economic recovery less likely.

Overall, the most important day this week is Friday with monthly employment figures being released, but we may also see sizable movement in rates tomorrow. If Friday’s Employment report reveals stronger than expected results we may see rates spike higher that morning, possibly erasing any gains during the week. It will probably be the key to rates moving lower or higher for the week. I suspect it will be a fairly active week for the markets and mortgage pricing, so it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary the week ahead

2009-11-30T04:33:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

There are five pieces of economic news that may affect mortgage rates this week. There are relevant reports scheduled for release every day except for tomorrow, meaning it likely will be a fairly active week for mortgage rates. Even though there is no relevant data being posted tomorrow, we will still likely see a change in mortgage rates due to Friday’s market movements that came as a result of news from overseas-particularly Dubai. Many lenders were closed or on a skeleton staff Friday, so we should see those improvements reflected in tomorrow’s rates.

November’s manufacturing index from the Institute for Supply Management (ISM) will kick off the week’s data at 10:00 AM ET Tuesday. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a decline in sentiment from October to November. October’s reading was previously announced as 55.7. A weaker reading than the expected 54.8 would be good news for the bond market and mortgage rates. A reading below 50 means that more surveyed trade executives felt business worsened during the month than those who felt it had improved. The lower the reading the better the news for bonds because waning sentiment indicates a slowing manufacturing sector and makes a broader economic recovery less likely.

Wednesday’s only relevant data is the Fed Beige Book release at 2:00 PM ET. This report, which is simply named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any significant surprises.

The next piece of data that we need to be concerned with comes Thursday morning with the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It is the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 8.6%, down from the previous estimate of 9.5%.

The Labor Department will post November’s Employment report early Friday morning. This is arguably the most important monthly report we see. It is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate of 10.2%, payrolls down approximately 114,000 and an increase of 0.2% in average earnings. An ideal scenario for mortgage shoppers would be a higher unemployment rate than 10.2%, a larger decline in jobs and no change in the earnings reading.

Also scheduled for release Friday is October’s Factory Orders. This report is similar to last week’s Durable Goods Orders release by giving us a measurement of manufacturing sector strength, except this one includes orders for both durable and non-durable goods. This data usually isn’t a major influence on bond trading, but there is little chance of it impacting mortgage rates this Friday because the Employment report is an extremely important report. Analysts are expecting to see a slight increase in new orders of approximately 0.1%.

Overall, the most important day of the week is Friday with the employment figures being released, but we may also see sizable movement in rates Tuesday. Friday’s data could cause a significant change in rates. If it reveals stronger than expected results we may see rates spike higher Friday morning, possibly erasing any gains from the week. It will probably be the key to rates moving lower or higher for the week. But we do have approximately .125 - .250 of a discount point improvement waiting for us in tomorrow morning’s rates, unless something unexpected happens during early trading tomorrow. However, I suspect it will be a fairly active week for the markets and mortgage pricing, so it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

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 over 60 days from now...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/27/09

2009-11-27T09:44:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened in positive territory due significant selling on stocks during early trading. The stock markets are posting sizable losses with the Dow down 152 points and the Nasdaq down 35 points. The bond market is currently up 11/32, but I am expecting to see little change in mortgage rates since many lenders are closed or will reflect today’s news in Monday’s pricing.

Despite the current losses in stocks, the Dow and Nasdaq are both well off earlier lows. The Dow had fallen as much as 233 points while the Nasdaq was down by as much as 62 points. This morning’s weakness in stocks came from overseas news that Dubai may not be able to pay debt payments that are coming due. This has rattled several international markets as it brought back fears about economic stability.

The selling in stocks has helped boost bond prices this morning as investors seek safe-haven from the volatility. But this may be just a knee-jerk reaction and short-lived as we have already seen the major stock indexes recover a good portion of earlier losses. Therefore, I would not consider this to be a breakthrough morning for bonds or mortgage rates. With many traders at home for the holiday weekend, the early reaction to the news may be more a result of thin trading than the significance that the news will actually have on our economy and markets. In other words, lets wait until Monday’s full day of trading to see just how much of an impact this will have on our markets and mortgage pricing.

Wednesday’s 7-year Note auction went pretty well, meaning there still is an appetite for U.S. debt. This is needed if we want mortgage rates to fall below current levels. The 10-year Note sale, which is a better indication of investor interest in longer-term securities such as mortgage-related bonds, will be held the week after next. That sale will give us an important measurement of appetite for mortgage-related debt that could push mortgage rates noticeably lower than current levels.

The stock markets will close at 1:00 PM ET today while the bond market will close at 2:00 PM. With many lenders closed today or on a skeleton staff, I don’t think we will see much change in mortgage rates despite today’s market volatility. However, we can expect a downward change in Monday’s morning pricing if the markets hold current levels.

Next brings us the release of several important economic reports. There is relevant data being posted each day except Monday. Some of the key reports are the ISM Manufacturing index and November’s Employment report. Look for more details on next week’s event 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... 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...
©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate commentary 11-25-09

2009-11-25T10:34:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened has opened in negative territory following the release of stronger than expected economic data. The stock markets are showing minor gains with the Dow up 22 points and the Nasdaq up 6 points. The bond market is currently down 8/32, but we still should see an improvement of approximately .250 of a discount point in this morning’s mortgage rates due to strength in bonds late yesterday.

The first of today’s four relevant reports was October’s Durable Goods Orders that showed a 0.6% decline in new orders for big-ticket items. This was much lower than the 0.5% that was expected, but this particular report is known to show quite a bit of volatility from month-to-month. So a wide variance does not necessarily mean a big change to mortgage rates, but this morning’s news can be considered favorable for bonds and mortgage pricing.

The second report of the day was October’s Personal Income and Outlays data. It revealed a 0.2% rise in income that was expected, but a 0.7% increase in spending that exceeded forecasts. That means consumers spent more than many had thought, increasing the possibility of economic growth. This is bad news for bonds and mortgage rates because an expanding economy usually raises inflation concerns and makes mortgage-related bonds less attractive to investors.

The revised November reading to the University of Michigan Index of Consumer Sentiment came in at 67.4. This was slightly higher than expected, meaning consumers felt better about their own financial situations than many had thought. That can be considered bad news for bonds, however, this was not enough of a variance to affect mortgage rates.

The final report of the day was October’s New Home Sales. It showed that sales of newly constructed homes rose 6.2% last month, greatly exceeding forecasts. As with Monday’s Existing Home Sales report, this data indicates that the housing sector is strengthening at a quicker pace than many had thought. That is bad news for bonds and mortgage rates because a recovering housing sector makes a broader economic recovery more likely.

Also worth noting was a surprise drop in new claims for unemployment benefits filed last week. The Labor Department said that 466,000 new claims were filed last week, falling well below forecasts and their lowest total since September of last year. Fortunately this data is not considered to be highly important, but its results did somewhat influence the stock markets and bond trading this morning.

Yesterday’s 5-year Note auction went very well, raising optimism about today’s 7-year Note sale. As with yesterday’s auction, results will be posted at 1:00 PM ET. If there was a strong demand from investors, we could see bond prices rise again during afternoon hours, possibly leading to improvements in mortgage rates. But a lackluster interest in the sale could lead to higher mortgage pricing.

The FOMC minutes that were released yesterday afternoon didn’t really give us any surprising news, but did appear to be more optimistic about the economy than during previous meetings. The Fed raised their estimates for next year for overall economic activity (GDP reading) and lowered predictions for the unemployment rate. This means that they think economic activity will be better than previously thought and that unemployment will not be as bad as previously estimated. Those can be considered negative points for bonds and mortgage rates, but the strength of the 5-year Note auction yesterday prevented bonds from reacting negatively.

The financial markets will be closed tomorrow in observance of the Thanksgiving Day holiday. There will not be an early close today, but they will close early Friday afternoon and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home and there is no relevant economic news scheduled for release. Banks have to be open Friday, but we will likely see little change to mortgage rates that day.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/24/2009

2009-11-24T08:09:00.001-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened fairly flat after this morning’s economic data gave us mixed results. The stock markets are giving back some of yesterday’s gains with the Dow down 36 points and the Nasdaq down 12 points. The bond market is currently up 2/32, but we will likely see an improvement in this morning’s mortgage rates of approximately .250 of a discount point due to strength in bonds late yesterday.

This morning’s release of the 3rd Quarter Gross Domestic Product (GDP) revision revealed a downward revision, as expected. It revealed a 2.8% annual rate of growth during the third quarter that nearly matched forecasts. This means that the economy did not grow as much during the 3rd quarter than previously thought. That is good news for bonds and mortgage rates, but since the 2.8% increase was nearly what analysts had predicted, the impact on this morning’s trading and mortgage pricing has been minimal.

November’s Consumer Confidence Index (CCI) was posted late this morning, showing a reading of 49.5. This was higher than forecasts were calling for, indicating that consumers were more optimistic about their own financial situations than many had thought. That is considered negative news for bonds because rising confidence means consumers are more apt to make large purchases in the near future, effectively fueling economic growth.

We have two more events to watch for later today. The first are the results of the 5-year Note auction being held today. They will be posted at 1:00 PM ET. If there was a strong demand from investors, we could see bond prices rise and mortgage rates fall this afternoon. But a lackluster interest in the sale could lead to higher mortgage pricing.

The FOMC minutes may be a major mover of the markets or a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures and overly optimistic about economic growth, we may see the bond market move lower and mortgage rates higher after they are released at 2:00 PM ET.

There are four reports scheduled for release tomorrow morning. October’s Durable Goods Orders is the first and will be posted early morning. This data helps us measure manufacturing strength by tracking orders for big-ticket items, but is known to be quite volatile from month-to-month. It is expected to show a 0.5% increase in new orders. A smaller than expected rise would be considered good news for the bond market and mortgage rates.

The second is October’s Personal Income and Outlays data. This data is thought to measure consumers’ ability to spend and their current spending habits. This is important because consumer spending makes up two-thirds of the U.S. economy. It is expected to show that income rose 0.2% and that spending increases 0.5%. Smaller than expected readings would be good news for bonds and could lead to improvements in mortgage rates.

The revised November reading to the University of Michigan Index of Consumer Sentiment will be posted late tomorrow morning. Analysts are expecting to see an upward revision of 1.0 to the preliminary reading of 66.0. Unless we see a significant variance from the forecasted reading of 67.0, I don’t think this data will cause much movement in mortgage rates tomorrow.

October’s New Home Sales is the last report, but it is the least important. I don’t think this data will influence mortgage rates unless it varies greatly from forecasts and the rest of the day’s news matches forecasts. It is expected to show a slight increase in sales of newly constructed homes.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/23/2009

2009-11-23T08:54:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened in negative territory following stronger than expected economic data and a sizable rally in stocks. The stock markets are starting the week with strong gains with the Dow up 149 points and the Nasdaq up 36 points. The bond market is currently down 5/32, but I am not expecting to see much change in this morning’s mortgage rates.

The National Association of Realtors reported late this morning that sales of existing homes rose over 10% last month, greatly exceeding analysts’ forecasts. This fuels the theory that the housing sector is strengthening, which is thought by many to be needed for a broader economic recovery. Therefore, this data can be considered bad news for bonds and mortgage rates, but this was one of the week’s least important reports so its impact on rates has been minimal.

Tomorrow morning brings us the first revision to the 3rd Quarter Gross Domestic Product (GDP). The GDP revision is expected to show a downward revision from last month’s preliminary reading of a 3.5% annual rate of expansion. Current forecasts call for a reading of approximately 2.9%, meaning that there was less economic growth during the third quarter than previously thought. This would be good news for the bond market and mortgage rates, but it will likely take a smaller than expected reading for this report to improve mortgage rates.

November’s Consumer Confidence Index (CCI) will also be released tomorrow morning, but during late morning trading. It gives us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This raises inflation concerns and usually pushes mortgage rates higher. Analysts are expecting to see little change from last month’s 47.7 reading, meaning consumer were just as concerned about their own financial situations as they were last month. A weaker than expected reading should be good news for mortgage rates, but a stronger than expected reading could push mortgage rates higher tomorrow.

Also worth noting about tomorrow is the release of the minutes from the last FOMC meeting and the 5-year Treasury Note auction. Both are afternoon events and both have the potential to heavily influence the bond market or be a non-factor. The results of auction will be posted at 1:00 PM ET. If there was a strong demand from investors, we could see bond prices rise and mortgage rates fall during afternoon hours. But a lackluster interest in the sale could lead to higher mortgage pricing.

The FOMC minutes may be a major mover of the markets or a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures and overly optimistic about economic growth, we may see the bond market move lower and mortgage rates higher tomorrow afternoon. However, if they indicate a likelihood of another rate cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.

Overall, I believe that it is going to be an active week for the mortgage market, particularly the first half. Friday will be the least important day of the week and either tomorrow or Wednesday will be the most important. I expect to see plenty of movement in rates the first couple of days, possibly afternoon revisions also, so please be careful and maintain contact with your mortgage professional if you have not locked an interest rate yet.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary- The week ahead

2009-11-23T05:16:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This holiday-shortened week brings us the release of seven relevant economic reports for the markets to digest. All of the week’s data is being posted over just three days, so the first part of the week should be interesting for mortgage shoppers.

October’s Existing Home Sales data will be posted late tomorrow morning. This report, along with Wednesday’s New Home Sales data are the least important reports of the week. They give us a measurement of housing sector strength and mortgage credit demand, but the bond market generally does not rely heavily on their results. They both are expected to show increases in sales, indicating that the housing sector may be strengthening.

The first important data comes early Tuesday morning when the first revision to the 3rd Quarter Gross Domestic Product (GDP) will be posted. The GDP revision is expected to show a downward revision from last month’s preliminary reading of a 3.5% annual rate of expansion. Current forecasts call for a reading of approximately 2.9%, meaning that there was less economic growth during the third quarter than previously thought. This would be good news for the bond market and mortgage rates, but it will likely take a smaller than expected reading for this report to improve mortgage rates.

November’s Consumer Confidence Index (CCI) will be released by the Conference Board late Tuesday morning. It gives us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This raises inflation concerns and usually pushes mortgage rates higher. Analysts are expecting to see little change from last month’s 47.7 reading, meaning consumer were just as concerned about their own financial situations as they were last month. A weaker than expected reading should be good news for mortgage rates, but a stronger than expected reading could push mortgage rates higher Tuesday.

There are four reports scheduled to be posted Wednesday morning. October’s Durable Goods Orders is the first and will be posted early morning. This data helps us measure manufacturing strength by tracking orders for big-ticket items, but is known to be quite volatile from month-to-month. It is expected to show a 0.5% increase in new orders. A smaller than expected rise would be considered good news for the bond market and mortgage rates.

The second is October’s Personal Income and Outlays data. This data is thought to measure consumers’ ability to spend and their current spending habits. This is important because consumer spending makes up two-thirds of the U.S. economy. It is expected to show that income rose 0.2% and that spending increases 0.5%. Smaller than expected readings would be good news for bonds and could lead to improvements in mortgage rates.

The revised November reading to the University of Michigan Index of Consumer Sentiment will also be posted late Wednesday morning. Analysts are expecting to see an upward revision to the preliminary reading of 66.0. Unless we see a significant variance from the forecasted reading, I don’t think this data will cause much movement in mortgage rates Wednesday.

October’s New Home Sales is the last report, but it is the least important. I don’t think this data will influence mortgage rates unless it varies greatly from forecasts and the rest of the day’s news matches forecasts.

The financial markets will be closed Thursday in observance of the Thanksgiving Day holiday. There will not be an early close Wednesday ahead of the holiday, but they will close early Friday and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home. Banks have to be open Friday, but we will likely see little change to mortgage rates that day.

Overall, I believe that it is going to be an active week for the mortgage market, particularly the first half. Friday will be the least important day of the week and either Tuesday or Wednesday will be the most important. I expect to see plenty of movement in rates the first couple of days, so please be careful and maintain contact with your mortgage professional if you have not locked an interest rate yet.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

massachusetts Mortgage rate Commentary 11/20/09

2009-11-20T09:46:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market opened flat with no relevant economic news being posted today. The stock markets are showing losses with the Dow down 40 points and the Nasdaq down 14 points. The bond market is currently down 2/32, which should keep this morning’s mortgage rates at yesterday’s levels.

The stock markets appear prepared to close the week in negative ground. This should be good news for bonds heading into next week. Since there is no relevant data scheduled for release today, any changes to mortgage rates this afternoon will likely come from sizable move in stocks. If the major stock indexes continuer to move lower, there is a possibility of seeing downward revisions to mortgage rates this afternoon.

There are a couple of important reports scheduled for release next week. There is relevant data being posted Monday when the National Association of Realtors gives us October’s home resale figures. It is expected to show an increase in sales from September’s level, meaning the housing sector improved over the past month. However, this data is not considered to be highly important, so it will likely take a sizable variance from forecasts to cause a noticeable move in mortgage rates.

Next week is a holiday-shortened week due to Thanksgiving Day, meaning all of the week’s data will likely be released the first three days of the 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... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/19/2009

2009-11-19T12:47:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market opened in positive territory following early stock losses that have made bonds more attractive to investors. The stock markets are showing sizable losses with the Dow down 145 points and the Nasdaq down 44 points. The bond market is currently up 10/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point.

The Conference Board posted their Leading Economic Indicators (LEI) late this morning, announcing a 0.3% increase. This was a little weaker than the 0.4% that was expected, but not enough of difference to influence this morning mortgage rates. That data indicates that economic activity is expected to increase moderately over the next three to six months. That is acceptable to bonds, as many economists and the Fed expect the economy to expand slowly.

The Labor Department said this morning that 505,000 new claims for unemployment benefits were filed last week. This was very close to forecasts and also has had little impact on this morning’s bond trading and mortgage pricing.

There is no relevant economic news scheduled for release tomorrow. Therefore, look for the stock markets to again influence bond trading and possibly mortgage rates. If stocks fall further, bonds should rise, leading top downward revisions to mortgage rates 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... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/17

2009-11-17T10:32:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market opened in negative territory despite some extremely favorable economic news. The stock markets are showing relatively minor losses with the Dow down 18 points and the Nasdaq down 8 points. The bond market is currently down 3/32, which will likely keep this morning’s mortgage rates close to yesterday’s levels.

The Labor Department gave us the first and more important of today’s two relevant economic reports. They announced that the Producer Price Index (PPI) rose 0.3% last month, falling short of expectations. However, the big news was the core data reading that fell 0.6% when it was expected to rise 0.1%. This means that inflationary pressures at the producer level of the economy were well below what analysts had thought. That is very good news for bonds and mortgage rates, but it appears that the bond market was not too impressed with this morning’s news.

The second report of the morning was October's Industrial Production data. It showed that output at U.S. factories, mines and utilities rose only 0.1% when it was expected to rise 0.4%. This is also good news for bonds because rapid increases in manufacturing activity indicates a strengthening economy.

There are again two reports scheduled for release tomorrow. October's Consumer Price Index (CPI) will be released at 8:30 AM ET tomorrow. This index is similar to today's PPI, except it measures inflationary pressures at the more important consumer level of the economy. The overall reading is expected to show an increase of 0.2% while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while larger than forecasted increases could lead to higher mortgage rates tomorrow.

Tomorrow’s second report is October’s Housing Starts. This data gives us an indication of housing sector strength, but usually does not have a noticeable impact on mortgage rates. I don’t expect this month’s version to be any different unless it varies greatly from analysts’ forecasts and the CPI matches expectations. It is expected to show a small increase in starts of new homes.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/16/2009

2009-11-16T08:03:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market opened in positive territory despite early stock gains and mixed economic news. The stock markets are kicking the week off in positive ground with the Dow up 119 points and the Nasdaq up 27 points. The bond market is currently up 5/32, which with Friday’s late gains should improve this morning’s mortgage rates by approximately .250 of a discount point.

The Commerce Department reported this morning that October’s Retail Sales rose 1.4%, exceeding forecasts of a 0.9% increase. At first look, this headline number is bad news for bonds. However, two factors prevented the bond market from selling. The first was a sizable downward revision to September’s sales that indicated consumers were spending even less than previously thought. Last month’s estimate was a decline of 1.5% in sales, but it now believed that sales fell 2.3% that month. The second piece of positive news was the reading that excludes October’s more volatile auto sales. With those transactions excluded, sales rose only 0.2%, which was weaker than the 0.4% that was expected. So, today’s report can’t really be considered favorable or negative for bonds and mortgage rates. Its impact has been fairly neutral.

Fed Chairman Bernanke is making a lunchtime speech to the Economic Club of New York today. I don’t believe that we will see too much reaction to his speech, but the possibility always exists whenever he speaks. Therefore, we should not ignore it, but if we see the markets move noticeably between noon and 12:30 PM ET, it likely is a result of something he said.

There are two reports scheduled to be posted tomorrow morning. The first is October's Producer Price Index (PPI) that is one of the two key inflation readings this week. The PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If it reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and should drive mortgage rates higher. If we see in-line or weaker than expected numbers, mortgage rates should fall tomorrow. Current forecasts are calling for an increase of 0.5% in the overall reading and a 0.1% increase in the core reading.

Tomorrow’s second report is October's Industrial Production data. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.4% increase in production. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this data is not as important as the PPI readings are.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary- the week ahead

2009-11-16T05:31:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of six monthly economic reports for the markets to digest. With very important data scheduled for release three different days and relevant data four of the five days, we will likely see a fair amount of volatility in the markets and mortgage pricing this week.

The first data is one of the most important reports of the week. The Commerce Department will give us October’s Retail Sales figures early tomorrow morning. This data measures consumer spending, which is considered extremely important because it makes up two-thirds of the U.S. economy. It is expected to show a 0.9% rise in spending, meaning consumers spent much more last month than they did in September. This would be considered negative news for bonds because large increases in spending fuels an economic recovery and raises inflation concerns in the marketplace. If tomorrow’s report reveals a smaller than expected increase in spending, bonds should react favorably, pushing mortgage rates lower. If it shows a larger than expected increase, mortgage rates will likely move higher tomorrow.

There are two reports scheduled to be posted Tuesday. The first is October's Producer Price Index (PPI) that is one of the two key inflation readings on tap this week. The PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If it reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and should drive mortgage rates higher. If we see in-line or weaker than expected numbers, mortgage rates should fall Tuesday. Current forecasts are calling for an increase of 0.5% in the overall reading and a 0.1% increase in the core reading.

Tuesday’s second report is October's Industrial Production data. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.4% increase in production. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this data is not as important as the PPI readings are.

October's Consumer Price Index (CPI) will be released at 8:30 AM ET Wednesday morning. This index is similar to Tuesday's PPI, except it measures inflationary pressures at the more important consumer level of the economy. The overall reading is expected to show an increase of 0.2% while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while larger than forecasted increases could lead to higher mortgage rates Wednesday.

Wednesday’s second report is October’s Housing Starts. This data gives us an indication of housing sector strength, but usually does not have a noticeable impact on mortgage rates. I don’t expect this month’s version to be any different unless it varies greatly from analysts’ forecasts and the CPI matches expectations. It is expected to show a small increase in starts of new homes.

The Conference Board will release its Leading Economic Indicators (LEI) late Thursday morning. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.4% increase, meaning economic activity will rise over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to vary greatly from forecasts for it to affect mortgage rates.

Overall, look for any of the first three days of the week to be the most important with very important reports scheduled each day. The quietest day will most likely be Friday since there is no relevant data scheduled for release that day. Fed Chairman Bernanke is making a lunchtime speech tomorrow, but I don’t think it will cause much movement in rates. The key releases will be tomorrow’s Retail Sales and Wednesday’s CPI reports. They will probably determine whether rates close the week higher or lower than tomorrow’s opening levels. Since this is likely to be a fairly active week for mortgage rates, it would be prudent to maintain regular contact with your mortgage professional if still floating an interest rate.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/13/09

2009-11-13T08:16:00.001-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened flat following favorable consumer confidence news but early stock gains. The stock markets are looking to close the week in an upward move with the Dow up 78 points and the Nasdaq up 12 points. The bond market is nearly unchanged, but we should see an improvement in this morning’s mortgage rates of approximately .250 of a discount point due to strength late yesterday.

September’s Goods and Services Trade Balance report was posted this morning, giving us the size of the U.S. trade deficit. It revealed a deficit of $36.5 billion that exceeded forecasts by a wide margin. Fortunately for mortgage rates this data is not considered to be highly important to the markets.

The second report of the day was the University of Michigan’s Index of Consumer Sentiment for November. It came in with a reading of 66.0, falling well short of analysts’ expectations. This was good news for bonds because it indicated that consumers were much less optimistic about their own financial situations than many had thought. That means they are less likely to make large purchases in the near future, limiting fuel for economic growth.

Yesterday’s 30-year Treasury Bond auction drew a lackluster interest from investors. Many of the readings used to measure investor demand fell short of recent sales. This means that investors are leery of purchasing long-term debt from the U.S., but mortgage-related bonds faired well despite the news. This led to many lenders revising rates lower late yesterday or this morning.

Next week is much more active in terms of economic releases than this week was. We do have important data being posted Monday morning when the Commerce Department will release October’s Retail Sales data. This is a very important release because it gives us a measurement of consumer spending. Since consumer level spending makes up two-thirds of the U.S. economy, any related news is watched closely.

The rest of the week gives us additional important reports such as the two key inflation indexes. Look for more details on those and the rest of 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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/12/09

2009-11-12T09:08:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened fairly flat despite stock weakness. The stock markets are showing losses with the Dow down 52 points and the Nasdaq down 7 points. The bond market is nearly unchanged from Tuesday’s close, so we will likely see little change in this morning’s mortgage rates.

The Labor Department gave us last week’s unemployment figures this morning. They reported that 502,000 new claims for unemployment benefits were filed last week, falling short of expectations. That is theoretically bad news for bonds, but since this data gives us only a week’s worth of new claims its impact on mortgage rates is usually minimal. Accordingly, it has not influenced today’s mortgage pricing.

We also have the 30-year Treasury Bond auction to watch today. It is considered to be less important to mortgage rates than Tuesday’s 10-year sale was, but does have the potential to affect mortgage rates. Bond traders will be looking for a strong demand from investors, particularly international buyers. If there is an overwhelmingly strong interest in the sale, bonds may rally after the results are posted at 1:00 PM ET tomorrow. But a weak sale could lead to bond selling and higher mortgage rates later this afternoon.

The first monthly data of the week is tomorrow’s release of September’s Goods and Services Trade Balance report. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates. It is expected to show a $31.8 billion trade deficit.

Tomorrow’s second report is November's preliminary reading of the University of Michigan’s Index of Consumer Sentiment. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 71.0, up slightly from October’s final reading of 70.6. That would be considered negative news for bonds because rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/10/09

2009-11-10T08:37:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened in positive territory despite early gains in stocks. The stock markets are extending yesterday’s rally, but by a much less margin. The Dow is currently up 27 points while the Nasdaq has gained 4 points. The bond market is currently up 9/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point.

There is no relevant economic data scheduled to be posted today. However, we do have the 10-year Treasury Note sale to be concerned with. The markets will be gauging investor interest in this sale, particularly from international buyers. If the sale is met with a decent demand from investors, indicating a strong appetite for U.S. debt, we may see bond prices rise during afternoon trading. If this is the case, mortgage rates will likely revise lower. But, a weak interest in the auction could lead to higher mortgage pricing later today. Results of the sale will be posted at 1:00 PM ET.

I find it interesting that the bond market has had little reaction to the stock market rally. This could mean that bond traders are not impressed and not concerned about further increases. This bodes well for mortgage rates because if stock gains are not a concern, or better yet stocks pull back, we could see a sizable bond rally. There are some analysts who feel the stock rally is running out of steam. If this is true, we may by in store for a sizable rally in bonds and improvements to mortgage rates in the immediate future.

The bond market is closed tomorrow in observance of the Veterans Day holiday, however the stock markets will be open. There is no early close scheduled for today that precedes some holidays, so I don’t expect the holiday to affect today’s trading. Many lenders will also be closed tomorrow, but those that will be open will probably not issue new rates until Thursday morning.

The only factual economic data scheduled for release Thursday are weekly unemployment figures from the Labor Department. They are expected to show that 510,000 new claims for benefits were filed last week. This would be a slight change from the previous week’s total, but since this data tracks a only week’s worth of new claims it likely will not impact bond trading enough to affect mortgage rates. It will require a wide variance between forecasts and the actual number of new claims to see mortgage rates react to this data.

The week’s only two economic reports are scheduled to be posted Friday morning. Neither of them are considered to be highly important, so we should not expect a noticeable movement in mortgage rates due to their results. Since it is the week’s only monthly data, we may see movement in the markets after their results are posted, but I don’t believe it will be enough to lead to a significant change in rates.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/09

2009-11-09T10:18:00.001-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened up slightly despite early stock gains. The stock markets are rallying this morning, pushing the Dow to a one year high. It is currently showing a gain of 140 points while the Nasdaq is up 50 points. The bond market is currently up 3/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point.

There is no relevant economic data scheduled for release today. In fact, there is no relevant data scheduled until Friday morning. There are two important Treasury auctions this week that may influence mortgage rates more than the minor economic data that is scheduled. It is also a holiday-shortened week with the bond market closed Wednesday in observance of the Veterans Day holiday.

The stock markets will likely be a significant influence on bond trading and mortgage rates this week in addition to the two particular Treasury auctions. If the stock markets rally, we will probably see funds shift from bonds into stocks that potentially offer better returns. The Dow closed above 10,000 last week, but not by much. Therefore, if stocks fall from current levels early in the week, concerns about them being able to move much higher in the near future could lead to significant selling. That would make bonds more attractive to investors and lead to lower mortgage rates.

The two important Treasury auctions come tomorrow and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important one as it will give us an indication for demand of mortgage-related securities. They are usually sold on back-to-back days, but the Wednesday holiday pushes the first sale back to Tuesday. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates.

Overall, it is difficult to predict just how active this week will be for mortgage rates. As expected, last week brought us quite a bit of volatility in rates. This week could be very calm or could be just as active as last week was. I don’t believe the economic data on tap will be a catalyst. I think the key will be the stock markets and tomorrow’s Treasury auction. If they give us favorable results, mortgage rates will likely close the week lower than this morning’s opening levels.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary- The week ahead

2009-11-09T05:23:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of only two relevant economic reports but neither of them is considered to be highly important. There are two important Treasury auctions this week that may influence mortgage rates more than the minor economic data that is scheduled. It is also a holiday-shortened week with the bond market closed Wednesday in observance of the Veterans Day holiday.

Both of this week’s monthly economic reports will be posted Friday morning. This means that the stock markets will likely be a significant influence on bond trading and mortgage rates in addition to the two particular Treasury auctions. If the stock markets rally, we will probably see funds shift from bonds into stocks that potentially offer better returns. The Dow closed above 10,000 last week, but not by much. Therefore, if stocks fall from current levels early in the week, concerns about them being able to move much higher in the near future could lead to significant selling. That would make bonds more attractive to investors and lead to lower mortgage rates.

The two important Treasury auctions come Tuesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important one as it will give us an indication for demand of mortgage-related securities. They are usually sold on back-to-back days, but the Wednesday holiday pushes the first sale back to Tuesday. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates.

The first monthly data of the week is September’s Goods and Services Trade Balance report early Friday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

Friday’s second report is November's preliminary reading of the University of Michigan’s Index of Consumer Sentiment. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 71.4, up from October’s final reading of 70.6. That would be considered negative news for bonds because rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely.

Overall, it is difficult to predict just how active this week will be for mortgage rates. As expected, last week brought us quite a bit of volatility in rates. This week could be very calm or could be just as active as last week was. I don’t believe the economic data on tap will be a catalyst. I think the key will be the stock markets and Tuesday’s Treasury auction. If they give us favorable results, mortgage rates will likely close the week lower than tomorrow’s opening levels.

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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11-06-09

2009-11-06T10:08:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened in positive territory following the release of weaker than expected employment figures. The stock markets are reacting relatively well to the news with the Dow up 10 points and the Nasdaq up 8 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 reported this morning that the U.S. unemployment rate spiked to 10.2% last month, reaching its highest level since April 1983. Analysts were expecting to see it move slightly to 9.9%. The number of jobs lost during the month stood at 190,000, which exceeded forecasts also. However, offsetting that variance was a downward revision of 49,000 jobs lost during September.

Still, the double-digit unemployment rate has many traders questioning the ability of the economy to maintain its recent growth. The recent weakness in bonds had pushed the yield on the benchmark 10-year Note above its recent trading range. This morning’s news and buying gives hope that we may be able to crack that threshold and move lower. If we do, there is a fairly decent possibility of seeing further improvements to in the immediate future. This could mean lower mortgage rates over the next week or so.

Next week is very light in terms of economic reports. There are only a couple of relevant reports scheduled and they don’t come until the latter part of the week. This means that the stock markets will likely heavily influence trading and mortgage rates. If today’s data continues to affect the markets next week, we will probably see further improvements in mortgage rates as the week progresses. Accordingly, a less cautious approach towards interest rates may benefit mortgage shoppers at this time, but look for more details on next week’s related 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... 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...

©Mortgage Commentary 2009

Massachusetts mortgage applicants: Please note that this information reflects just one opinion on the current market and should be used for informational purposes only. Today’s mortgage market is very volatile and can change very quickly. www.JeffDrew.StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/05

2009-11-05T07:58:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened down slightly following another stock rally. The stock markets are showing strong gains with the Dow up 182 points and the Nasdaq up 42 points. The bond market is currently down 5/32, which will likely keep this morning’s mortgage rates near yesterday’s levels.

This morning’s release of the 3rd Quarter Productivity data gave us favorable results. It showed a spike in productivity of a 9.5% increase. This was much stronger than expected, but that is good news for bonds for this type of data. Strong levels of productivity allow the economy to grow without inflation strains. Since inflation is the number one nemesis of the bond market, any news that eases inflation concerns is considered positive for bonds and mortgage rates.

The Labor Department also gave us last week’s unemployment figures, reporting that 512,000 new claims for unemployment benefits were filed last week. This was lower than forecasts and can be considered negative for bonds, but fortunately this data is not important enough to heavily influence mortgage pricing.

October’s monthly employment figures will be released early tomorrow morning. This extremely important report is comprised of many statistics and readings, but the most watched ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for a 0.1% rise in unemployment to bring the national rate to 9.9%, a drop in payrolls of approximately 175,000 and a 0.1% increase in average earnings. Weaker than expected readings should rally bonds and lead to improvements in mortgage rates, while stronger than forecasted results would add fuel to the growing economy theory and likely lead to bond selling and higher mortgage rates 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... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Alert. Special Afternoon Post

2009-11-04T12:45:00.000-08:00

WEDNESDAY AFTERNOON UPDATE:
This week’s FOMC meeting has adjourned with no change to key short-term interest rates. This was widely expected, but we still have seen a negative reaction in bonds. The stock markets had a knee-jerk downward move after the post-meeting statement was released, but they have since recovered those losses. The Dow is currently up 110 points while the Nasdaq has gained 15 points. The bond market is currently down 16/32, which will likely cause an upward change to mortgage rates of approximately .125 - .250 of a discount point compared to this morning’s rates.

In the post-meeting statement, the Fed indicated that key short-term interest rates will remain near current levels for quite some time. That can be considered good news for bonds because it means the Fed is not too concerned about inflation. However, they also renewed previous comments that the economy is indeed growing. Even though there is cautious optimism about the economy being able to continue to expand, hearing the Fed further support the theory that the economy may be able to do so has hurt bond prices.

Also contributing to this afternoon’s bond selling was word that the Fed has lowered the amount of mortgage-related debt it is planning to purchase by $25 billion. The Fed is still expecting to make large purchases of those securities to help fuel mortgage lending and boost the housing sector. But the reduction from previous estimates has helped create a negative tone in the bond market this afternoon.

There was no important economic news posted this morning. Tomorrow’s data is relatively important to the bond market though. The 3rd Quarter Productivity reading is expected to show an increase in productivity at an annual rate of 6.5%. A larger increase would be good news for the bond market because higher levels of productivity allow the economy to expand without inflationary pressures being a concern.

The Labor Department will give us last week’s unemployment figures tomorrow morning also. They are expected to report that 522,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week, but unless we see a wide variance from expectations I don’t believe this data will have much of an impact on tomorrow’s mortgage rates. Especially with October’s monthly numbers coming Friday morning.

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...

Massachusetts Mortgage Rate Commentary 11/4/09

2009-11-04T07:34:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened in negative territory again as investors prepare for today’s FOMC news. Early stock gains are also contributing to this morning’s bond losses. The Dow is currently up 99 points while the Nasdaq has gained 14 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 compared to yesterday’s morning rates.

There is no important economic data being released today. The Institute for Supply Management (ISM) said their services index fell last month, meaning that sentiment in the service sector was weaker than thought. This can be considered good news for the bond market, but this index is far less important than the ISM manufacturing index posted Monday. Therefore, its impact on this morning’s trading and mortgage pricing has been minimal.

This afternoon brings us the adjournment of the two-day FOMC meeting. There is almost no possibility that the Fed raised key short-term interest rates during this monetary policy meeting. But market participants will be looking at the post-meeting statement for any indication of when the Fed may make a move. The meeting will adjourn at 2:15 PM ET, so look for any reaction to the statement to come during afternoon hours. Generally speaking, any hint of a rate increase coming relatively soon would be negative news for bonds and lead to higher mortgage rates.

Look for an update to this report shortly after the markets have an opportunity to react to the statement release.

Tomorrow’s data is relatively important to the bond market. This report is the 3rd Quarter Productivity reading. It is expected to show a level of worker productivity during the third quarter equivalent to last quarter’s final reading of 6.6%. Analysts have forecasted a 6.4% rise in worker output. A larger increase would be good news for the bond market because high levels of productivity allows the economy to expand without inflationary pressures being a concern.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 11/2/09

2009-11-02T09:38:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened in negative territory due to early stock strength and stronger than expected economic news. The stock markets are starting the week with sizable gains. The Dow is currently up 104 points while the Nasdaq is showing a 15 point gain. The bond market is currently down 6/32, but we will likely see little change to this morning’s mortgage rates due to strength late Friday.

Today’s only relevant economic data came from the Institute for Supply Management (ISM), who said that their manufacturing index stood at 55.7. This was higher than the 53.0 that was forecasted and its highest reading since April 2006. This indicates that manufacturer sentiment about business conditions improved more than thought, hinting at manufacturing sector strength. That is bad news for bonds and mortgage rates because a strengthening manufacturing sector makes broader economic growth more likely.

The rest of the week brings us three more relevant economic reports and another FOMC meeting. The next is tomorrow’s release of September’s Factory Orders report. This report is similar to last week’s Durable Goods Orders release except it includes orders for both durable and non-durable goods. It is expected to show 0.9% increase in new orders from August’s level. A smaller than forecasted increase would be good news for the bond market and mortgage rates while a larger than expected rise is bad news and should push rates higher tomorrow.

There is no important data scheduled for release Wednesday. However, this week’s FOMC meeting is a two-day meeting that begins Tuesday and adjourns Wednesday afternoon. There is almost no possibility of the Fed raising key short-term interest rates this week. But market participants will be looking at the post-meeting statement for any indication of when the Fed may make a move. The meeting will adjourn at 2:15 PM ET Wednesday, so look for any reaction to the statement to come during afternoon hours. Generally speaking, any hint of a rate increase coming relatively soon would be negative news for bonds and lead to higher mortgage rates.

Overall, the single most important day will likely be Friday but tomorrow’s FOMC meeting could significantly move the markets and mortgage also. I believe stocks will continue to experience volatility that will also impact bond trading. The key to the week will be Friday’s employment numbers, but any significant swings in the stock markets may also influence whether mortgage rates close the week higher or lower than this morning’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... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary week of November 1, 2009

2009-11-02T05:48:00.000-08:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of four relevant economic reports for the markets to digest with two of those reports being much more important than the other two. In addition to the factual reports, we also have another FOMC meeting to work around this week. This leads me to believe that we will see another active week for mortgage rates.

The first report comes late tomorrow morning when the Institute for Supply Management (ISM) will post their manufacturing index. The index measures manufacturer sentiment, which is important because it gives us an indication of manufacturing sector strength. It is considered to be one of the more important reports we see each month. Tomorrow’s release is expected to show a reading of 53.0, meaning that sentiment increased slightly from September’s level. A smaller than expected reading would be good news for bonds and likely lead to lower mortgage rates tomorrow.

Tuesday’s only relevant news is September’s Factory Orders report. This report is similar to last week’s Durable Goods Orders release except it includes orders for both durable and non-durable goods. It is expected to show 0.9% increase in new orders from August’s level. A smaller than forecasted increase would be good news for the bond market and mortgage rates while a larger than expected rise is bad news and should push rates higher.

There is no important data scheduled for release Wednesday. However, this week’s FOMC meeting is a two-day meeting that begins Tuesday and adjourns Wednesday afternoon. There is almost no possibility of the Fed raising key short-term interest rates this week. But market participants will be looking at the post-meeting statement for any indication of when the Fed may make a move. The meeting will adjourn at 2:15 PM ET Wednesday, so look for any reaction to the statement to come during afternoon hours. Generally speaking, any hint of a rate increase coming relatively soon would be negative news for bonds and lead to higher mortgage rates.

Thursday’s report is the 3rd Quarter Productivity reading. The productivity index is expected to show a level of worker productivity during the third quarter equivalent to last quarter’s final reading of 6.6%. Analysts have forecasted a 6.4% rise in worker output. A larger increase would be good news for the bond market because high levels of productivity allows the economy to expand without inflationary pressures being a concern.

The last report of the week is the most important. Friday brings us the release of one of the most important monthly reports- the Employment report. The Labor Department will post October’s employment stats early Friday morning. The report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for a 0.1% rise in unemployment to bring the national rate to 9.9%, a drop in payrolls of approximately 175,000 and a 0.1% increase in average earnings. Weaker than expected readings should rally bonds and lead to improvements in mortgage rates, especially if the stock markets react poorly to the news.

Overall, the single most important day is Friday but tomorrow’s data is also considered to be highly important. In addition to the economic reports and the FOMC meeting, I believe stocks will continue to experience volatility that will also impact bond trading. The key to the week will be Friday’s employment numbers, but any significant swings in the stock markets may also influence whether mortgage rates close the week higher or lower than tomorrow morning’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... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/30

2009-10-30T09:12:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened in positive territory after this morning’s economic data failed to show any significant surprises and the stock markets opened with losses. Stocks are starting the next leg of their recent roller coaster ride with sizable losses. The Dow has given back over half of yesterday’s rally with a loss of 109 points so far. The Nasdaq is not fairing much better with a 20 point loss. The bond market is currently up 11/32, but I don’t believe we will see much of a change in this morning’s mortgage rates compared to yesterday’s morning rates due to weakness in bonds late yesterday.

The first of today’s three reports was the 3rd Quarter Employment Cost Index (ECI). It showed an increase of 0.4% that matched forecasts. This means that employer costs for wages and benefits rose moderately during the third quarter, but this was expected. Therefore, its’ impact on today’s trading and mortgage rates has been minimal.

September’s Personal Income and Outlays report was the second, revealing no change in personal income last month and a 0.5% decline in spending. These figures pegged analysts’ expectations and also have not influenced today’s mortgage pricing.

The third and final report of the day was the University of Michigan’s update to their Index of Consumer Sentiment for October. They announced a reading of 70.6 that exceeded forecasts of a 70.0 reading. This means that consumers were a little more optimistic about their own financial situations than many had thought. That can be considered bad news for bonds but since this data is only moderately important, it fortunately has been unable to prevent bonds from rising this morning.

Yesterday’s 7-year Note auction was met with an average demand. It can’t be considered weak or strong. Some of the components that measure the success of the sales pointed towards less interest than Wednesday’s auction, but not by enough to cause much concern.

Next week is extremely busy in terms of economic reports being posted. Unlike many, we will see important data posted this Monday. The Institute for Supply Management (ISM) will post their manufacturing index late Monday morning. It is considered to be one of the more important reports we get each month, but it will not be the most important data next week. In addition the data, that includes the monthly employment figures, we also have another FOMC meeting to watch for. 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... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/29

2009-10-29T08:55:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened in negative territory after today’s important economic data gave us stronger than expected results. The stock markets are showing strength with the Dow up 86 points and the Nasdaq up 24 points. The bond market is currently down 15/32, but we will probably see little change in this morning’s mortgage rates due to strength in bonds late yesterday.

Today’s big news was the release of the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) that is considered to be the benchmark reading of economic activity. It showed a larger than expected jump of 3.5%, indicating that the economy grew at a faster pace than many had thought. This is bad news for bonds and mortgage rates since it raises concerns that the economic recovery may be sooner than later. Generally speaking, weak economic conditions make long-term securities such as mortgage-related bonds more attractive to investors. When the economy is expanding, inflation concerns make those securities less appealing and drive mortgage rates higher.

Yesterday’s 5-year Note auction went fairly well. This leads to optimism that today’s 7-year Note sale will also go well. If there is a strong demand in today’s auction, we may see bonds improve this afternoon. But if the sale does not draw a decent interest from investors, mortgage rates could move higher this afternoon. Results will be posted at 1:00 PM ET today, so any reaction to them will come during afternoon trading.

There are three reports scheduled for release tomorrow. The first is the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.4%. A smaller than expected increase would be good news for bonds and mortgage rates.

September’s Personal Income and Outlays report will also be posted early tomorrow morning. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns. Analysts are expecting to see no change in income and decline in outlays of 0.5%.

The week’s last report comes at 10:00 AM ET tomorrow when the University of Michigan updates their Index of Consumer Sentiment for this month. Current forecasts show this index rising slightly this month’s preliminary reading of 69.4. This index is moderately important because it helps us measure consumer confidence, which is believed to indicate consumers’ willingness to spend. Since consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be relevant.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/28

2009-10-28T08:51:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened in positive territory again after this morning’s only economic report showed no surprises. A negative open for stocks is also helping bonds during early trading. The Dow and Nasdaq are both showing losses of 28 points. The bond market is currently up 10/32, which should improve this morning’s mortgage rates by approximately .250 - of a discount point.

The Commerce Department released September’s Durable Goods Orders this morning, announcing an increase of 1.0% in new orders for big-ticket items. This matched forecasts and had little impact on this morning’s trading or mortgage pricing.

September’s New Home Sales report was also posted this morning, but its results did surprise many analysts. It was expected to show that sales of newly constructed homes rose last month, but actually revealed a decline in sales. It also revised August’s final sales figures lower, meaning that sales were weaker than thought over the past two months. This can be considered favorable news for the bond market and mortgage rates, but this data usually does not heavily influence trading or rates.

The 5-year Notes auction is being held today while tomorrow brings us the 7-year Note sales. If the sales go well, we may see afternoon strength in bonds that lead to downward revisions to mortgage rates. But lackluster interest in them will probably cause bonds to fall and mortgage rates to move higher. Results of the sales will be posted at 1:00 PM ET today and tomorrow.

The most important release of the week will be released early tomorrow morning. This is the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) and is arguable the single most important report the bond market sees regularly. The GDP is considered to be the benchmark measurement of economic growth because it is the sum of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart.

Tomorrow’s release is the first and usually has the biggest impact on the markets. Current forecasts call for an increase of approximately 3.2% in the GDP. If this report does show a much smaller increase, I am expecting to see the bond market rally and mortgage rates to fall. However, a larger than expected rise could lead to bond selling and a sizable increase in mortgage pricing 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... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/27/09

2009-10-27T09:35:00.001-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened in positive territory following the release of a much weaker than expected consumer confidence reading. The stock markets are mixed with the Dow up 57 points and the Nasdaq down 6 points. The bond market is currently up 14/32, which will likely improve this morning’s mortgage rates by approximately .250 - of a discount point.

The Conference Board said that their Consumer Confidence Index (CCI) for October fell to 47.7. This was much weaker than the 53.5 that was expected and indicates that consumers are less optimistic about their own financial situations than many had thought. That is favorable news for bonds and mortgage rates because it means that consumers are less likely to make large purchases in the near future, therefore, limiting economic growth.

The Commerce Department will post Durable Goods Orders for September early tomorrow morning. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. Analysts are currently calling for an increase in new orders of approximately 1.0%. If we see a larger than expected increase in orders, mortgage rates will probably rise as bond prices fall. A weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast.

Also tomorrow is the release of September’s New Home Sales. This data covers the remaining 15% of home sales that last week’s Existing Home Sales report tracked and is this week’s least important data. It is expected to show an increase in sales, but regardless of its results I am not expecting it to have a significant impact on mortgage rates.

Tomorrow also brings us the first of the two relevant Treasury auctions. 5-year Notes will be sold tomorrow, which will help us prepare for Thursday’s 7-year Note sale. If the sales go well, we may see afternoon strength in bonds that lead to downward revisions to mortgage rates. But lackluster interest in them will probably cause bonds to fall and mortgage rates to move higher. Results of the sales are posted at 1:00 PM ET each day.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/26/2009

2009-10-26T07:55:00.000-07:00

Monday’s bond market has opened well in negative ground following early stock gains. The stock markets are showing early strength with the Dow up 97 points and the Nasdaq up 27 points. This pushes the Dow above the important 10,000 benchmark level yet again, but its ability to hold that level has come up short during recent trading. It appears that until that level can hold, many analysts will remain skeptical of the recent stock rally. However, as stocks rise this morning, bonds are falling. The bond market is currently down 24/32, which will likely push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point over Friday’s morning rates.

There is no relevant economic data scheduled for release today. The rest of the week brings us the release of seven relevant economic reports and two important Treasury auctions for the bond market to digest. Contributing to this morning’s bond losses is the fact that there is $123 billion of Treasury debt being sold this week. That new supply of debt makes existing bonds and notes less attractive to investors. It is also common to see selling in bonds ahead of these auctions so market participants can prepare for the sales.

The first report of the week is one of the more important ones. October’s Consumer Confidence Index (CCI) will be posted late tomorrow morning. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a small increase in confidence from last month’s 53.1 reading, indicating that consumers are a little more likely to make large purchases in the near future than last month. As long as the reading doesn’t exceed the forecasted 53.5, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

Overall, it will likely be an active week for the markets and mortgage rates. I believe that the single most important day will probably end up being Thursday with the extremely important GDP release in the morning and the Treasury auction results during afternoon hours. However, tomorrow, Wednesday and Friday should also be active. Accordingly, I strongly recommend maintaining contact with your mortgage professional this week, especially if still floating an interest rate.

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...

Massachusetts Mortgage Rate Commentary week of 10/25

2009-10-26T05:38:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of seven relevant economic reports and two important Treasury auctions for the bond market to digest. There is relevant data or events scheduled every day except tomorrow, so there is a pretty good chance of seeing noticeable movement in mortgage rates several days this week.

The first report of the week is one of the more important ones. October’s Consumer Confidence Index (CCI) will be posted late Tuesday morning. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a small increase in confidence from last month’s 53.1 reading, indicating that consumers are a little more likely to make large purchases in the near future than last month. As long as the reading doesn’t exceed the forecasted 53.5, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

Wednesday morning the Commerce Department will post Durable Goods Orders for September. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. Analysts are currently calling for an increase in new orders of approximately 1.0%. If we see a larger than expected increase in orders, mortgage rates will probably rise as bond prices fall. A weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast.

Also Wednesday is the release of September’s New Home Sales. This data covers the remaining 15% of home sales that last week’s Existing Home Sales report tracked and is this week’s least important data. It is expected to show an increase in sales, but regardless of its results I am not expecting it to have a significant impact on mortgage rates Wednesday.

The next relevant data is the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP) early Thursday morning. The GDP is considered to be the benchmark measurement of economic growth because it is the sum of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Thursday’s release is the first and usually has the biggest impact on the markets. Current forecasts call for an increase of approximately 3.2% in the GDP. If this report does show a much smaller increase, I am expecting to see the bond market rally and mortgage rates to fall. However, a larger than expected rise could lead to bond selling and a sizable increase in mortgage pricing.

There are three reports scheduled for release Friday. The first is the 3rd Quarter Employment Cost Index (ECI), which tracks employer costs for salaries and benefits. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.5%. A smaller than expected increase would be good news for bonds and mortgage rates.

September’s Personal Income and Outlays report will also be posted early Friday. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see no change in income and decline in outlays of 0.5%.

The week’s last report comes at 10:00 AM ET Friday when the University of Michigan updates their Index of Consumer Sentiment for this month. Current forecasts show this index rising slightly this month’s preliminary reading of 69.4. This index is moderately important because it helps us measure consumer confidence, which is believed to indicate consumers’ willingness to spend. Since consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be relevant.

This week also has Treasury auctions scheduled each day except Friday. However, the two that are most likely to influence mortgage rates are Wednesday’s 5-year and Thursday’s 7-year Note sales. If those sales are met with a strong demand, particularly Thursday’s auction, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates.

Overall, it will likely be an active week for the markets and mortgage rates. I believe that the single most important day will probably end up being Thursday with the extremely important GDP release in the morning and the Treasury auction results during afternoon hours. Tomorrow will likely be the calmest day of the week, but Tuesday, Wednesday and Friday should also be active. Accordingly, I strongly recommend maintaining contact with your mortgage professional this week, especially if still floating an interest rate.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/23

2009-10-23T09:49:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened in negative territory again despite stock weakness during early trading. The stock markets are still unable to hold recent gains with the Dow down 90 points and again falling below the 10,000 benchmark. The Nasdaq is currently down 4 points. The bond market is down 13/32, which will likely push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point.

Today’s only relevant economic news came from the National Association of Realtors who reported that home resales rose to their highest level in over two years during September. This is bad news for bonds because a strengthening housing market makes a broader economic recovery much more likely. However, this data is not one of the more important reports we see each month, so its impact on today’s rates has been fairly minimal.

Next week is much more active in terms of important economic reports than this week was. There are reports that are considered to be highly important scheduled for release multiple days. They include a key measure of consumer confidence, personal income and spending data and the preliminary estimate of the 3rd Quarter Gross Domestic Product (GDP). We also have a couple of Treasury auctions to look out for.

None of the important data is scheduled for release Monday, so I am expecting stocks to heavily influence trading and any changes to mortgage pricing. Look for details on next week’s reports and 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... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/22

2009-10-22T09:35:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened in negative territory again as traders still wait for direction on the stock markets. Stocks are mixed with the Dow up 44 points and the Nasdaq down 8 points. The bond market is currently down 6/32, but we will likely see an improvement in mortgage rates of approximately .250 of a discount point due to strength late yesterday.

Neither of today’s economic releases were considered to be highly important. The Labor Department gave us favorable news with an announcement that 531,000 new claims for unemployment benefits were filed last week. This was higher than expected, indicating that the employment sector may be weakening. However, this data usually has little influence on mortgage rates unless it varies greatly from forecasts because it tracks a week’s worth of new claims.

Late this morning the Conference Board, who is a New York-based business research group, said that their Leading Economic Indicators (LEI) rose 1.0% last month. This was a larger jump than what analysts had expected, meaning that economic activity may increase over the next three to six months at a faster pace than many had thought. This is negative news for bonds and mortgage rates because rapid economic growth raises fears of inflation that makes long-term securities such as mortgage-related bonds less attractive to investors.

Yesterday afternoon’s release of the Fed Beige Book didn’t give us any significant surprises. It pointed towards a stabilizing economy in most regions and slight growth in some, which was the general consensus anyhow. This made it a non-factor on mortgage rates late yesterday.

September’s Existing Home Sales will be posted late tomorrow morning. This National Association of Realtors report gives us an indication of housing sector strength and mortgage credit demand by tracking home resales. It likely will have little influence on the bond market or mortgage rates unless its results vary greatly from analysts’ forecasts. It is expected to show an increase in sales from August to September, meaning that the housing sector likely strengthened.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/21/2009

2009-10-21T11:59:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened well in negative territory following despite no relevant economic news being released. The stock markets are showing gains with the Dow up 48 points and the Nasdaq up 16 points. The bond market is currently down 16/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point.

There was no relevant economic data posted this morning, but this afternoon brings us the release of the Fed Beige Book. This 2:00 PM release details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during their FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation or economic growth from the last release, we could see mortgage rates revise higher this afternoon.

The Labor Department will give us last week’s unemployment numbers early tomorrow morning. Analysts are expecting it to show that 517,000 new claims for benefits were filed last week. A larger number would be favorable for bonds, but this data is not important enough to heavily influence mortgage rates.

The next monthly report is September’s Leading Economic Indicators (LEI) late tomorrow morning. This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.9% from August’s reading. This would indicate that economic activity is likely to increase fairly rapidly. That would be bad news for the bond market and mortgage rates, but this report is considered to be only 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... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/20/2009

2009-10-20T10:02:00.001-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened in positive territory following weaker than expected economic reports and early stock losses. The stock markets are negative ground with the Dow down 52 points and the Nasdaq down 14 points. The bond market is currently up 16/32, which will likely improve this morning’s mortgage rates by approximately .125 - .250 of a discount point.

The Labor Department reported this morning that September’s Producer Price Index (PPI) fell 0.6% while the core data fell 0.1%. Both of these readings were weaker than expected, indicating that inflationary pressures at the producer level of the economy remained subdued last month. This is very good news for bonds because inflation erodes the value of a bond’s future fixed interest payments. Therefore, a low inflation environment makes bonds more attractive to investors and leads to lower mortgage rates.

September’s Housing Starts was also released this morning. It also showed weaker than expected results, meaning that the number of construction starts of homes fell short of expectations. This is good news for bonds because a weak housing sector makes a broader economic recovery less likely. However, this data was not nearly important to the markets as the PPI readings were.

The only data scheduled for release tomorrow comes during afternoon trading when the Federal Reserve will release its Beige Book at 2:00 PM ET. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during their FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation or economic growth from the last release, we could see mortgage rates revise higher shortly after its release.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary week of 10/18

2009-10-19T05:04:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of five economic reports for the markets to digest. Only one of these reports is considered to be highly important to mortgage rates, but this by no means leads me to believe we will have an uneventful week. This will be an extremely busy week for corporate earnings, which usually translates into stock volatility. The lack of important economic data on this week’s calendar makes it more likely that any significant swings in stock prices will influence bond trading and mortgage rates.

There is nothing of importance scheduled to be posted tomorrow morning. We will get a couple of important earnings releases including Texas Instruments and Apple, Inc, but they are being announced after the markets close tomorrow. This means that any reaction in the markets won’t come until Tuesday’s trading. I am thinking that tomorrow may end up being one of the calmer days for mortgage rates.

September’s Producer Price Index (PPI) is the first report of the week and the most important of the five. This index measures inflationary pressures at the producer level of the economy. Analysts are expecting to see no change in the overall index and a 0.1% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. However, weaker than expected readings should lead to lower rates Tuesday. September’s Housing Starts is the second report of the day, but is one of the week’s least important pieces of data. It gives us an indication of housing sector strength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show an increase in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates. The PPI report should be much more of an influence on mortgage rates Tuesday than this housing report will.

The only data scheduled for release Wednesday comes during afternoon trading when the Federal Reserve will release its Beige Book at 2:00 PM ET. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during their FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation or economic growth from the last release, we could see mortgage rates revise higher shortly after its release.

The next report is September’s Leading Economic Indicators (LEI) late Thursday morning. This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.9% from August‘s reading. This would indicate that economic activity is likely to increase fairly rapidly. That would be bad news for the bond market and mortgage rates, but this report is considered to be only moderately important.

September’s Existing Home Sales will be posted at 10:00 AM ET Friday. This report gives us an indication of housing sector strength and mortgage credit demand by tracking home resales. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show an increase in sales from August to September.

Overall, look for Tuesday to be the most important day of the week with the PPI being posted. However, if we see a significant rally or sell-off in stocks any particular day, it may end up bringing us the biggest single day change in mortgage pricing. The negative tone in bonds over the past two weeks may be subsiding somewhat, but I believe we still need to remain cautious towards mortgage rates. If the corporate earnings releases are generally weaker than forecasts, I may change to a less conservative stance. But until there is some strong evidence that the worst may be behind us, it is prudent to proceed cautiously if still floating an interest rate.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/16/2009

2009-10-16T09:25:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened in positive territory following a weak open in stocks. The stock markets are in selling mode during early trading with the Dow down 110 points and the Nasdaq down 28 points. Weaker than expected earnings reports from a couple of major names is the main reason for the early selling in stocks. The bond market is currently up 9/32, but we will likely still see an increase in this morning’s mortgage rates of approximately .250 of a discount point due to weakness late yesterday.

There were two reports released this morning, but neither can be considered highly important to the markets or mortgage rates. September’s Industrial Production data was the first, revealing a 0.7% increase in industrial output last month. This was much stronger than forecasts, meaning that production at U.S. factories, mines and utilities exceeded expectations. This can be considered negative news for bonds, but fortunately the bond market has not had much of a reaction to this news.

The last report of the week was October’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment late this morning. It came in at 69.4, well below forecasts of 73.5. This indicates that consumers were less optimistic about their own financial situations than many had thought. That is good news for the bond market because falling levels of consumer confidence usually means consumers are less likely to make large purchases in the near future, limiting gains in economic activity. However, this report is considered to be only moderately important to the markets and has not had a major influence on this morning’s trading or mortgage rates.

Next week brings us a handful of relevant economic reports for the markets to digest. Only one of them is considered very important, meaning it has the potential of significantly affecting mortgage rates. The rest are either of moderate or low importance, which means that they may affect mortgage rates slightly. None of the week’s relevant data is being posted Monday, therefore, the stock markets are likely to influence bond trading and 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.... 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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/15

2009-10-15T08:27:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market initially opened well in negative territory but has since rebounded after stocks opened in negative ground. The Dow is currently down 28 points while the Nasdaq has fallen 12 points. While those may be minor losses, the concern is the fact that the Dow has slipped below the 10,000 benchmark that we heard so much about yesterday. Investors’ concerns that stocks may not be able to hold recent gains has helped boost bond prices during early morning trading. The result is the bond market currently up 3/32, but I am expecting to see an increase in this morning’s mortgage rates of approximately .375 of a discount point compared to yesterday’s morning rates.

The Labor Department reported this morning that September’s Consumer Price Index (CPI) rose 0.2% and that the core data reading rose 0.2%. The overall reading matched forecasts but the more important core data exceeded expectations. This means that prices rose more than expected at the consumer level of the economy when excluding volatile food and energy prices. While the difference was minor, it still can be considered bad news for bonds and mortgage rates because rising prices raises inflation concerns in the bond market.

They also gave us last week’s unemployment figures, saying that 514,000 new claims for unemployment benefits were filed last week. This was a lower total than many had thought, but since this data is not considered highly important, its impact on this morning’s trading and mortgage pricing has been minimal.

Yesterday’s release of minutes of the most recent FOMC meeting revealed that most Fed members feel that the recession is indeed already over. However, many feel that the weak labor market and modest economic growth expectations still leave a threat to the recovery. The best way to describe the overall thought process is that they feel the recession is over and the economy is starting to grow, but we are not out of the woods yet. There are still variables that could threaten the economic recovery. Generally speaking, the minutes did give us more detailed insight into the Fed’s thoughts and led to speculation that more economic stimulus options may be explored in the future. This is fairly neutral for the bond market as the end of the recession can be considered bad news but the cautious approach still makes bond appealing to investors.

There are two reports scheduled for release tomorrow morning. September’s Industrial Production data is the first release of the day and will be posted mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.1% increase in output from August’s level, meaning that manufacturing activity rose slightly. A larger than expected increase in output would be negative for bonds and mortgage rates while a decline should help push mortgage rates lower tomorrow morning.

The last report of the week is October’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment late morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 74.0, up slightly from September’s final of 73.5.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/14/2009

2009-10-14T08:33:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened in negative after this morning’s economic data showed stronger than expected readings. The stock markets are in positive ground with the Dow up 98 points and the Nasdaq up 20 points. The bond market is currently down 6/32, but I am expecting to see a slight improvement in this morning’s mortgage pricing due to strength in bonds late yesterday.

The Commerce Department posted September’s Retail Sales figures early this morning, announcing a 1.5% decline in sales from August’s level. This was a smaller than expected drop, indicating that consumers spent more than many had thought. Even if more volatile auto-transactions are excluded, sales exceeded expectations. This is bad news for bonds and mortgage rates because consumer spending makes up two-thirds of the U.S. economy. The stronger than expected spending fuels economic growth at a faster pace than forecasts are calling for.

Later today we will get to see the minutes of the most recent FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher this afternoon. However, if they indicate that inflation is still not a threat and that a rate increase is not likely in the in the near future, the bond market and mortgage rates should remain fairly calm.

Tomorrow morning brings us another major economic release. September’s Consumer Price Index (CPI) will be released during early trading. It measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.2% in the overall index and an increase of 0.1% in the core data reading. The core data reading is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase in the core reading could raise inflation concerns in the bond market and push mortgage rates higher tomorrow. However, a smaller than expected reading should lead to lower mortgage rates. This is one of the most important reports we see each month, so its impact on mortgage rates could be significant.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/13/2009

2009-10-13T08:50:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened well in positive territory following last week’s sell-off. The stock markets are helping bonds by showing early losses with the Dow down 38 points and the Nasdaq down 6 points. The bond market is currently up 21/32, but we likely will see little change in this morning’s mortgage rates due to weakness late Friday.

There is no relevant economic news scheduled for release today. The bond market was closed yesterday in observance of the Columbus Day holiday, so today’s trading picks up from Friday’s levels. Last week closed on a significant sell-off so this morning’s gains in bonds could be investors finalizing positions. Some traders feel last week’s sell-off was overkill, meaning market participants feel current prices are a good buy. This has attracted funds into bonds this morning.

Tomorrow morning brings us the week’s first piece of data when September’s Retail Sales report is posted. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. Since consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 2.1% decline in sales. The large drop from August’s sales is expected to come from a significant decline in auto transactions since the Cash for Clunkers program ended.

Also scheduled for release tomorrow is the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher Wednesday afternoon. However, if they indicate that inflation is still not a threat and that a rate increase is not likely in the in the bear future, the bond market and mortgage rates should remain calm.

Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are tomorrow’s Retail Sales report and Thursday’s CPI data. But the active week for corporate earnings can also heavily influence trading and mortgage rates any day of the week. Accordingly, please proceed cautiously if you have not locked an interest rates yet.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

massachusetts Mortgage rate Commentary week of 10/11

2009-10-13T02:07:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of five economic reports that are of interest to the mortgage market along with the minutes from the last FOMC meeting. The week also gets heavy in quarterly earnings releases for companies, which could cause significant movement in the stock markets again. The earnings results could affect bond trading as investors move funds into stocks if the reports are good. The other possibility is that the earnings reports would generally disappoint, meaning investors may move funds out of stocks and into bonds as a safe-haven. The latter would be good news for the bond market and mortgage rates.

The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first piece of data comes Wednesday morning when September’s Retail Sales report is posted. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. Since consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 2.1% decline in sales. The large drop from August’s sales is expected to come from a significant decline in auto transactions since the Cash for Clunkers program ended.

Also scheduled for release Wednesday is the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher Wednesday afternoon. However, if they indicate that inflation is still not a threat and that a rate increase is not likely in the near future, the bond market and mortgage rates should remain calm.

Thursday morning brings us another major economic release. September’s Consumer Price Index (CPI) will be released early Thursday morning. It measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.2% in the overall index and an increase of 0.1% in the core data reading. A larger than expected increase in the core reading could raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates. This is one of the most important reports we see each month, so its impact on mortgage rates could be significant.

The remaining two reports are both scheduled for release Friday morning. September’s Industrial Production data is the first release of the day and will be posted mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.1% increase in output from August’s level, meaning that manufacturing activity rose slightly. A larger than expected increase in output would be negative for bonds and mortgage rates while a decline should help push mortgage rates lower Friday morning.

The last report of the week is October’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 74.0, up slightly from September’s final of 73.5.

Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday’s Retail Sales report and Thursday’s CPI data. But the active week for corporate earnings can also heavily influence trading and mortgage rates any day of the week. Accordingly, please proceed cautiously if you have not locked an interest rates yet.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/09

2009-10-09T09:00:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened down sharply as yesterday’s afternoon selling continues into this morning. The stock markets are showing gains with the Dow up 43 points and the Nasdaq up 11 points. The bond market is currently down 30/32, which with yesterday’s afternoon weakness will likely push this morning’s mortgage rates higher by approximately .500 - .625 of a discount point over yesterday’s morning rates.

Today’s only economic data was August’s Goods and Services Trade Balance report. It revealed a $30.7 billion trade deficit, exceeding forecasts. However, this news is relatively inconsequential to the markets and has had little impact on today’s trading or mortgage rates.

Yesterday’s 30-year Bond sale did not go nearly as well as Wednesday’s 10-year auction. This led to afternoon selling in bonds yesterday that created upward revisions to mortgage rates. This weakness did not come as a surprise, so hopefully our loyal followers headed the conservative approach towards mortgage rates. Unfortunately, today may not be the end of the selling or upward move in rates.

Next week brings us the release of a couple of very important economic reports and the release of the minutes from the last FOMC meeting. The bond market will be closed Monday in observance of the Columbus Day holiday, but the stock markets will be open for trading. There is no early close for the bond market today.

The week’s first relevant economic report does not come until Wednesday morning. Look for details on next week’s data and 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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/08

2009-10-08T11:16:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened flat despite early stock gains and stronger than expected unemployment data. Stocks are rallying with the Dow up 80 points and the Nasdaq up 25 points. The bond market is nearly unchanged from yesterday’s close, but we will likely see an improvement in this morning’s mortgage rates of approximately .125 - .250 of a discount point due to strength late yesterday.

The Labor Department reported this morning that 521,000 new claims for unemployment benefits were filed last week. This was lower than expected and the lowest total in approximately nine months. This is considered bad news for bonds, but fortunately this data is not considered to be highly important and has had little impact on this morning’s mortgage rates.

Yesterday’s 10-yeat Note sale actually went very well. Investor demand was strong, indicating there is still an appetite for U.S. debt. The bond market moved higher after the results were posted yesterday afternoon, but the rally fell well short of what would be expected. This could be a result of concerns about today’s 30-year Bond sale, or could mean that there is strong resistance at current prices. I am thinking the latter, which is the reason for the conservative approach towards mortgage rates. Theoretically, bonds could still move higher, pushing mortgage rates lower. However, until we are able to break below current levels, I am staying on the conservative side as rates will almost always spike higher faster than they move lower.

There is no monthly or quarterly economic data scheduled for release today. Look for any swings in stock prices to affect bonds, particularly since we are heading into corporate earnings season. Today’s 30-year Bond sale probably will not heavily influence mortgage rates this afternoon, but it does have the potential to cause rate changes. I believe its potential negative impact on rates is greater than its likely positive impact. This means that a strong sale today may lead to minor improvements to mortgage pricing this afternoon, but a weak sale could lead to a noticeable increase in rates.

Tomorrow morning brings us the only factual economic data of the week, but it is one of the least important reports we get each month. August’s Goods and Services Trade Balance will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates. It is expected to show a $32.9 billion trade deficit.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/07

2009-10-07T08:13:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened in positive territory despite a lack of factual economic data being posted today. The stock markets are showing minor gains after a strong two-day rally. The Dow is currently down 24 points while the Nasdaq has slipped 2 points. The bond market is currently up 15/32, but I don’t think we will see much of a change in this morning’s mortgage rates as lenders wait for today’s debt sale before making any adjustments.

There is no relevant economic data scheduled for release today, but we do have the 10-year Treasury Note auction to contend with. This sale will give us an important measure of investor interest in longer-term U.S. debt, particularly from international buyers. If there is a strong demand in the sale, we should see the broader bond market rally and mortgage rates move lower after the results are posted at 1:00 PM ET. However, a lackluster interest in the sale would likely lead to higher mortgage rates this afternoon.

The only semi-relevant economic news scheduled to be posted tomorrow are weekly unemployment figures from the Labor Department. They are expected to say that 540,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week. However, unless there is a wide variance between the actual number and the forecasted number of new claims, this data will likely have a minimal impact on bond trading and mortgage rates.

The 30-year Bond auction is tomorrow also. It is less important to mortgage rates than today’s 10-year Note sale, but its’ announced results can influence bond trading enough to revise mortgage rates slightly tomorrow afternoon. The same principals apply as today’s sale. A strong demand is good news for bonds while a weak sale could lead to higher mortgage rates late tomorrow.

The only factual economic data of the week will be posted Friday morning. August’s Goods and Services Trade Balance will be released that day, but is not likely to cause much of a change in mortgage pricing. It will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates. It is expected to show a $32.9 billion trade deficit.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/6/09

2009-10-06T09:45:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened in negative territory with the stock markets in a sizable rally. The Dow is currently up 150 points while the Nasdaq has gained 36 points. The bond market is currently down 8/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

There is no specific report or reason for stocks rallying this morning. Improving global economic conditions can be considered a contributing factor, but it is more of a situation where the general sentiment in the stock markets is favorable. This morning’s bond weakness is partly a result of the stock gains as investors shift funds from the safety of bonds to join the stock rally.

Also contributing to this morning’s negative opening in bonds is tomorrow’s big Treasury auction. It is common to see some weakness in bonds ahead of the major auctions as market participants prepare for the sale. If the sales go well, those pre-sale losses are usually recovered shortly after the auction is completed.

There is no relevant reports or events scheduled for today. Tomorrow does not bring us any relevant economic news but the 10-year Treasury Note auction will be held tomorrow. This sale will give us an important measure of investor interest in longer-term U.S. debt, particularly from international buyers. If there is a strong demand in the sale, we should see the broader bond market rally and mortgage rates move lower tomorrow afternoon. However, a lackluster interest in the sale would likely lead to higher mortgage rates during afternoon trading. The results of the sale will be posted at 1:00 PM ET.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/05/09

2009-10-05T10:16:00.000-07:00

Monday’s bond market has opened in positive territory, following the direction of stocks. The stock markets are showing gains of 68 points and 16 points for the Dow and Nasdaq respectively. The bond market is currently up 6/32, but I don’t believe we will see much of a change in this morning’s mortgage rates.

This week brings us only one monthly economic report for the markets to digest and it is not considered to be of high importance. This means that the week will be left mostly up to the stock markets and other influences since there is a lack of factual data for bonds to trade on. In addition to the one report, we also have two relevant Treasury auctions that can also cause movement in

Massachusetts Mortgage Rate Commentary week of 10/4

2009-10-05T03:25:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us only one monthly economic report for the markets to digest and it is not considered to be of high importance. This means that the week will be left mostly up to the stock markets and other influences since there is a lack of factual data for bonds to trade on. In addition to the one report, we also have two relevant Treasury auctions that can also cause movement in rates if demand for them is particularly strong or weak.

The first relevant event of the week is Wednesday’s 10-year Treasury Note auction. This sale will give us an important measure of investor interest in longer-term U.S. debt, particularly from international buyers. If there is a strong demand in the sale, we should see the broader bond market rally and mortgage rates move lower. However, a lackluster interest in the sale would likely lead to higher mortgage rates Wednesday afternoon.

The second important sale is Thursday’s 30-year Bond sale. It is not as important to mortgage rates as Wednesday’s 10-year Note sale is, but it is important enough to influence trading and bond market sentiment. As with Wednesday’s sale, a strong demand would be good news for mortgage pricing while a weak interest may lead to upward revisions to rates Thursday afternoon.

The only factual economic data of the week will be posted Friday morning. August’s Goods and Services Trade Balance will be released that day, but is not likely to cause much of a change in mortgage pricing. It will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates. It is expected to show a $32.9 billion trade deficit.

Overall, I suspect this is going to be fairly quiet week for the bond market and mortgage rates, especially compared to last week. For the most part, I believe the week will be left to the stock markets and the Fed auctions. The most important day of the week is likely Wednesday due to the 10-year Treasury Note sale, but any day of significant stock volatility may make that particular day the most eventful.

The bond market will be closed next Monday in observance of the Columbus Day holiday, but there will not be an early close in trading Friday. The only recognition of the holiday comes next Monday.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/02/09

2009-10-02T10:24:00.001-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened relatively flat despite weaker than expected economic data. The stock markets initially opened well in negative territory but have since recovered a good portion of those losses. The Dow is currently down 12 points and the Nasdaq is down 5 points. The bond market is down 2/32, but we still should see an improvement in this morning’s mortgage rates of approximately .250 of a discount point due to strength late yesterday.

The Labor Department gave us today’s big news with the release of September’s Employment report. They reported that the U.S. unemployment rate stood at 9.8% last month, as expected. However, the number of lost jobs was 263,000, exceeding forecasts of 180,000. The third important component of the report- average hourly earnings, did not rise as much as thought. Overall, this data is favorable to bonds, but we have not seen much buying this morning as it appears the recent rally may be running out of steam.

The second report came from the Commerce Department, who said that new orders at U.S. factories fell 0.8% in August. This was much lower than the 0.5% increase that was expected and indicates that the manufacturing sector is weaker than many had thought. That is also good news for bonds and mortgage rates, but the employment figures were much more important to the markets than this factory report. Therefore, its impact on trading has been minimal.

Next week is pretty light in terms of economic reports, so look for the stock markets to influence trading and mortgage rates. Since the bond market has failed to rally around today’s news, it may be time to take a conservative approach towards mortgage rates if still floating a rate with your lender. Look for more details on next week’s events and recommendations 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... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 10/01/09

2009-10-01T10:43:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened in positive following early stock losses and mixed economic news. The stocks markets are in selling mode this morning with the Dow down 153 points and the Nasdaq down 52 points. The bond market is currently up 22/32, which should improve this morning’s mortgage rates by approximately .125 - .250 of a discount point.

The first of today’s two important economic reports was August’s Personal Income and Outlays that revealed a 0.2% increase in personal income and a 1.3% rise in spending. Both of these readings were higher than expected, indicating that consumers had more money to spend than thought and were spending it. This is bad news for bonds and mortgage rates because it hints that consumer spending will help fuel economic growth.

It was the second report of the day that gave us favorable news for bonds. The Institute for Supply Management (ISM) said that their manufacturing index slipped from 52.9 in August to 52.6 last month. This means that fewer surveyed trade executives felt business improved than was expected. Analysts had forecasted an increase in the index, meaning manufacturer sentiment was not as strong as thought. This is good news since it indicates a weaker than expected manufacturing sector.

The Labor Department said that 551,000 new claims for unemployment benefits were filed last week, exceeding forecasts of 535,000. While this data is not considered to be highly important because it covers only a week’s worth of claims, it could mean that tomorrow’s major employment figures could come in weaker than expected.

Tomorrow morning brings us the release of the almighty Employment report for September. This report will reveal the U.S. unemployment rate, number of new payrolls added or lost during the month and average hourly earnings. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, falling payrolls and a drop in earnings. Analysts are expecting to see the unemployment rate at 9.8%, a decline in new payrolls of approximately 180,000 and a 0.2% increase in earnings. Stronger than expected reading will likely drive mortgage rates higher, but if they show weaker than forecasted figures bonds should rally, pushing mortgage rates lower.

The Commerce Department will post August’s Factory Orders data late tomorrow morning. This manufacturing sector report is similar to last week’s Durable Goods Orders release, but includes orders for non-durable goods. It can usually impact the financial markets enough to change mortgage rates slightly if it varies from forecasts by a wide margin, but due to the importance of the Employment report I doubt this data will heavily influence the markets. Current forecasts are calling for an increase in new orders of approximately 0.5%.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/30/09

2009-09-30T09:49:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market has opened flat despite early stock weakness. The stocks markets are posting noticeable losses with the Dow down 83 points and the Nasdaq down 15 points. The bond market is nearly unchanged from yesterday’s closing level, but we should still see an improvement in this morning’s mortgage rates of approximately .250 of a discount point due to strength late yesterday.

Today’s only relevant economic data was the final revision to the 2nd Quarter Gross Domestic Product (GDP). It showed a revised reading of a 0.7% decline that was stronger than expected. The last revision revealed a 1.0% drop in GDP, meaning the economy was stronger last quarter than many had thought. Theoretically, this is negative news for bonds because stronger economic activity makes long-term securities such as mortgage-related bonds less attractive to investors. However, this data is so aged now that it has not had much of an impact on trading this morning or today’s mortgage rates.

This morning’s speech by Atlanta Federal Reserve Bank President Dennis Lockhart gave us a bit of interesting news. It appears that not all Fed members agree about certain actions taken by them to head off the crisis in the markets and to boost economic activity and their exit plan from those moves. But none of his comments are concerning. His outlook on the economy was in line with the general consensus- cautious optimism and concern about the housing and labor markets particularly. I don’t believe his comments affected trading or mortgage pricing this morning.

Tomorrow morning brings us the release of two important economic reports. The first is August’s Personal Income and Outlays at 8:30 AM ET. It gives us an indication of consumer ability to spend and current spending habits. This is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is negative news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. It is expected to show a 0.1% rise in income and a 1.1% increase in spending due to auto sales.

The Institute for Supply Management’s (ISM) September manufacturing index is the second. It will be released at 10:00 AM ET tomorrow morning. This index gives us an indication of manufacturer sentiment. Analysts are expecting an increase to 54.0 from last month’s 52.9 reading. The 50.0 benchmark is extremely important because a reading above that level means more surveyed executives felt business improved than those who said it had worsened. This data is important not only because it measures manufacturer sentiment, but it is also very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall tomorrow morning.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/29/2009

2009-09-29T08:59:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market initially opened well in negative territory but has since recovered a good portion of those losses following a much weaker than expected consumer confidence reading. The stocks markets are posting losses with the Dow down 27 points and the Nasdaq down 9 points. The bond market is currently down 2/32, but this is well off earlier lows. However, we will still likely see an improvement to this morning’s mortgage rates of approximately .125 of a discount point due to strength yesterday.

The Conference Board, who is a New York based business research group, reported late this morning that their Consumer Confidence Index (CCI) for September stood at 53.1. That was a decline from August’s reading and well below forecasts of a 57.0 reading, indicating that consumers were much less optimistic about their own financial situations than many had thought. This can be considered good news for bonds and mortgage rates because it means that consumers are less likely to make a large purchase in the near future.

Tomorrow’s only relevant report is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. It is expected to show a slight downward revision from the previous estimate of a 1.0% decline in GDP.

Also tomorrow is a speech by Atlanta Federal Reserve Bank President Dennis Lockhart. He will be speaking at 10:30 AM ET about the Fed’s economic outlook at the University of South Alabama. These types of speeches don’t always affect the markets, but they do draw some attention from market participants just in case something new or unexpected is said. It likely will not impact mortgage rates, but the potential makes it worth noting.

Thursday and Friday brings us the release of the week’s most important economic data. Each day has two reports that can move the markets and mortgage pricing. The most important of them comes Friday morning when September’s Employment data is posted, but Thursday’s ISM manufacturing index is also highly important.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/28/2009

2009-09-28T08:22:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened up slightly despite strong stock gains. The stock markets are rallying with the Dow up 126 points while the Nasdaq has gained 41 points. The bond market is currently up 4/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

There is no relevant economic news scheduled for release today. Tomorrow starts this week’s fairly busy calendar with the first release September’s Consumer Confidence Index (CCI) at 10:00 AM ET. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show an increase from last month’s reading, indicating that consumers are more optimistic about their own financial situations than last month and more likely to make large purchases in the near future. This is bad news for the bond market and mortgage rates because consumer spending fuels economic growth. Analysts are calling for a reading of approximately 57.0, up from August’s 54.1. If we see a larger than expected increase, the bond market should move lower and mortgage rates move higher tomorrow.

Wednesday’s sole report is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. It is expected to show a slight downward revision from the previous estimate of a 1.0% decline in GDP.

Overall, it is likely going to be a very active week in the markets and mortgage rates. The most important day will be Friday due to the employment report being scheduled, but tomorrow and Thursday’s data can also fairly heavily influence mortgage rates. I would recommend maintaining contact with your mortgage professional the next several days.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary week of 9/27/09

2009-09-28T02:49:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of six relevant economic reports for the bond market to digest. There is nothing of importance scheduled for release tomorrow, so look for the stock markets to influence bond trading and possibly mortgage rates. I would not be surprised to see a relatively calm day as traders prepare for this week’s data, some of which is considered to be extremely important.

The first release of the week is September’s Consumer Confidence Index (CCI) late Tuesday morning. This Conference Board index will be posted at 10:00 AM and gives us a measurement of consumer willingness to spend. It is expected to show an increase from last month’s reading, indicating that consumers are more optimistic about their own financial situations than last month and more likely to make large purchases in the near future. This is bad news for the bond market and mortgage rates because consumer spending fuels economic growth. Analysts are calling for a reading of approximately 57.0, up from August’s 54.1. If we see a larger than expected increase, the bond market should move lower and mortgage rates move higher Tuesday.

Wednesday’s sole report is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. It is expected to show a slight downward revision from the previous estimate of a 1.0% decline in GDP.

August’s Personal Income and Outlays will be released early Thursday morning. It gives us an indication of consumer ability to spend and current spending habits. This is important to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is negative news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. It is expected to show a 0.1% rise in income and a 1.1% increase in spending due to auto sales.

The Institute for Supply Management (ISM) will post their manufacturing index for September late Thursday morning. This index gives us an indication of manufacturer sentiment. Analysts are expecting an increase from last month’s 52.9 reading. The 50.0 benchmark is extremely important because a reading above that level means more surveyed executives felt business improved than those who said it had worsened. This data is important not only because it measures manufacturer sentiment, but it is also very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall Thursday morning.

The Labor Department will post September’s Employment report early Friday morning. This report will reveal the U.S. unemployment rate, number of new payrolls added or lost during the month and average hourly earnings. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, falling payrolls and a drop in earnings.

If this report gives us weaker than expected readings Friday, bond prices should move higher and we should see lower mortgage rates Friday. However, stronger than forecasted readings could be disastrous for mortgage pricing. Analysts are expecting to see the unemployment rate at 9.8%, a decline in new payrolls of approximately 180,000 and a 0.2% increase in earnings.

The final report of the week comes late Friday morning when the Commerce Department will post August’s Factory Orders data. This manufacturing sector report is similar to last week’s Durable Goods Orders release, but includes orders for non-durable goods. It can usually impact the financial markets enough to change mortgage rates slightly if it varies from forecasts by a wide margin, but due to the importance of the Employment report I doubt this data will heavily influence the markets. Current forecasts are calling for an increase in new orders of approximately 0.5%.

Overall, it is likely going to be a very active week in the markets and mortgage rates. The most important day will be Friday due to the employment report being scheduled, but Tuesday’s and Thursday’s data can also fairly heavily influence mortgage rates. With important data being released each day of the week except tomorrow, I would recommend maintaining contact with your mortgage professional.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/25/2009

2009-09-25T08:59:00.001-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened flat following the release of mixed economic new. The stock markets are showing minor losses with the Dow down 14 points and the Nasdaq down 10 points. The bond market is currently up 2/32, which will likely improve this morning’s mortgage rates by approximately .125 due to strength late yesterday after news that the 7-year Note sale went pretty well.

There were three reports posted this morning. Results of two of them can be considered negative for bonds and mortgage rates while one is good news. Since the most important one gave us much weaker than expected results, we have not seen much selling in bonds, preventing an increase mortgage pricing.

The Commerce Department gave us August’s Durable Goods Orders early this morning. They reported a 2.4% decline in new orders for big-ticket items at U.S. manufacturers. This was far short of analysts’ forecasts of a 0.5% increase and indicates that the manufacturing sector is weaker than expected. This is good news for bonds and mortgage rates.

The second report came from the University of Michigan who posted their revised Index of Consumer Sentiment for September. They announced a 73.5 reading that was well above the preliminary reading earlier this month and current forecasts. That means surveyed consumers were more optimistic about their own financial situations than many had expected. This is considered negative news for bonds because its hints that consumers may be more willing to make large purchases in the near future, fueling economic growth.

The third and final report of the week was August’s New Home Sales. The Commerce Department said that sales of newly constructed homes rose last month, but at a slower pace than analysts had forecasted. The increase in sales points toward housing sector growth that is bad for bonds and mortgage rates. The fact that it fell short of expectations is actually good for bonds but many had hoped for a decline in sales such as yesterday’s Existing Home Sales report revealed.

Next week is extremely busy in terms of economic release. There is no relevant data scheduled for release Monday, but there are reports being posted every other day of the week with some days having multiple reports scheduled. And some of the reports on next week’s calendar are considered to be extremely important to the markets. 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... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 07/24/2009

2009-09-24T09:32:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened in positive territory following early stock weakness and news of an unexpected decline in home sales. The stock markets are showing losses with the Dow down 38 points and the Nasdaq down 25 points. The bond market is currently up 9/32, which will likely improve this morning’s mortgage rates by approximately .125 - .250 of a discount point compared to yesterday’s morning rates.

The Labor Department announced this morning that 530,000 new claims for unemployment benefits were filed last week. This was much lower than the 550,000 that was expected, meaning the employment sector was stronger than thought last week. That is bad news for bonds and mortgage rates, but since this data tracks only a week’s worth of new claims, its impact on rate has been minimal.

The National Association of Realtors gave us today’s second piece of data with the release of August’s Existing Home Sales report. They said that resales of existing homes fell 2.7% last month when analysts were expecting them to report an increase. This was the first decline in five months, raising concerns that the housing sector may not be recovering as quickly as some had hoped. This is good news for bonds and mortgage rates because a broader economic recovery would be difficult with the housing sector still softening.

Today is the 7-year Treasury Note sale. If it is met with a similarly weak demand as yesterday’s 5-year Note sale was, we could see mortgage rates move higher during afternoon trading. However, a strong demand from investors could lead to afternoon improvements to mortgage rates. This sale can be considered more important for mortgage rates than yesterday’s 5-year auction was, meaning we may see a bigger reaction to its results than we did yesterday.

Tomorrow morning brings us the release of three economic reports, including the week’s most important one. That is August’s Durable Goods Orders, which will be posted early morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for an increase in orders of 0.5%. A smaller than expected increase could help bond prices and cause mortgage rates to drop tomorrow. However, a larger than expected rise would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

The second report is the University of Michigan’s Index of Consumer Sentiment. This is the revised reading for September. The preliminary reading that was released earlier this month revealed a 70.2 reading. Analysts are expecting to see a small upward revision, meaning consumer confidence was slightly higher than previously thought. A lower than expected reading would be good news for bonds and help improve mortgage rates tomorrow.

The final report of the week is August’s New Home Sales. It is expected to show that sales of newly constructed homes rose slightly in August. As with most of this week’s data, this report will likely not have a significant impact on mortgage rates unless its readings differ greatly 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... Float if my closing was taking place over 60 days from now...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/23/2009

2009-09-23T08:29:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market opened slightly in negative territory as traders prepare for today’s Treasury auction and the FOMC post-meeting statement. The stock markets are showing small losses with the Dow down 19 points and the Nasdaq down 2 points. The bond market is down 2/32, which will likely push this morning’s mortgage rates higher by .125 - .250 of a discount point.

I am expecting to see a relative calm morning in trading and mortgage rates but would not be surprised at all to see a revision to mortgage pricing later today. This morning’s weakness in bonds is common ahead of important Treasury auctions. If the sales go well, we usually see those losses recovered during afternoon trading.

The Treasury is selling 5-year Notes today and will post results at 1:00 PM ET. This sale does not directly affect mortgage rates, but it does help set the tone for bonds in general. If the sale is met with a strong demand, the broader bond market will likely move higher this afternoon. That includes mortgage-related bonds and should lead to downward revisions to mortgage rates later today. But if there was a weak interest in the sale, bonds may tumble after the results are posted, causing upward changes to rates.

Also today is the adjournment of the FOMC meeting that started yesterday. The 2:15 PM ET announcement will very likely say there was no change to key short-term interest rates. This is what the markets are widely expecting, so it should have little impact on trading or mortgage rates. However, the post-meeting statement could very well lead to volatility this afternoon as investors dissect it in an effort to find when the Fed’s next move may come. Any indication of a potential rate increase in the near future could be disastrous for mortgage pricing because that would mean the Fed is concerned about inflation rising.

There will be an update to this report shortly after the markets have an opportunity to react to the FOMC results. That update will also address tomorrow’s data.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/22/09

2009-09-22T08:41:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market has opened up slightly despite no relevant economic news on tap today. The stock markets showing minor gains with the Dow up 27 points and the Nasdaq up 6 points. The bond market is currently up 4/32, but we will again likely see little change in this morning’s mortgage rates as traders and lenders wait for tomorrow’s events to take place before making any sizable changes.

There are no significant events or relevant economic reports scheduled for today. Investors seem to be preparing for tomorrow’s events and will likely keep bond prices near current levels until then. This means I am not expecting to see any noticeable changes to mortgage rates this afternoon.

The first of this week’s two important Treasury sales will take place tomorrow and the Fed’s two-day FOMC meeting will adjourn tomorrow afternoon. The Treasury will sell 5-year Notes tomorrow and 7-year Notes Thursday. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of each sale will be announced at 1:00 PM ET each day, so any reaction to the results will come during afternoon trading tomorrow and Thursday.

The FOMC meeting began today and will adjourn at 2:15 PM tomorrow afternoon. There is little possibility of seeing any type of change to key short-term interest rates. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find when the Fed’s next move may come. The wild card is how the markets react to the statement because the lack of a change to monetary policy will not affect the markets. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates during afternoon hours and Thursday morning.

We will finally get to see some economic data later this week. Thursday brings us the release of one relevant monthly report and Friday as three scheduled. None of the reports are considered to be extremely important to the markets, but we may see some movement in rates as a result of it, particularly Friday.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09-21-09

2009-09-21T09:38:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Monday’s bond market has opened in positive territory after this morning’s sole economic report gave us a slightly lower than expected reading. The stock markets are mixed with the Dow down 30 points and the Nasdaq up 6 points. The bond market is currently up 12/32, but we will likely see little change in this morning’s mortgage rates.

The Conference Board said late this morning that its Leading Economic Indicators (LEI) for August rose 0.6%, meaning that it is predicting moderate to rapid growth in economic activity over the next few months, but at a slightly slower pace than analysts had thought. This is basically good news for bonds, but an upward revision to July’s reading offset this news. Besides, this data is considered to be only moderately important and a wide variance would have been needed to really influence trading and mortgage rates.

The rest of the week brings us the release of four more relevant economic reports in addition to another FOMC meeting and two important Treasury auctions. None of the factual reports are considered to be highly important. In fact, most of the economic news is considered to be only moderately important. This should help limit the possibility of significant changes to mortgage rates most days this week.

There is relevant economic data scheduled for release tomorrow. The first of this week’s two important Treasury sales will take place Wednesday and the Fed’s two-day FOMC meeting will adjourn Wednesday afternoon. The Treasury will sell 5-year Notes Wednesday and 7-year Notes Thursday. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of each sale will be announced at 1:00 PM ET each day, so any reaction to the results will come during afternoon trading Wednesday and Thursday.

The FOMC meeting will begin tomorrow and adjourn at 2:15 PM Wednesday. There is little possibility of seeing any type of change to key short-term interest rates. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find when the Fed’s next move may come. The wild card is how the markets react to the statement because the lack of a change to monetary policy will not affect the markets. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates Wednesday afternoon and Thursday morning.

Overall, the single most important report of the week is Friday’s Durable Goods Orders, but the most important day will probably be Wednesday due to the FOMC adjournment and the 5-year Treasury Note auction. Thursday’s 7-year Note sale is actually a little more important for mortgage rates than Wednesday’s auction but the first of the two will give us an idea of what to expect from Thursday’s sale. I don’t believe any of this week’s data has the potential to move the markets or mortgage rates heavily. But, we may some change in rates day-to-day, with the most likely coming mid-week.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary week of 9/20/09

2009-09-21T04:28:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

This week brings us the release of five relevant economic reports in addition to another FOMC meeting and two important Treasury auctions. None of the factual reports are considered to be highly important. In fact, most of the economic news is considered to be only moderately important. This should help limit the possibility of significant changes to mortgage rates most days this week.

Unlike many Mondays, there is relevant data being posted tomorrow. The Conference Board will release its Leading Economic Indicators (LEI) for August late tomorrow morning. This index attempts to measure economic activity over the next three to six months. It is expected to show a 0.7% rise, meaning that it is predicting a sizable increase in economic activity over the next several months. A larger than expected reading would be considered bad news for bonds and could lead to a minor increase in mortgage rates tomorrow.

There is nothing of importance scheduled for release Tuesday, but the first of this week’s two important Treasury sales will take place Wednesday and the Fed’s two-day FOMC meeting will adjourn Wednesday afternoon. The Treasury will sell 5-year Notes Wednesday and 7-year Notes Thursday. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of each sale will be announced at 1:00 PM ET each day, so any reaction to the results will come during afternoon trading Wednesday and Thursday.

The FOMC meeting will begin Tuesday and adjourn at 2:15 PM Wednesday. There is little possibility of seeing any type of change to key short-term interest rates. However, the post-meeting statement could very well lead to volatility during afternoon trading as investors dissect it in an effort to find when the Fed’s next move may come. The wild card is how the markets react to the statement because the lack of a change to monetary policy will not affect the markets. If we see significant weakness in stocks, the bond market may benefit as a safe-haven from the volatility. This could lead to lower mortgage rates Wednesday afternoon and Thursday morning.

August’s Existing Home Sales report will be released late Thursday morning. The National Association of Realtors posts this data, giving us an indication of housing sector strength by tracking home resales in the U.S. It is expected to show a moderate increase from July’s sales, however, this data is not considered to be of high importance to the bond market unless it varies greatly from forecasts.

The remaining three reports will all be released Friday morning. August’s Durable Goods Orders will be posted early morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for an increase in orders of 0.3%. A smaller than expected increase could help bond prices and cause mortgage rates to drop Friday. However, a larger than expected rise would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

The second report is the University of Michigan’s Index of Consumer Sentiment. This is the revised reading for September. The preliminary reading that was released earlier this month revealed a 70.2 reading. Analysts are expecting to see a small upward revision, meaning consumer confidence was slightly higher than previously thought. A lower than expected reading would be good news for bonds and help improve mortgage rates Friday morning.

The final report of the week is August’s New Home Sales. It is expected to show that sales of newly constructed homes rose slightly in August. As with most of this week’s data, this report will likely not have a significant impact on mortgage rates unless its readings differ greatly from forecasts.

Overall, the single most important report of the week is Friday’s Durable Goods Orders, but the most important day will probably be Wednesday due to the FOMC adjournment and the 5-year Treasury Note auction. Thursday’s 7-year Note sale is actually a little more important for mortgage rates than Wednesday’s auction but the first of the two will give us an idea of what to expect from Thursday’s sale. I don’t believe any of this week’s data has the potential to move the markets or mortgage rates heavily. But, we may some change in rates day-to-day, with the most likely coming mid-week.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/18/2009

2009-09-18T10:34:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Friday’s bond market has opened in negative territory with little to drive trading. The stock markets are showing minor gains with the Dow up 36 points and the Nasdaq up 3 points. The bond market is currently down 7/32, but we will likely see little change in this morning’s mortgage rates due to strength late yesterday.

There is no relevant economic news scheduled for release today. Look for the stock markets to be the biggest influence on any swings in bond trading or mortgage rates this afternoon. As long as the stock markets remain fairly calm, mortgage rates will likely follow suit. However, this may be difficult because today is known as Quadruple Witching day in the stock markets. This is where stock index futures and options, stock options and individual stock futures all expire. As those options are executed throughout the day, it is common to see wide fluctuations in stocks. If the major stock indexes show sizable losses, bonds may benefit. If the indexes move higher, extending their recent rally, we could see changes to mortgage rates this afternoon.

Next week is fairly active in terms of economic releases and related events. There is a moderately important report being posted Monday morning that may slightly impact mortgage rates if it varies from forecasts. August’s Leading Economic Indicators will be released late Monday morning. It attempts to predict future economic activity over the next three to six months. It is expected to show a 0.7% increase, meaning that economic activity will likely rise fairly rapidly in the coming months. A smaller than expected reading would be considered good news for bonds and mortgage rates.

The rest of the week is also pretty busy. There is not an abundance of economic reports scheduled for release, but we do have another FOMC meeting and a couple of relevant Treasury auctions on the calendar that may affect mortgage pricing. 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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/17/2009

2009-09-17T09:19:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Thursday’s bond market has opened in positive territory, following suit with stocks. The stock markets are continuing yesterday’s positive tone, but to a much lesser scale. The Dow is currently up 23 points while the Nasdaq has gained 4 points. The bond market is currently up 8/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.

Neither of today’s economic releases are considered to be of high importance to the markets and have not had much influence on this morning’s mortgage rates. The Labor Department reported that 545,000 new claims for unemployment benefits were filed last week. This was lower than expected and can be considered negative news for bonds. However, the short period that this report tracks usually means it does not heavily influence trading or mortgage pricing.

August’s Housing Starts report was also posted this morning, showing an increase in starts of new homes from July to August. This data helps us measure housing sector strength, but is also not one of the more important reports we see each month. Its results also have had little impact on this morning’s mortgage rates.

There is no relevant data scheduled for release tomorrow, so look for the stock markets to influence bond trading. I would not be surprised to see bonds move in the same direction as stocks. Either way, we probably will have a relatively calm day in mortgage rates tomorrow unless something totally unexpected happens.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 09/16/2009

2009-09-16T09:20:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Wednesday’s bond market opened in positive territory following the release of this morning’s key inflation data that showed no significant surprises, but has since given back those gains. The stock markets are in positive ground with the Dow up 40 points and the Nasdaq up 11 points. The bond market is currently down 2/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

There were two reports posted this morning. The first was August’s Consumer Price Index (CPI) that revealed a 0.4% increase in the overall reading and a 0.1% rise in the core data. The increase in the overall reading was slightly higher than forecasts, but the more important core data reading that excludes volatile food and energy prices matched expectations. This means that prices at the consumer level of the economy rose modestly last month. That is good news for bond prices and mortgage rates because rapid increases in inflation makes long-term securities such as mortgage-related bonds less attractive to investors. The end result is almost always higher mortgage rates for borrowers.

The second report of the day was August’s Industrial Production data. It showed a 0.8% increase in production at U.S. factories, mines and utilities. This was slightly more than expected, meaning manufacturing activity was a little stronger than thought. However, the difference was not enough to cause much concern in the bond market.

Tomorrow’s data is much less important to the markets than the reports released the past two days. The Labor Department will give us last week’s unemployment filings. They are expected to announce that 555,000 new claims for unemployment benefits were filed last week. This would be a small increase from the previous week, but unless we see a wide variance between forecasts and the actual number, this data likely will have little impact on tomorrow’s mortgage pricing.

August’s Housing Starts report will also be posted early tomorrow morning. This report is also considered to be low-to-moderately important and will probably not have a significant impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand. It is expected to show little change in starts of new home construction between July and August.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com

Massachusetts Mortgage Rate Commentary 9/15/09

2009-09-15T09:27:00.000-07:00

Here's your Daily Commentary report compliments of Jeff Drew and Star Mortgage!

Tuesday’s bond market initially opened well in negative territory after this morning’s economic data revealed stronger than expected results but has since recovered a good portion of those losses. The stock markets are showing minor gains with the Dow up 4 points and the Nasdaq up 6 points. The bond market is currently down 3/32, but well above earlier levels. This will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

The Commerce Department announced this morning that sales at retail level establishments rose 2.7% last month, greatly exceeding analysts’ forecasts of a 1.9% increase. Even when volatile auto transactions are excluded, sales were well above forecasts. This means that consumers spent much more last month than many had thought. That is bad news for bonds and mortgage rates because consumer spending makes up two-thirds of the U.S. economy.

The second important piece of data posted this morning also did not due much good for bonds. The Labor Department reported that August’s Producer Price Index (PPI) rose 1.7%, more than twice the increase that was expected. The more important core data reading that excludes more volatile food and energy prices came in up 0.2% when it was expected to rise 0.1%. This means that prices at the producer level of the economy rose more rapidly than analysts had thought. That is also bad news for bonds because rising inflation erodes the value of a bond’s future fixed interest payments and makes them less appealing to investors. The result of rising inflation is usually higher mortgage rates. In addition, today’s PPI reading raises concern about tomorrow’s CPI report that is even more important than this morning’s release.

August’s Consumer Price Index (CPI) will be released early tomorrow morning. The CPI is one of the most important reports we see each and every month. It is the sister report of today’s PPI and is considered to be a key indicator of inflation at the consumer level of the economy. As with the PPI, there are two readings in the report- the overall index and the core data reading. Current forecasts are calling for a 0.3% increase in the overall reading and a 0.1% rise in the core data reading. A larger increase in the core data would likely lead to higher mortgage rates tomorrow morning.

Also scheduled for tomorrow morning is August’s Industrial Production data. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important but could help change mortgage rates if there is a significant difference between forecasts and the actual reading. Analysts are currently expecting to see a 0.7% increase in production. A higher level of output could lead to higher mortgage rates, while a weaker than expected figure would be considered good news for bonds and rates.

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...

©Mortgage Commentary 2009

* Please note that this information reflects just one opinion on the current market. If you are considering a purchase or refinance and have a mortgage rate and monthly payment you are comfortable with you may want to consider locking that mortgage rate. It is very difficult to predict the market in these very volatile times. Most lenders have a mortgage rate renegotiation policy. Contact me for details. Jeff@StarMortgage.com