Massachusetts Mortgage Rate Commentary 09/25/2009

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

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

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

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

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

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

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