Massachusetts Mortgage Rate Commentary week of 10/18

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

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

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

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

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

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

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