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What Will Happen with Massachusetts Mortgage Rates this Week? 5/7th

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, it likely will be a moderately active week for mortgage rates. Besides the week’s economic news, look for the stock markets to be a major influence on trading. The most important day of the week is Friday with the PPI report on the agenda, but Wednesday’s 10-year Note auction could also heavily sway bond trading. It appears we will likely see the most movement in mortgage rates the latter part of the week unless the stock markets post sizable gains or losses the first part.

If I were considering financing/refinancing a home, I would….

LOCK if my closing was taking place within 7 days…

LOCK if my closing was taking place between 8 and 20 days…

FLOAT if my closing was taking place between 21 and 60 days…

FLOAT if my closing was taking place over 60 days from now…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

There are only three pieces of relevant economic data scheduled for release this week that may affect mortgage rates, in addition to two important Treasury auctions. The two most important reports will be posted Friday, meaning the markets will have to rely on factors other than economic news for direction most of the week. There is no relevant economic data due until Thursday, so expect the stock markets to be a big influence on bond trading and mortgage rates until then.

The Treasury will hold a 10-year Note sale Wednesday and a 30-year Bond sale Thursday. Results of the auctions will be posted at 1:00 PM ET each day. If they are met with a strong demand from investors, we could see bond prices rise enough during afternoon trading to cause downward revisions to mortgage rates. However, lackluster bidding in the sale, meaning longer-term securities are losing their appeal, could lead to higher mortgage pricing those afternoons.

March’s Goods and Services Trade Balance report will be released early Thursday morning. This report gives us the size of the U.S. trade deficit but likely will not have much of an impact on the bond market or mortgage pricing. It is expected to show a $49.9 billion trade deficit, but it is the least important of this week’s data and likely will have little influence on Thursday’s mortgage rates.

Friday has the remaining two reports. April’s Producer Price Index (PPI) is the first at 8:30 AM ET. It helps us measure inflationary pressures at the producer level of the economy. If this report reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond market rally. The overall index is expected to show no change, while the core data that excludes more volatile food and energy prices has been forecasted to rise 0.2%. A decline in the core data would be ideal for mortgage shoppers because inflation is the number one nemesis for long-term securities such as mortgage-related bonds.

The last report of the week is May’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend, which relates to consumer spending. If consumers are more confident of their own financial situations, they are more apt to make large purchases in the near future. This report usually has a moderate impact on the financial markets though, because it is not exactly factual data. It is expected to show a reading of 76.2, which would be a small decline from last month’s final reading. If it shows a large decline in consumer confidence, bond prices could rise and mortgage rates would move slightly lower because waning confidence means consumers are less apt to make a large purchase in the near future. That is assuming the PPI does not give us a significant surprise though. The PPI is much more important to the bond market than the sentiment index is, so look for it to be the biggest influence on Friday’s mortgage pricing.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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What Will Happen with Massachusetts Mortgage Rates this Week? 3/12th

By Brian Cav (A) on 03.12.12

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, look for Tuesday or Friday to be the most important day of the week due to the importance of those day’s reports and the FOMC meeting. Tomorrow will likely be the least active day for mortgage rates, but we could see plenty of movement in the markets and mortgage pricing several days this week. Therefore, please be attentive to the markets and 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…

FLOAT if my closing was taking place between 8 and 20 days…

FLOAT if my closing was taking place between 21 and 60 days…

FLOAT if my closing was taking place over 60 days from now…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

This week brings us the release of five relevant economic reports along with an FOMC meeting and two Treasury auctions for the markets to digest. A couple of the week’s reports are considered highly important, as is of course the FOMC meeting. There is nothing of relevance to mortgage rates being released or taking place tomorrow, so all of the week’s events are scheduled over four days.

The first thing on the calendar will come from the Commerce Department early Tuesday morning when they post February’s Retail Sales data. This data is extremely important to the financial markets because it measures consumer spending. Since consumer spending makes up over two-thirds of the U.S. economy, data that is related usually has a big impact on the markets. This month’s report is expected to show an increase in sales of approximately 1.0%. If it reveals a larger than expected increase, the bond market will likely fall and mortgage rates will move higher as it would indicate a stronger level of economic growth than many had thought. If it reveals a much smaller than expected increase, I expect to see bond prices rise and mortgage rates improve Tuesday morning.

Also Tuesday is the Federal Open Market Committee (FOMC) meeting. This is a single-day meeting that will adjourn at 2:15 PM ET. It is widely believed that the Fed will make no change to key short-term interest rates at this meeting, but the post-meeting statement will be watched closely for any change in their feelings about the economy or any other moves they may make, such as QE3. Generally speaking, the bond market wants to hear that inflation is not an immediate concern and that key rates will be kept at current levels for a long time. An announcement of another round of Quantitative Easing to help keep long-term interest rates low could fuel a bond rally.

There are two Treasury auctions this week that could potentially affect mortgage rates. The first is the 10-year Treasury Note auction Tuesday and the 30-year bond sale will be held Wednesday. Results of both sales will be posted at 1:00 PM ET on the sale days. If investor demand was high, we may see bonds rally during afternoon trading as it would indicate that investors still have an appetite for longer-term securities. However, weak demand in the sale could lead to selling and an increase in mortgage rates.

Wednesday also has a speaking engagement by Fed Chairman Bernanke. He will be speaking to the Independent Community Bankers Association in Nashville at 9:00 AM ET. I don’t believe he will say anything that will be a market mover, especially the morning after the FOMC meeting. However, market participants always watch his words closely so any surprises will have an impact on the markets and possibly mortgage pricing.

The Labor Department will post February’s Producer Price Index (PPI) early Thursday morning. This important index measures inflationary pressures at the producer level of the economy. There are two portions of the index- the overall reading and the core data. The core data is more important and watched more closely because it excludes more volatile food and energy (including gasoline) prices. If the index shows a large increase, inflation concerns will rise, making long-term investments such as mortgage-related bonds less attractive to investors. This would lead to higher mortgage rates Thursday morning. Current forecasts are calling for a 0.5% increase in the overall reading and a 0.2% increase in the core data.

Friday has the remaining three economic reports scheduled. February’s Consumer Price Index (CPI) will be released early Friday morning, which measures inflationary pressures at the very important consumer level of the economy. Its results can definitely have a huge impact on the financial markets, especially long-term securities such as mortgage-related bonds. It is expected to show a 0.4% increase in the overall index and a 0.2% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall Friday.

Friday’s next report will come mid-morning when February’s Industrial Production report is posted. This report measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.5% increase from January’s level. A decline would be considered extremely favorable news for bonds and mortgage rates because it would indicate manufacturing sector weakness and a broader economic recovery is more difficult if manufacturing activity is slipping.

The week’s final piece of data is the University of Michigan’s Index of Consumer Sentiment for March just before 10:00 AM ET Friday. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and economic growth. A drop in confidence will probably hurt the stock markets and boost bond prices, leading to lower mortgage rates, assuming the CPI matches forecasts. Bad news for bonds and mortgage rates would be rising confidence. It is expected to show a reading of 76.0, which would be an increase from February’s final reading 75.3.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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What Will Happen with Massachusetts Mortgage Rates this Week? 3/5th

By Brian Cav (A) on 03.05.12

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, look for a fairly active week in the markets and mortgage rates. I suspect there will be some optimism leading up to Friday’s Employment report, which could lead to support in stocks and pressure in bonds as we get closer to Friday. That day is undoubtedly the biggest of the week and we can label Tuesday as the least important. Please be careful this week if still floating an interest rate, especially the latter part of the week.

If I were considering financing/refinancing a home, I would….

LOCK if my closing was taking place within 7 days…

FLOAT if my closing was taking place between 8 and 20 days…

FLOAT if my closing was taking place between 21 and 60 days…

FLOAT if my closing was taking place over 60 days from now…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

This week has four government-compiled economic reports for the markets to digest. Only one is considered to be highly important, but it is a big one. The rest of the reports are moderately important to the markets, meaning they have the potential to affect mortgage rates but usually don’t cause a noticeable change. The most important data comes the matter part of the week, but sizable moves in stocks can impact bond trading and mortgage rates any day.

The week’s first data comes tomorrow with the release of January’s Factory Orders during late morning hours, which will give us a measurement of manufacturing sector strength. This data is similar to last week’s Durable Goods, except this report covers orders for both durable and non-durable goods. Current forecasts are calling for a drop in new orders of approximately 1.9%. A larger than expected drop would be good news for the bond market and could lead to an improvement in mortgage rates since it would point towards economic weakness.

There is nothing of relevance scheduled for Tuesday, but Wednesday has a couple of releases that are considered moderately important. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed an annual growth rate of 0.7% in worker output. Analysts are expecting to see an upward revision of 0.2% to last month’s initial reading. Employee productivity is watched fairly closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns. However, since this data is quite aged now, it likely will have little impact on Wednesday’s mortgage rates unless it shows a significant change.

Wednesday also has a couple of private sector employment-related reports due to be posted. The biggest one comes from payroll processor ADP who will announce their change in payrolls processed last month. Since it is not a government agency report, it isn’t considered to be highly important, but as with any employment-related data, it does draw some attention. This is especially true for this report because it is posted just before monthly employment figures are released by the Labor Department.

Thursday has nothing to be concerned with but Friday is a different story. The biggest news of the week comes early Friday morning when one of the single most important monthly reports we see will be posted. The Labor Department will release February’s Employment report at 8:30 AM ET Friday. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a much smaller increase in payrolls than expected and little or no increase in earnings. Current forecasts are calling for no change in the unemployment rate of 8.3% and approximately 207,000 new jobs added to the economy. Stronger than expected readings will likely fuel a stock market rally and selling bonds that would cause a sizable upward revision to mortgage rates. On the other hand, disappointing numbers would raise concerns about the economy’s ability to continue to grow at its current pace that would have an opposite impact on the markets and mortgage pricing.

January’s Goods and Services Trade Balance report will also be released early Friday morning, but it will likely draw little interest from market participants. It will give us the size of the U.S. trade deficit, but often does not directly impact mortgage rates and is the week’s least important piece of news. Current forecasts are calling for a $48.1 billion trade deficit during January, but we will need to see a large variance from this estimate and little surprise in the employment figures for this news to influence bond trading enough to affect mortgage pricing. It is highly likely that this report will be a non-factor in Friday’s pricing.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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What Will Happen with Massachusetts Mortgage Rates this Week? 2/13th

By Brian Cav (A) on 02.13.12

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, the most important day of the week will likely be Tuesday or Friday with the Retail Sales and CPI reports released. There is nothing of concern scheduled for tomorrow, so we can label it as the best candidate for the calmest day unless current events in Greece have an impact on the markets. In other words, be prepared for an active week in the markets and mortgage 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…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

There are six economic reports worth watching this week that are likely to affect mortgage rates in addition to the minutes from the last FOMC meeting. Some of the economic reports are very important to the financial and mortgage markets, meaning it will probably be another active week for mortgage rates.

There is no relevant economic data scheduled for tomorrow, so look for the stock markets to be the biggest influence on bond trading and mortgage rates. The Greek Parliament is debating the requirements for their bailout today, so any decision there will likely help drive trading and mortgage prices tomorrow morning.

The week’s first release is one of the highly important ones when the Commerce Department posts January’s Retail Sales data. This report is very important to the financial markets because it measures consumer spending. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched quite closely. If Tuesday’s report reveals weaker than expected sales, the bond market should thrive and mortgage rates will fall since it would be a sign that the economy is not as strong as many had thought. However, a stronger reading than the 0.8% increase that is expected could lead to higher mortgage rates.

January’s Industrial Production data will be released mid-morning Wednesday. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities and can have a moderate impact on the financial markets. Analysts are expecting to see a 0.6% increase in production from December to January. A smaller than expected rise in output would be good news and should push bond prices higher, lowering mortgage rates Wednesday.

Wednesday also brings us the release of the FOMC minutes. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. These minutes may indicate if there is a consensus amongst Fed members or if there is disagreement about their actions or inactions. This release may lead to afternoon volatility Wednesday, or it may be a non-factor. However, the minutes do carry the potential to influence mortgage rates so they should be watched.

January’s Housing Starts will be posted early Thursday morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless the results vary greatly from forecasts. Current forecasts are calling for an increase in starts of new housing.

The Labor Department will post their Producer Price Index (PPI) for January early Thursday morning also. It measures inflationary pressures at the producer level of the economy and is considered to be one the two key measures of inflation we see each month. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. It is expected to show an increase of 0.3% in the overall reading and a 0.1% rise in the core data. Good news for bonds would be a decline in both readings, particularly the core data as it would ease concerns about inflation that make long-term securities less attractive to investors.

The sister report to Thursday’s PPI will be posted early Friday morning when January’s Consumer Price Index (CPI) is released. The difference between the two is that the CPI measures inflationary pressures at the more important consumer level of the economy. With exception to maybe the Employment report, the CPI is the single most important report that we see each month. Its results can have a huge impact on the financial markets, especially on long-term securities such as mortgage-related bonds. It is expected to show a 0.3% increase in the overall index and a 0.2% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall.

Also Friday morning will be the release of the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 0.5% increase, meaning that economic activity may rise in the near future. A smaller than expected rise would be good news for the bond market and mortgage rates, but the CPI draws much more attention than the LEI. Therefore, for this report to influence mortgage pricing, it will have to show a sizable variance from forecasts and the CPI will have to match estimates.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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What Will Happen with Massachusetts Mortgage Rates this Week? 2/6th

By Brian Cav (A) on 02.06.12

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, despite being a fairly light week in terms of economic releases and relate events, it is still relatively crucial for the mortgage market. We saw the yield on the benchmark 10-year Treasury Note spike higher Friday as a result of the stronger than expected employment data. Stocks rallied as a result of that data, extending the 2012 stock rally that has pushed the Dow up over 5% and the Nasdaq up 11% year-to-date. Both indexes are at their highest levels since May 2008 and December 2000 respectively. This has me believing we are due to see a pullback in stocks fairly soon. If/when this happens, we should see funds shift back into bonds for safety, leading to lower mortgage rates. Keep in mind that this is more or less just speculation, but I am expecting to move to a less conservative approach regarding short-term mortgage rates in the near 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…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

There are only two pieces of monthly economic data scheduled for release this week. Neither of them is considered to be highly important, so we don’t have much to pin our hopes on or to be concerned with this week. There are two Treasury auctions on the calendar that may influence mortgage rates the middle part of the week and the second part of Fed Chairman Bernanke’s testimony to Congress, but no important economic data.

Nothing of concern is due tomorrow, so look for the stock markets and news from Europe- particularly Greece, to drive the markets tomorrow. Fed Chairman Bernanke will speak to the Senate Budget Committee at 10:00 AM Tuesday. I don’t expect him to say anything different than he said last week to the House Budget Committee, but the Q&A portion of his appearance could lead to something new. It is worth watching, but it will probably not lead to a noticeable change in the markets or mortgage rates.

The two important Treasury auctions come Wednesday 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 a better indication of demand of mortgage-related securities. 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 likely result in upward afternoon revisions to mortgage rates.

With little monthly and no quarterly economic reports being posted, Thursday’s weekly release of unemployment figures may end up moving the markets and mortgage rates more than it traditionally does. The Labor Department is expected to announce that 370,000 new claims for unemployment benefits were filed last week, rising slightly from the previous week’s total. The higher the number of new claims for benefits, the better the news for the bond market and mortgage pricing as it would indicate weakness in the employment sector.

The first monthly report comes early Friday morning when December’s Goods and Services Trade Balance data will be posted. This report measures the U.S. trade deficit and can affect the value of the U.S. dollar versus other currencies, but it usually does not cause enough movement in bond prices to affect mortgage rates. It is expected to show a $48.2 billion trade deficit.

February’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment will be released late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows an increase in consumer confidence, the stock markets may move higher and bond prices could fall. It is currently expected to come in at 74.0, down from January’s final reading of 75.0. That would indicate consumers were less optimistic about their own financial situations than last month and are less likely to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, this would be considered good news for bonds and mortgage pricing.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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What Will Happen with Massachusetts Mortgage Rates this Week? 1/30th

By Brian Cav (A) on 01.30.12

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, look for Wednesday or Friday to be the biggest day for mortgage rates. Friday’s Employment report is the most important piece of data, but Wednesday’s ISM Index draws a lot of attention also. We could also see movement in rates tomorrow morning following the activity at the end of last week. If we get weaker than expected results from the ISM and Employment reports, we should see rates close the week lower than last Monday’s opening levels. If the data shows stronger than expected results, we may see mortgage rates move higher for the week. With some very important data being posted over the next five days, I strongly recommend keeping fairly constant 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…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

This week is extremely busy in terms of economic data scheduled for release and will likely be another active week for mortgage rates. There are seven economic releases scheduled for the week, some of which are known to be extremely influential on the financial and mortgage markets. All seven of these reports are considered to be of moderate or high importance, meaning we should see quite a bit of movement in mortgage rates this week.

The first report of the week is January’s Personal Income and Outlays data tomorrow morning, which gives us an indication of consumer ability to spend and current spending habits. This is important because consumer spending makes up two-thirds of the U.S. economy. Current forecasts call for an increase in income of 0.4% while spending is expected to rise 0.1%. Larger increases would be good news for the stock markets and could hurt bond prices, driving mortgage rates higher tomorrow. Smaller than expected increases would be considered good news for mortgage rates.

Tuesday has two reports scheduled with the first being the 4th Quarter Employment Cost Index (ECI). It measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. If wages are rising, consumers have more money to spend. The report is considered moderately important and usually has more of an effect on the bond market than the stock markets. Current forecasts are showing an increase of 0.4%. A lower than expected reading would be favorable to bonds and mortgage rates Tuesday.

January’s Consumer Confidence Index (CCI) will be posted late Tuesday morning. This report is considered to be of moderate to high importance to the bond market and therefore can move mortgage rates. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Due to the significance of consumer spending, market participants are very attentive to related data. Analysts are expecting to see an increase from December’s reading, indicating a higher level of consumer confidence. A reading much smaller than the expected 67.0 would be ideal for the bond market and mortgage rates.

Wednesday’s big report comes late morning when the Institute of Supply Management (ISM) releases their manufacturing index for January. This index tracks manufacturer sentiment by rating surveyed trade executives’ opinions of business conditions. It is usually the first economic data released each month and is one of this week’s very important reports. Current forecasts are calling for a reading in the neighborhood of 54.7, which would be an increase from December’s reading. The lower the reading, the better the news for the bond market and mortgage rates because weak sentiment indicates a slowing manufacturing sector.

Wednesday also has a couple of private sector employment-related reports due to be released. They normally don’t draw much attention unless they show a significant surprise. I still not too concerned about their results, but the potential does exist that a significant variance in the numbers could lead to changes in mortgage pricing.

Employee Productivity and Costs data for the 4th quarter will be released early Thursday morning. It can cause some movement in the bond market, but should have a minimal impact on mortgage pricing. If it varies greatly from analysts’ forecasts of a 0.6% increase, we may see some movement in mortgage rates. However, the markets will be much more interested in Friday’s data, so a slight difference shouldn’t cause a noticeable move in rates.

Friday’s data is by far the most important of the week. The Labor Department will post January’s Employment data early Friday morning, giving us the U.S. unemployment rate and the number of jobs added or lost during the month among other related statistics. Analysts are expecting to see the unemployment rate remain unchanged at 8.5% and that approximately 170,000 new jobs were added to the economy. An increase in unemployment and a much smaller increase in payrolls would be great news for the bond market. It would probably create a bond rally, leading to lower mortgage rates Friday morning. However, if Friday’s report reveals stronger than expected results, we can expect to see mortgage rates move higher.

Late Friday morning, December’s Factory Orders data will be posted. It is similar to last week’s Durable Goods Orders release in giving us a measurement of manufacturing sector strength, but this data includes new orders for both durable and non-durable goods. It is one of the less important reports of the week, but can influence mortgage pricing if it varies greatly from forecasts. Analysts are expecting a 1.6% increase in new orders, hinting at manufacturing sector strength. However, the Employment report will be the focus of the markets.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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Posted in Market Update, Today's Market | Leave a response

What Will Happen with Massachusetts Mortgage Rates this Week? 1/23rd

By BrianCav on 01.23.12

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, look for Wednesday or Friday to be the biggest days for mortgage rates. Friday’s GDP is the single most important piece of data this week, but we may see quite a bit of movement in rates Wednesday morning and again in the afternoon following the Fed’s time in the spotlight. I would be quite surprised if we did not see a very active week in rates, including intra-day revisions on multiple days. I strongly recommend that constant contact is maintained with your mortgage professional this week 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…

FLOAT if my closing was taking place between 8 and 20 days…

FLOAT if my closing was taking place between 21 and 60 days…

FLOAT if my closing was taking place over 60 days from now…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

This week is quite busy in terms of economic data and other events that are relevant to mortgage rates and is likely to be an active one for mortgage rates. There are five economic releases scheduled for the week in addition to the first Federal Open Market Committee (FOMC) meeting of the year that will include a press conference with Chairman Bernanke, two potentially influential Treasury auctions and the President’s State of the Union address. All but one of the five economic reports are considered to be of moderate or high importance, meaning we should see quite a bit of movement in mortgage rates this week.

There is nothing of relevance scheduled for tomorrow or during trading hours Tuesday, thus we can expect the stock markets and any potential news from overseas to drive bond trading and mortgage pricing. If the major stock indexes post strong gains, bonds will probably falter, leading to higher mortgage rates the early part of the week. President Obama will make his State of the Union address at 9:00 PM ET Tuesday evening. Topics and parts of the speech will be leaked prior, which may influence the markets during regular hours the first two days of the week. The biggest reaction to his words will come Wednesday morning.

Wednesday also has no relevant economic data scheduled for release, although it does have this year’s first FOMC meeting results. The meeting will begin Tuesday and adjourn at 12:30 PM ET Wednesday. It is expected to yield no change to short-term interest rates, but as is often the case, traders will be looking for any indication of the Fed’s next move and when they may make it. I believe that there is little chance of indicating a possible rate hike in the near future, but any hints of a change in theories or timetable by the Fed will cause afternoon volatility in the financial and mortgage markets. The meeting will adjourn early instead of the regular 2:15 PM time because it is one of four meetings this year that will be followed by a press conference hosted by Fed Chairman Bernanke.

Thursday morning brings us the release of three of the week’s economic reports. The first is December’s Durable Goods Orders at 8:30 AM ET. This data helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years, also known as big-ticket items. The data often is quite volatile from month- to-month, but is currently expected to show an increase in orders of approximately 2.0%. A smaller than expected increase would be considered good news for bonds and mortgage rates, but a slight variance likely will have little impact on Thursday’s mortgage pricing.

Next is December’s New Home Sales report at 10:00 AM ET. It is considered to be the sister release to last week’s Existing Home Sales, giving us a small snapshot of housing sector strength. It tracks a much smaller portion of home sales than last week’s report did and is forecasted to show an increase in sales of newly constructed homes. However, this data is not important enough to heavily influence mortgage pricing unless it varies greatly from forecasts.

The third report of the day is December’s Leading Economic Indicators (LEI) at 10:00 AM ET. The LEI attempts to measure economic activity over the next three to six months. It is considered to be of moderate importance to the bond and mortgage markets. Analysts are currently expecting the Conference Board to post a 0.7% increase, meaning that economic growth over the next few months will likely rise fairly quickly. Generally speaking, this would be bad news for the bond market because a strengthening economy makes long-term securities such as mortgage bonds less attractive to investors.

The remaining two economic reports will be released Friday morning, one of which is arguably the single most important reports that we see regularly. That would be the initial reading of the 4th Quarter Gross Domestic Product (GDP) early Friday morning. This data is so important because it is considered to be the best measurement of economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. There are three readings to each quarter’s activity, each released approximately one month apart. The first reading, which usually carries the most significance, is expected to be an increase of 3.1%. A noticeably weaker reading would be great news for the bond market, questioning the pace of the economic recovery. That would likely fuel stock selling and a rally in bonds that would push mortgage rates lower Friday morning. However, a stronger than expected reading should fuel bond selling and higher mortgage rates.

The last report of the week is the revised reading to the University of Michigan’s Index of Consumer Sentiment. This index is a measurement of consumer confidence that is thought to indicate consumer willingness to spend. If confidence is rising, consumers are more apt 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. I don’t see this data having much of an impact on the markets or mortgage rates due to the importance of the GDP reading.

And if we didn’t have enough to watch already, there are two relatively important Treasury auctions for the markets to digest. The Fed will auction 5-year and 7-year Treasury Notes Wednesday and Thursday, respectively. If they are met with a strong demand from investors, the broader bond market may rally during afternoon hours those days. If the sales draw a lackluster interest, they could lead to bond selling and higher mortgage rates during afternoon hours those days.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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What Will Happen with Massachusetts Mortgage Rates this Week? 1/9th

By BrianCav on 01.09.12

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, Thursday will likely turn out to be the most important day of the week due to the Retail Sales report but Wednesday’s Beige Book and 10-year Note auction may also cause some volatility in the markets. However, any day can become active if the stock markets show significant gains or losses. Therefore, I strongly recommend maintaining contact with your mortgage professional this week, especially the latter part 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…

FLOAT if my closing was taking place between 8 and 20 days…

FLOAT if my closing was taking place between 21 and 60 days…

FLOAT if my closing was taking place over 60 days from now…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

This week brings us the release of four pieces of economic data to digest along with two important Treasury auctions. None of them are scheduled for tomorrow or Tuesday, meaning all of the week’s events will come over two and a half days. Until we get to the week’s first relevant event Wednesday afternoon, look for the stock markets to be a major contributor to movements in bond prices and mortgage rates. Stock strength will likely equate into bond weakness and higher mortgage rates, and vice versa if stocks fall.

The first relevant report of the week is the Federal Reserve’s Beige Book report at 2:00 PM ET Wednesday. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises, particularly regarding inflation, unemployment or future hiring.

The two important Treasury auctions will be held Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important of the two as it will give us a better indication for demand of mortgage-related securities. 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.

Thursday has December’s Retail Sales data scheduled, which is the most important report of the week and one of the more watched releases we get each month. This Commerce Department report 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 watched closely. Current forecasts are calling for an increase in sales of approximately 0.4%. A smaller than expected increase in sales would indicate consumers did not spend as much as thought over the holiday season, helping to prevent rapid economic growth. That would be considered good news for the bond market and mortgage rates.

The last two reports will be posted Friday morning. The first is November’s Goods and Services Trade Balance at 8:30 AM ET. It the week’s least important data and probably will not influence mortgage rates. It measures the size of the U.S. trade deficit and is expected to show a $44.3 billion trade deficit. This data usually does not directly affect mortgage rates, but it does influence the value of the U.S. dollar versus other currencies. A stronger dollar makes U.S. securities more attractive to international investors because they are worth more when sold and converted to the investor’s domestic currency. But unless we see a significant variance from forecasts, I don’t believe this data will lead to a change in mortgage rates Friday.

The final report of the week is January’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and often has enough of an impact on the financial markets to slightly change mortgage rates. Good news would be if it shows a reading weaker than the 75.0 that is expected. December’s final reading was 71.0, indicating that consumer sentiment likely rose this month. The bond market prefers to see waning confidence because if consumers are less optimistic about their own financial situations, they are less apt to make large purchases in the near future. Slowing spending levels limits fuel for economic growth, making long-term securities such as mortgage bonds more attractive to investors.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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What Will Happen with Massachusetts Mortgage Rates this Week? 12/19th

By BrianCav on 12.19.11

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

Overall, I am expecting to see some movement in the markets and mortgage rates, especially if we get some surprising results from the week’s data or news about Europe’s financial crisis. Despite the holiday season, we need to keep a cautious approach toward rates because we are likely to see very thin trading (light volume) as a result of many traders keeping short hours or home for the holiday altogether. This means that firms that trade 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.

The least important day for mortgage rates will likely be tomorrow unless something drastic happens overnight. We will probably see the most movement in rates Friday, but Thursday’s economic data can also move mortgage pricing noticeably. With the Christmas holiday next weekend, it is being observed next Monday. The bond market will close early this Friday afternoon ahead of the holiday and will reopen next Tuesday morning. Accordingly, proceed cautiously this week if still floating an interest rate and closing by the end of the year. proceed cautiously this week if still floating an interest rate and closing by the end of the year.

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…

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed

This holiday-shortened trading week brings us the release of eight monthly or quarterly economic reports in addition to two semi-relevant Treasury auctions. None of the releases are considered to be highly important to the markets and mortgage rates, but several of them do have the potential to cause some movement in rates. The more important news comes later in the week. Therefore, we may see more movement in mortgage pricing as the week progresses.

There is nothing of relevance scheduled for release tomorrow. This means we can look towards the stock markets for guidance on bond and mortgage rate direction. The Europe debt crisis will likely be in the headlines this week as leaders move to avoid downgrades by credit rating agencies that would be equivalent to adding gasoline to the fire. If the actions taken overseas are strong enough to calm investor fears here, stocks may bode well for the week, making it difficult for bonds to rally and push mortgage rates lower. On the other hand, if it becomes evident that the downgrades to their debt are unavoidable, fears about the impact they would have on the global economy will probably fuel stock selling and bond buying here. The latter would be good news for mortgage rates.

Tuesday’s only data is November’s Housing Starts, but it is the week’s least important data. I don’t see it causing much movement in mortgage rates unless it shows a huge variance from expectations. It is expected to show little change in construction starts of new homes, hinting at a flat housing sector last month. Generally speaking, an increase in new starts would be bad news for bonds and mortgage pricing, but unless there is a significant surprise it will likely have little impact on Tuesday’s mortgage rates.

November’s Existing Home Sales figures will be posted late Wednesday morning. This release will come from the National Association of Realtors while its sister release, Friday’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 is considered to be of high importance. And both of the reports are expected to show increases in sales, indicating housing sector growth. Weaker than expected readings would be considered positive for bonds and mortgage rates because they hint at a still weakening housing market. But unless the actual readings vary greatly from forecasts, the results will probably have little or no impact on mortgage rates.

Thursday brings us the release of three reports, with the first being the final revision to the 3rd Quarter Gross Domestic Product (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 2.0% annual pace during the quarter and this month’s revision is expected to show no change. A revision higher than the 2.0% rate that is expected 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 Thursday.

The second report of the day comes just before 10:00 AM ET when the revised University of Michigan Index of Consumer Sentiment for December is posted. Current forecasts are calling for a small upward revision from the preliminary reading of 67.7. This is fairly important because rising consumer confidence indicates that consumers may be more apt to make large purchases in the near future. A reading above the 68.0 that is forecasted would be negative for bonds and mortgage rates.

The Conference Board will release their Leading Economic Indicators (LEI) for the month of November. 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 small increase in activity, meaning that it predicts a slowly 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 0.3% increase from October’s reading. The lower the reading, the better the news for bonds and mortgage pricing. If it shows a smaller increase, the bond market may move slightly higher, leading to a minor improvement in rates.

The final two economic reports of the week come Friday morning along with November’s New Home sales. The first is November’s Personal Income and Outlays data. It will give us an important measurement of consumer ability to spend and current spending habits. Since consumer spending makes up two-thirds of the U.S. economy, any related data usually has a noticeable impact on the financial markets and mortgage rates. Current forecasts are calling for a 0.2% increase in income and a 0.3% increase in spending. If this report reveals weaker than expected readings, we should see the bond market improve and mortgage rates drop slightly Friday morning.

November’s Durable Goods Orders is the last report, also being posted early Friday 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 2.0% rise in new orders. A smaller increase 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 jump in orders could lead to mortgage rates moving higher early Friday morning. This data is known to be quite volatile from month-to-month, so it is not unusual to see large headline numbers on this report.

This week also has Treasury auctions scheduled the first three days. The two that are most likely to influence mortgage rates are Tuesday’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.

Are you a possible Massachusetts First Time Homebuyer?
Do you have a Real Estate client inquiring about current Mortgage Rates?
Do you have any Refinancing questions?
Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
Have your Real Estate clients been Pre Approved?

bc@smarterborrowing.com 617.771.5021

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Federal Reserve’s December 2011 Statement

By BrianCav on 12.13.11

Inquire within for current Mortgage Rates or Guidelines bc@SmarterBorrowing.com 617.771.5021

TUESDAY AFTERNOON UPDATE

Today’s FOMC meeting has adjourned with no significant surprises from the Fed. As expected, they left key short-term interest rates alone. The post-meeting statement indicated that they acknowledged that the employment sector has strengthened slightly since the last meeting and that the economy is growing “moderately.” But they also warned that there are still significant hurdles ahead, particularly from overseas. They said “strains in global financial markets continue to pose significant downside risks” to our economy. That was not new news, but hearing it again caused jitters in stocks after it was read.

The stock markets responded negatively to the statement, erasing this morning’s gains. The Dow is currently down 29 points while the Nasdaq has lost 20 points. The Dow was well into positive ground before the statement was released this afternoon. But it wasn’t necessarily just the renewed concerns about what impact the global financial crisis will have on our economy that spooked the markets. A good part of the selling is a result of what was not said by the Fed. Many traders were expecting to see Mr. Bernanke and friends take some type of step towards boosting the economy during this meeting. The most common theory had them initiating another round of debt purchases, or quantitative easing (QE3). The lack of that move and no progress on improving communication with the public led many traders to respond negatively during afternoon trading.

The bond market benefited from the about-face in stocks and a strong 10-year Treasury Note auction that took place earlier today. After results of the auction showed strong investor demand for the securities, bonds erased morning losses and moved into positive territory. As stocks moved into negative ground after the FOMC meeting, bonds extended their rally. The bond market is currently up 14/32, which will likely cause many lenders to improve rates from this morning’s level by approximately .125 – .250 of a discount point.

The Commerce Department reported early this morning that retail level sales rose only 0.2% last month. This was well below forecast of a 0.6% increase. Even if more volatile auto sales are excluded, we saw figures that were well below expectations. This indicates that consumers were spending last much like analysts had expected, hinting at slower than forecasted economic growth. Since it points towards weaker economic conditions, today’s news was favorable for bonds and mortgage rates. You would not have known that by this morning’s early bond losses, but the market has moved into positive ground during afternoon trading.

There is no relevant economic data scheduled for release tomorrow, so look for stocks to drive bond trading during morning hours. The 30-year Bond auction will take place and with today’s strong 10-year Note sale, we have reason to be optimistic about tomorrow’s sale. If it is met with similar demand than today’s was, we could see bonds improve tomorrow afternoon and possible have another downward revision to mortgage pricing. Results of the sale will be posted at 1:00 PM ET, so any reaction to the auction results will come during afternoon hours.

bc@smarterborrowing.com 617.771.5021

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