Hi, I hope you have a great St. Patrick’s Day!
Interest rates rose this week in response to better than expected economic and employment data. The prevailing sentiment now suggests that the Federal Reserve will refrain from lowering the Fed Fund rate until the latter half of this year. Next week has just a couple of economic reports scheduled for release and none of them are nearly as important as some of this week's data was. There is also another Treasury auction taking place midweek. However, the most important event by far will be the FOMC meeting that is adjourning Wednesday afternoon.*
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Last Updated: 3/15/24
Friday's bond market has opened in negative territory as yesterday's selling carries into the new day. Stocks are looking to end the week on a negative note also with the Dow down 120 points and the Nasdaq down 123 points. The bond market is currently down 6/32 (4.31%), which should push this morning's mortgage rates higher by approximately .250 of a discount point. If you saw an intraday increase yesterday, you should see a smaller bump this morning.
February's Industrial Production report was posted 9:15 AM ET this morning, revealing output at U.S. factories, mines and utilities rose modestly last month. The 0.1% increase was not a wide variance from the unchanged forecast and still points towards flat growth in the manufacturing sector. Accordingly, we are labeling it neutral for mortgage rates.
Closing this week's calendar was the University of Michigan's Index of Consumer Sentiment for March at 10:00 AM ET. They announced a reading of 76.5 that fell short of the expected 77.3 and down a little from February's 76.9. The decline means fewer surveyed consumers felt good about their own financial and employment situations than did last month. Because waning confidence usually translates into softer consumer spending numbers, this report is good news for bonds and mortgage rates. Unfortunately, the negative momentum from yesterday's data is too strong for this report to offset.
Next week has just a couple of economic reports scheduled for release and none of them are nearly as important as some of this week's data was. There is also another Treasury auction taking place midweek. However, the most important event by far will be the FOMC meeting that is adjourning Wednesday afternoon. Look for details on all of next week's activities in Sunday evening's weekly preview.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Float if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.*
*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
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Hello, happy Friday,
This week was eagerly awaited release of significant economic data—the first major batch since the February 13th Inflation report. The data this week turned out to be more favorable, but all eyes are now on next week’s data, which is even more critical. Interest rates concluded the week with a nice drop. Next week has several highly important economic reports scheduled for release in addition to a couple of Treasury auctions that are usually more influential than other sales. The list of economic reports includes two inflation readings (CPI and PPI) and key consumer spending data. The releases that are expected to heavily impact mortgage rates are set for Tuesday and Thursday. The week starts light with nothing scheduled for Monday that we need to be concerned about.*
Last Updated: 3/8/24
Friday's bond market has opened in positive territory following a flutter of employment-related headlines. Stocks are reacting favorably to the same data, pushing the Dow higher by 131 points and Nasdaq up 155 points. The bond market is currently up 5/32 (4.06%), which should improve this morning's mortgage rates by approximately .250 of a discount point if compared to Thursday's early pricing.
This morning's major economic release was February's Employment report at 8:30 AM ET. It gave us a boatload of mixed figures and revisions that are still being digested. Good news came in a sizable revision to January's blowout payroll number that surprised nearly everyone at that time. We were told last month that 353,000 new jobs were added to the economy in January, but that number has now been revised down to 229,000. The new January payroll number is still higher than the 175,000 that was expected when the report was posted early last month and would have also been considered bad news for bonds and mortgage rates, albeit with a much softer impact on both.
The report also showed more jobs were added last month than was expected. February's payroll number was up 275,000, well above the 195,000 that was expected. Despite the big revision to January, numbers of 229,000 and 275,000 in new jobs is sign of strength in the employment sector that is bad news for mortgage rates and makes it harder for the Fed to start lowering key short-term interest rates soon.
Today's good news wasn't isolated to just January's revised payroll number. Although, average earnings were revised slightly lower than previously announced for January on a monthly and year-over-year basis. Furthermore, February's average earnings rose only 0.1% when it was predicted to rise 0.3%. Higher earnings are an inflation concern because businesses need to raise the cost of their products or services to help cover the increase. It also puts more money into the pockets of workers, allowing them to spend more. Furthermore, inflationary pressures cause the Fed to keep key short-term rates higher for longer.
Another piece of good news came in the February unemployment rate that moved from 3.7% in January to 3.9% last month. This was the highest unemployment rate since January of 2022, hinting at possible weakness in the sector despite solid payroll gains.
Next week has several highly important economic reports scheduled for release in addition to a couple of Treasury auctions that are usually more influential than other sales. The list of economic reports includes two inflation readings (CPI and PPI) and key consumer spending data. The releases that are expected to heavily impact mortgage rates are set for Tuesday and Thursday. The week starts light with nothing scheduled for Monday that we need to be concerned about. Look for details on all of next week's activities in Sunday evening's weekly preview.
Hi, I hope you’re having a good week.
Earlier this week, favorable economic data emerged, suggesting a potential slowdown in inflation. As a result, interest rates concluded the week marginally lower. Next week has several economic reports scheduled that are expected to influence mortgage rates, including the almighty monthly Employment report. In addition to the data, there are also two congressional appearances for Fed Chairman Powell. He will be delivering the Fed's highly important semi-annual update on the economy and monetary policy Wednesday and Thursday. There are events scheduled each day except Monday.*
Last Updated: 3/1/24
Friday's bond market has opened in positive territory after this morning's economic data gave us favorable results. Stocks are mixed again with the Dow down 63 points and the Nasdaq up 67 points. The bond market is currently up 6/32 (4.22%), but bond losses late yesterday should keep this morning's mortgage rates close to Thursday's early pricing. If you saw an intraday increase Thursday, you should see a slight improvement in pricing this morning.
Both of this morning's relevant economic reports came at 10:00 AM ET. The Institute for Supply Management (ISM) gave us their February manufacturing index, announcing a 47.8 reading that was much lower than expected. Forecasts had it coming in at 49.5 after January's 49.1. The decline means fewer surveyed manufacturing executives felt business improved during the month than many had thought. As a sign of slower economic activity, this report was very good news for bonds and mortgage rates.
The University of Michigan's revised Index of Consumer Sentiment for February was the other report. They announced a reading of 76.9 after the preliminary reading two weeks ago showed 78.8. The lower reading is a sign that surveyed consumers didn't feel as good about their own financial situations than earlier in the month. Since waning confidence usually translates into softer consumer spending numbers, the decline is also good news for mortgage rates.
Next week has several economic reports scheduled that are expected to influence mortgage rates, including the almighty monthly Employment report. In addition to the data, there are also two congressional appearances for Fed Chairman Powell. He will be delivering the Fed's highly important semi-annual update on the economy and monetary policy Wednesday and Thursday. There are events scheduled each day except Monday. Look for details on all of next week's scheduled activities in Sunday evening's weekly preview.
Lock if my closing were taking place within 7 days... Float if my closing were taking place between 8 and 20 days... Float if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
Happy Friday,
Rates improved slightly this week. Next week has at least one relevant economic report scheduled for release each day, including Monday (January's New Home Sales in addition to a Treasury auction). The reports gain importance as the week progresses, meaning we should see the strongest moves in rates the middle or latter days. The batch of reports include the Fed's preferred inflation reading and the ISM manufacturing index, along with others. Since the first Friday of the month falls on the 1st, the monthly Employment report rolls to the following Friday.*
Last Updated: 2/23/24
Friday's bond market has opened in positive territory even though there is very little news to drive trading. Stocks are showing early gains with the Dow up 157 points and the Nasdaq up 36 points. The bond market is currently up 8/32 (4.29%), which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.
There is nothing scheduled today that is expected to influence bond trading or mortgage pricing. We should see a fairly calm day for rates, assuming something unexpected doesn't happen. Today's early stock strength doesn't seem to be having an impact on bonds, so we shouldn't need to be concerned if stocks extend their morning gains.
Next week has at least one relevant economic report scheduled for release each day, including Monday (January's New Home Sales in addition to a Treasury auction). The reports gain importance as the week progresses, meaning we should see the strongest moves in rates the middle or latter days. The batch of reports include the Fed's preferred inflation reading and the ISM manufacturing index, along with others. Since the first Friday of the month falls on the 1st, the monthly Employment report rolls to the following Friday. Look for details on all of next week's activities in Sunday evening's weekly preview.
Hello, TGIF,
Rates jumped this week due to unfavorable inflation reports. It now appears the predicted Fed rate cut in May is now in jeopardy. Next week has just a few things scheduled that we need to be concerned about. It begins with the markets closed Monday for the President's Day holiday. It appears we only need to be focused on Wednesday and Thursday since Tuesday and Friday don't show anything relevant. Wednesday's events will take place during afternoon hours (20-year Bond auction and FOMC minutes released). Thursday brings us the week's only monthly economic release and several Fed-member speaking engagements that may draw quite a bit of attention.*
Last Updated: 2/16/24
Friday's bond market has opened in negative territory following another round of unfavorable inflation news. Stocks are reacting to the same data with early losses of 120 points in the Dow and 127 points in the Nasdaq. The bond market is currently down 18/32 (4.30%), which should erase yesterday's improvement in rates, bringing them back to Wednesday's early pricing.
January's Producer Price Index (PPI) kicked-off this morning's batch of economic releases at 8:30 AM ET. It showed that inflation was stronger than expected at the producer level of the economy, following suit of Tuesday's Consumer Price Index (CPI). The overall reading rose 0.3% and the core data that excludes volatile food and energy costs spiked 0.5% when both were predicted to rise just 0.1%. There is much debate this morning whether both the CPI and PPI readings are just blips in a traditionally bumpy month or if inflation is indeed hotter than many had thought. The next couple of monthly readings will help give us that answer, but the bond market is certainly taking a cautious approach by assuming the latter. Accordingly, we are seeing noticeable selling in bonds this morning.
This morning's other early report was January's Housing Starts that revealed a sizable decline in new housing groundbreakings. The 14.8% decline in starts was much larger than forecasts, hinting at weakness in the new home portion of the housing sector. Newly issued permits also dropped more than expected, signaling future groundbreakings may be softer than thought. Starts of single-family homes that are more related to mortgage rates than multi-family home figures were lower than December by 4.8% and declined 22% year-over-year. These numbers make the report good news for mortgage rates, but unfortunately, the PPI is drawing much more attention and has a significantly stronger impact on the markets than this housing report.
The week's final piece of data came from the University of Michigan, who announced their preliminary Index of Consumer Sentiment for February stood at 79.6. This was a bit higher than January's 79.0, but wasn't far from expectations. Forecasts had the index at 79.3. The increase means more surveyed consumers felt better about their own financial situations than did last month. Since stronger confidence usually translates into more consumer spending, the increase is technically bad news for rates. However, it was a small variance in a moderately important report. The PPI is the driving force behind this morning's bond selling and upward move in rates.
Next week has just a few things scheduled that we need to be concerned about. It begins with the markets closed Monday for the President's Day holiday. It appears we only need to be focused on Wednesday and Thursday since Tuesday and Friday don't show anything relevant. Wednesday's events will take place during afternoon hours (20-year Bond auction and FOMC minutes released). Thursday brings us the week's only monthly economic release and several Fed-member speaking engagements that may draw quite a bit of attention. Look for details on these activities in Sunday evening's weekly preview.
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