Mortgage Rate Updates 4-30-09

Thursday's bond market has opened in negative territory following another round of stock gains. The stock markets are continuing yesterday's rally with the Dow up 102 points and the Nasdaq up 37 points. The bond market is currently down 12/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point over yesterday's morning rates.

The Labor Department gave us today's first economic report with the release of the 1st Quarter Employment Cost Index (ECI). It tracks employer costs for wages and benefits, showing a 0.3% increase during the quarter. This was lower than forecasts, which is good news for bonds, and was the lowest increase on record. However, the data seems to be ignored by traders this morning.

March's Personal Income & Outlays also showed weaker than expected results. It revealed a 0.3% decline in income and a 0.2% drop in spending. Both of these readings were a little weaker than analysts h ad expected, so the data can be considered favorable to bonds also. But this morning's stock gains have made it difficult for bonds to move higher.

The Labor Department also said that 631,000 new claims for unemployment benefits were filed last week. This was lower than forecasts, but since this data tracks only a week's worth of claims, it has had little impact on this morning's trading or mortgage rates.

There are three reports scheduled for release late tomorrow morning. The first is the University of Michigan's update to their Index of Consumer Sentiment for April. This report gives us an indication of consumer sentiment. I don't expect it to have a significant impact on bonds and mortgage pricing unless it varies greatly from forecasts. Current forecasts are calling for a small downward revision to 61.5.





The second is March's Factory Orders data at 10:00AM. This is a moderately important release because it measures manufacturing sector strength. It is similar to last week's Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report usually has more of an impact on the financial markets than the Factory Orders report does. Still, a larger decline than the 0.7% that is expected could push mortgage rates slightly lower, while a smaller drop will likely lead to higher rates. But, the third report of the morning is the most important and will likely be the biggest influence on bond trading tomorrow. 

The Institute for Supply Management (ISM) will post their manufacturing index late tomorrow morning also. This is one of the first important economic reports released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that mo re surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. But, if we see a drop from last month's reading of 36.3, the bond market should thrive and mortgage rates will probably fall. It is expected to show a reading of 38.0.

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Mortgage Rate Updates 4-29-09 Part 2

This week's FOMC meeting adjourned with no change to key short-term interest rates. The post meeting statement indicated that the economy was still weakening, but at a slower rate than their last update. They also said that inflation ?remained subdued?, which is good news for bonds. There was little reference to the Fed's next move regarding buying Treasury debt.

However, the slowing contraction in the economy led to stock gains that caused bonds to sell. The Dow ended the day higher 168 points while the Nasdaq closed up 38 points. The major stock indexes actually spiked higher before falling before closing. At one point the Dow was up 240 points while the Nasdaq reached a high of up 53 points. The bond market closed down 25/32, which could lead to upward revisions to mortgage rates. However, many lenders may opt to wait until tomorrow's data is posted before reflecting that change.

This morn ing's major economic news was the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. Today's release revealed that activity fell at an annual rate of 6.1% during the first three months of the year. This was much weaker than the 4.7% decline that was expected and shows that the economy was slowing quicker than thought. This is good news for bonds and mortgage rates because slowing economic activity eases inflation concerns and makes bonds and mortgage related securities more attractive to investors.

Tomorrow brings us the release of two important reports in addition to weekly unemployment figures. The first is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we ma y see wage inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.5%. 

March's Personal Income & Outlays is the second of two reports due to be posted tomorrow morning. This data helps us measure consumers' ability to spend and current spending habits, which is important to the mortgage market due to the influence that consumer spending related information has on the financial markets. If a consumer's income is rising, they are more likely to make additional purchases. This raises the likelihood of increased economic activity and has a negative impact on the bond market and mortgage rates. Current forecasts are calling for a 0.2% decline in income and a 0.1% drop in spending. The lower the reading, the better the news for bonds for both portions of the report.

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Mortgage Rate Updates 4-29-09

Wednesday's bond market has opened in positive territory after this morning's following news of a much weaker than expected economy during the 1st quarter of the year. The stock markets are rallying with the Dow up 170 points while the Nasdaq has gained 43 points. The bond market is currently up 5/32, but we will see an increase in this morning's mortgage rates of approximately .125 of a discount point due to weakness late yesterday.

This morning's major economic news was the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. Today's release revealed that activity fell at an annual rate of 6.1% during the first three months of the year. This was much weaker than the 4.7% decline that was expected and shows that the economy was slowing quicker than thought. This is good news for b onds and mortgage rates because slowing economic activity eases inflation concerns and makes bonds and mortgage related securities more attractive to investors.

We also have the adjournment of the FOMC meeting this afternoon. The meeting began yesterday and will likely end with an announcement of no change to key short-term interest rates. But we will likely see volatility in the markets following the 2:15 PM ET post-meeting statement as investors learn the amount of Treasury securities that the Fed purchased and intend to purchase in the near future. If they announce that more debt was bought than was expected, we could see a bond rally this afternoon that leads to lower mortgage rates. However, a disappointing total could create a sell-off and cause an upward revision to rates later today.

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Mortgage Rate Updates 4-28-09

Tuesday's bond market has opened in negative territory after this morning's only relevant economic data revealed a much stronger than expected reading. The stock markets are showing modest gains with the Dow up 21 points and the Nasdaq up 5 points. The bond market is currently down 5/32, but we still should see an improvement in this morning's mortgage rates of approximately .125 of a discount point due to strength in bonds late yesterday.

The Conference Board reported late this morning that their Consumer Confidence Index (CCI) for April jumped to 39.2. This is a six-month high for the index and a much stronger reading than the 28.8 that was expected. That indicates that consumers were much more optimistic about their own personal financial situations than many had thought. The negative impact on bonds comes from the belief that higher levels of confidence makes it much more likely that consumers will make larger purchases in the near future. And since consumer spending makes up two-thirds of the U.S. economy, any related data is considered important and can influence bond trading.

Tomorrow is going to be a pretty interesting day. We have the possibility of seeing plenty of volatility in the markets and therefore, mortgage rates also. The first event is the release of the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets tomorrow morning. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mort gage rates tomorrow morning. 

This week's FOMC meeting begins today and will adjourn tomorrow afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement. 

With the preliminary version of the GDP being released during morning trading and the FOMC meeting adjourning during afternoon hours, there is a decent possibility of the markets changing directions more than once tomorrow. Accordingly, I strongly recommend maintaining contact with your mortgage professional if still floating an interest rate.

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Mortgage Rate Updates 4-27-09

Monday's bond market has opened in positive territory following early stock weakness. The Dow is currently down 64 points while the Nasdaq has lost 15 points. The bond market is currently up 12/32, but I am not expecting to see much a change in this morning's mortgage rates.

The first of this week's seven relevant economic reports comes late tomorrow morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would ke ep inflation concerns to a minimum. But, a sizable increase could hurt the bond market, pushing mortgage rates higher tomorrow. It is expected to show a reading of 28.8, which would be an increase from March's 26.0 reading.

Wednesday brings us the release of a very important report along with the FOMC meeting results. The report is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets Wednesday and therefore the mortgage market also. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would almost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates Wednesday morning. 

This week's FOMC meeting will begin on Tuesday but will not adjourn until Wednesday afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement. 

Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday will likely be the most important day of the week with the GDP being posted along with the FOMC adjournment, but we may see noticeable changes to rates tomorrow and Friday also. If this week's reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.

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Mortgage Rate Updates 4-26-09

This week is packed with relevant economic news in addition to another FOMC meeting. All seven of the reports are considered to be at least moderately important while several are considered very important to the markets and mortgage rates. This makes it likely that we will see plenty of movement in mortgage pricing over the next several days.

The first report comes late Tuesday morning when the Consumer Confidence Index (CCI) for April will be released. This Conference Board index is a key indicator of future spending by consumers. The group surveys 5000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and investments, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slo wdown in spending would keep inflation concerns to a minimum. But, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday. It is expected to show a reading of 28.8, which would be an increase from March's 26.0 reading. 

Wednesday brings us the release of a very important report along with the FOMC meeting results. The report is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. I expect this report to cause major movement in the financial markets Wednesday and therefore the mortgage market also. Analysts are expecting to see a decline in output at an annual rate of 4.9%. A larger decline would be ideal for mortgage rates. But, a stronger than expected reading would alm ost certainly cause stock prices to rise and bond prices to fall, leading to higher mortgage rates Wednesday morning.

This week's FOMC meeting will begin on Tuesday but will not adjourn until Wednesday afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the 2:15 PM ET post-meeting statement. 

The next report of the week is the 1st Quarter Employment Cost Index (ECI) Thursday morning, which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. If it shows a large increase, we may see wage inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing. Current forecasts are showing a rise of 0.5%. 

March's Personal Income & Outlays is the second of two reports due to be posted Thursday morning. This data helps us measure consumers' ability to spend and current spending habits, which is important to the mortgage market due to the influence that consumer spending related information has on the financial markets. If a consumer's income is rising, they are more likely to make additional purchases. This raises inflation concerns and has a negative impact on the bond market and mortgage rates. Current forecasts are calling for a 0.2% decline in income and a 0.1% drop in spending. The lower the reading, the better the news for bonds for both portions of the report.

There are three reports scheduled for release late Friday morning. The first is the University of Michigan's update to their Index of Consumer Sentiment for April. This report gives us an indication of consumer sentiment. I don't expect it to have a significant impact on bonds and mortgage pricing unless it varies greatly from forecasts Current forecasts are c alling for a small downward revision to 61.5.

The second is March's Factory Orders data at 10:00AM. This is a fairly important release because it measures manufacturing sector strength. It is similar to last week's Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report usually has more of an impact on the financial markets than the Factory Orders report does. Still, a larger decline than the 0.7% that is expected could push mortgage rates slightly lower, while a smaller drop will likely lead to higher rates. But, the third report of the morning is the most important and will likely be the biggest influence on bond trading Friday. 

The Institute for Supply Management (ISM) will post their manufacturing index la te Friday morning. This is one of the first important economic reports released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing mortgage rates higher. But, if we see a drop from last month's reading of 36.3, the bond market should thrive and mortgage rates will probably fall. It is expected to show a reading of 38.0. 

Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday will likely be the most important day of the week with the GDP being posted along with the FOMC adjournment, but we may see noticeable changes to rates Friday also. If this week's reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week.

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Mortgage Rate Updates 4-24-09

Friday's bond market has opened in negative territory after this morning's economic data gave us stronger than expected results. The stock markets are also contributing with the Dow up 90 points and the Nasdaq up 28 points. The bond market is currently down 14/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Commerce Department reported early this morning that new orders for durable goods fell 0.8% last month. While the decline is good news for bonds, the problem is that analysts were expecting a 1.5% drop. But offsetting the headline reading was a downward revision to February's orders, meaning that new orders were not as strong as previously announced last month. 

The second report of the day was March's New Home Sales data. It showed little change from February's revised sales figures, however, today's released revealed an upward revision to those figures. In other words, the mark et got what it was expecting?little change in sales of newly constructed homes between February and March. But, the cumulative total of sales was higher than thought. 

Overall, this morning's data is a little confusing, but it appears that activity was higher than previously thought in February and changed little from those higher levels last month. Are these sectors starting to stabilize? It is too soon to tell, but it does make next month's reports that track April activity that much more important.

Next week is very active in terms of economic releases scheduled to be posted. None of them are due for Monday, but there is important data scheduled for every other day of the week, including another FOMC meeting. Look for more details on next week's events in Sunday's weekly preview.

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Mortgage Rate Updates 4-23-09

Thursday's bond market has opened fairly flat after this morning's economic news failed to give us any significant surprises. The stock markets are showing early losses with the Dow down 23 points and the Nasdaq down 6 points. The bond market is currently down 4/32, but we still will likely see an improvement of .125 of a discount point in this morning's mortgage rates due to strength in bonds late yesterday.

The Labor Department reported this morning that 640,000 new claims for unemployment benefits were filed last week. This nearly matched forecasts so has had little impact on this morning's bond trading and mortgage rates.

The second report released this morning came from the National Association of Realtors who said that home resales fell 3% last month. This was a larger decline than expected and indicates that the housing sector is not ready to rebound yet. This is good news for bonds, but this data is not considered to be a highly importa nt piece of data. Therefore, its results also have not heavily influenced this morning's mortgage rates.

March's Durable Goods Orders will be posted early tomorrow morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could lead to stock strength and weakness in bonds, translating into higher mortgage rates tomorrow.

The last report of the week will be March's New Home Sales data but it is the least important release of the week. It tracks approximately 15% of all home sales in the U.S., so its impact on bonds will likely be less than today's report that covered the other 85% of home sales. It is expected to show little change in sales fr om February's levels.

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Mortgage Rate Updates 4-22-09

Wednesday's bond market has opened in negative territory with no relevant economic news and early stock gains making bonds less attractive. The Dow is currently up 60 points while the Nasdaq has gained 28 points. The bond market is currently down 13/32, which should equate to an increase in this morning's mortgage rates of approximately .250 of a discount point.

There is no relevant data scheduled for release again today, so look for any movement in bond prices and mortgage rates to come as a result of a swing in stock prices. Yesterday's afternoon weakness in bonds was not a complete surprise and we may have more of it today. Accordingly, this may be a good time to lock a rate if closing in the immediate future.

We do have some relevant data scheduled for release tomorrow. The National Association of Realtors will post March's Existing Homes Sales early tomorrow morning. They are expected to show a drop from February's sales, but this data is not considered highly important. It can however, influence trading and lead to slight changes in mortgage rates if it varies greatly from forecasts.

Also tomorrow is the weekly release of unemployment figures from the Labor Department. They are expected to show that 639,000 new claims for benefits were filed last week. This would be an increase from the previous week's total. The higher the number of claims, the better the news for bonds and mortgage rates.

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Mortgage Rate Updates 4-21-09

Tuesday's bond market has opened in positive territory despite gains stocks. The Dow is currently up 34 points while the Nasdaq has gained 20 points. The bond market is currently up 7/32, which with yesterday's late strength will improve this morning's mortgage rates by approximately .250 of a discount point.

There is no relevant data scheduled for release today or tomorrow, so expect to have any movement in stocks to be the driving force behind bond and mortgage rate swings. If the major stock indexes continue to rise this morning, we may see downward revisions to mortgage rates later today.

The next relevant economic data comes Thursday morning when the National Association of Realtors will post March's Existing Homes Sales. They are expected to show a drop from February's sales. The sister report to this release, March's New Home Sales will be released Friday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts' forecasts, I don't think they will cause much movement in mortgage rates. 

We are still looking for Friday's data to cause the most movement in mortgage rates this week. It is by far more important than any of the other weekly or monthly reports being posted this week. We have seen some improvement in rates the first two days, but if Thursday's and Friday's data gives us stronger than expected results we could still close the week with rates higher than opening levels.

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Mortgage Rate Updates 4-20-09

Monday's bond market has opened strong following a sizable sell-off in stocks. The stock markets are starting the week off with large losses during early trading. The Dow is currently down 213 points while the Nasdaq has lost 51 points. The bond market is currently up 28/32, but we will likely see little change in this morning's mortgage rates due to weakness late Friday.

The Conference Board gave us the week's first data late this morning, saying that their Leading Economic Indicators (LEI) for March fell 0.3%. This matched forecasts and therefore had little impact on today's bond trading or mortgage rates. The decline means that the index is predicting moderate slowing in economic activity over the next several months.

There is no relevant data scheduled for release tomorrow or Wednesday, so expect to have any movement in stocks to be the driving force behind bond and mortgage rates swings. 

The National Association of Realtors wil l post March's Existing Homes Sales numbers Thursday morning, which are expected to show a drop from February. A similar report to this one and actually the week's least important data- March's New Home Sales will be released Friday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts' forecasts, I don't think they will cause much movement in mortgage rates. 

Overall, look for Friday to be the most important day of the week with the Durable Goods report being posted. The rest of the week will likely be heavily influenced by the stock markets. If the major stock indexes rally, bonds will likely suffer and mortgage rates will move higher. If stocks fall for the week, we could see mortgage rates move lower the next few days.

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Mortgage Rate Update 4-19-09

This week is fairly light in terms of economic news scheduled for release. There are four reports scheduled, but only one of them is likely to cause much movement in mortgage rates. Accordingly, there is a fairly decent possibility of seeing a fairly calm week in the mortgage market, assuming that the stock markets do the same.

The week's first data comes tomorrow morning when the Conference Board will release their Leading Economic Indicators (LEI) for March. This data attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market may fall and mortgage rates could rise. If it shows a weaker than expected reading, the bond market may move higher and mortgage rates should improve slightly. This is considered to be a moderately important report, so we may see a slight movement in rates as a result of this report. It is expected to show a decline of 0.3%.

There is no relevant data sched uled for release Tuesday or Wednesday. The National Association of Realtors will post March's Existing Homes Sales numbers Thursday morning, which are expected to show a drop from February. A similar report to this one and actually the week's least important data- March's New Home Sales will be released Friday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts' forecasts, I don't think they will cause much movement in mortgage rates. 

March's Durable Goods Orders will also be posted Friday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts are calling for a decline of 1.5%. This would be a sign of manufacturing sector weakness that would be good news for bonds, especially if the report shows a larger than expected decline. A stronger level of new orders could l ead to stock strength and weakness in bonds, translating into higher mortgage rates Friday.

Overall, look for Friday to be the most important day of the week with the Durable Goods report being posted. The rest of the week will likely be heavily influenced by the stock markets. If the major stock indexes rally, bonds will likely suffer and mortgage rates will move higher. If stocks fall for the week, we could see mortgage rates move lower the next few days.

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Mortgage Modifications

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Mortgage Rate Updates 4-17-09

Friday's bond market has opened in negative territory following a stronger than expected consumer sentiment report and an uneventful morning in stocks. The stock markets are mixed with the Dow up 12 points and the Nasdaq down 9 points. The bond market is currently down 12/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point.

Today's only relevant economic news was the University of Michigan's Index of Consumer Sentiment for April. It was expected to show a reading of 58.5, but today's release revealed a reading of 61.9. While this is not a figure that is likely to drastically move the markets, it does indicate that consumers are more optimistic about their own financial situations than some had thought. That can be considered a negative for bonds because it is believed to mean that consumers are more apt to make large purchases in the near future.

Fed Chairman Bernanke will be making a speech today, but it is not likely to affect the markets or mortgage rates. There is no Q & A scheduled following the speech and I doubt the prepared text will say anything that will be of much interest to the markets.

Next week is fairly light in terms of economic releases. It does bring us a handful of reports but only one can be considered of high importance. The two housing reports may create some interest if they show an unexpected rise in new and existing home sales, but this week's data was clearly more important to the market and mortgage rates.

Unlike many, there is data for release this Monday. March's Leading Economic Indicators (LEI) will be posted late Monday morning. It attempts to predict economic activity over the next three to six months, but is thought of as only a moderately important report. Look for more details on it and the rest of the week's events in Sunday's weekly preview.

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Mortgage Rate Updates 4-16-09

Thursday's bond market has opened in negative territory after yesterday's late stock rally has made bonds less appealing to some. The stock markets are mixed during morning trading with the Dow down 26 points and the Nasdaq up 10 points. The bond market is currently down 11/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

Neither of today's two reports were likely to heavily influence mortgage rates. March's Housing Starts data came in well below forecasts, indicating that the new home part of the housing sector still remains weak. Even new permits, which are pulled prior to construction starting, fell much more than thought. While this is good news for bonds, its impact on today's trading and mortgage rates has been minimal because this data is not considered to be one of the more important reports we see each month.

The Labor Department announced this morning that 610,000 new claims fo r unemployment benefits were filed last week. This was much lower than the 658,000 that were expected. However, as with the Housing Starts data, these figures are not considered to be highly important. This time though, we can this is fortunate for mortgage rates because the drop in new claims indicates a stronger than expected labor market. Had this data been a monthly report, we may have seen a larger increase in this morning's rates than we did get.

Yesterday's Beige Book report didn't reveal any major surprises. It did show that many districts reported stabilizing in some economic indicators. This could be translated to mean that economic activity may begin to strengthen in the near future. However, it is well too soon to make that prediction yet. The report did reiterate a weak labor sector, which will make an economic recovery more difficult in the immediate future.

The final release of the week comes late tomorrow morning when the Univers ity of Michigan's Index of Consumer Sentiment will be posted. This index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a decline from March's 57.3 reading. Current forecasts are calling for a reading of approximately 58.5.

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Mortgage Rate Updates 4-15-09

Wednesday's bond market has opened flat following an uneventful open in stocks and mixed results in this morning's economic data. The stock markets are mixed with the Dow up 19 points and the Nasdaq down 9 points. The bond market is currently unchanged from yesterday's close, which will keep this morning's mortgage rates close to yesterday's levels.

For what could have been a very active morning in the markets and mortgage rates, we are seeing little movement. The Labor Department gave us the very important Consumer Price Index (CPI) for March that revealed a 0.1% decline in the overall reading but a 0.2% increase in the core data. The overall reading was weaker than expected, however, the more important core data was expected to rise only 0.1%. This indicates that prices at the consumer level of the economy rose slightly more than thought when excluding volatile food and energy costs. This can be considered negative news for bonds and mortgage rates, bu t the market does not seem to be phased by its results.

The second report of the morning was March's Industrial Production data. It showed a much larger slowdown in production than analysts had thought. Today's report was expected to show a 0.9% decline in industrial output, but actually revealed a 1.5% drop. This means that production at factories, mines and utilities slowed much more than many had predicted. Since slowing manufacturing activity indicates a weaker economy, this news is considered favorable to bonds and mortgage rates.

There is a third report scheduled for release today. The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET. 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 an impact on the financial markets and mortgage rates if it reveals any surprises.

March's Housing Starts report is tomorrow's only monthly report, but it will most likely be a non-factor in the markets and mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand, however, usually doesn't cause much movement in mortgage pricing unless it varies greatly from forecasts. It is this week's least important report and is expected to show a decline in starts of new homes.

We also will see last week's unemployment figures from the Labor Department tomorrow morning. This data usually has little influence on mortgage rates also unless there is a wide variance between forecasts and its actual numbers. It is expected to show that 658,000 new claims for benefits were filed last week. The larger the total of new claims, the better the news for bonds and mortgage pricing.

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Historical Comparison

Historical Comparison

Active Single Family Listings on AZ MLS

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March 2009 SFH Sale Breakdown

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FHA Loans vs. Number of Active Lessons

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Mortgage Rate Updates 4-14-09

Tuesday's bond market has opened in positive territory after this morning's economic data revealed much weaker than expected readings. The stock markets are showing losses with the Dow down 49 points and the Nasdaq down 6 points. The bond market is currently up 10/32, which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.

There were two pieces of important economic data posted this morning and both gave us favorable results. The Commerce Department said that sales at retail establishments in the U.S. fell 1.1% last month. This was well off forecasts of a 0.3% rise and indicates that consumers are not spending nearly as much as thought. That is good news for bonds and mortgage rates because consumer spending makes up two-thirds of the U.S. economy. When consumer spending is softening, economic activity slows, creating a favorable environment for bonds and longer-term securities.

The second report of the day was March's Producer Price Index (PPI), which also gave us surprising results. The overall index fell 1.2% when it was expected to remain unchanged from February's level. But the more important core data, that excludes volatile food and energy prices, did not change. It was expected to rise 0.1%, meaning that prices paid at the producer level of the economy were lower than analysts had expected. This eases inflation concerns and makes bonds more appealing to investors.

Tomorrow brings us the release of three reports to watch. The first is the sister report of today's PPI. March's Consumer Price Index (CPI) will be released early tomorrow morning. This index is very similar to today's release, but tracks prices at the more important consumer level of the economy. This is one of the most important pieces of data we see each month, so stronger than expected readings will most likely lead to higher mortgage rates. Current forecasts are calling for an incr ease of 0.2% in the overall index and 0.1% in the core data.

The second report is March's Industrial Production data at 9:15 AM ET. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for a decline in production of 0.9%. Since signs of a weakening economy are considered favorable to bonds and therefore mortgage rates, a larger decline would be good news for mortgage pricing. However, the CPI is by far the most important data of the day and will likely be the most influential on tomorrow's rates. 

The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET tomorrow afternoon. 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.

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Mortgage Rate Updates 4-13-09

This week brings us the release of seven relevant economic reports for the bond market to digest. We are also heading into corporate earnings season, which could lead to fluctuations in the stock markets. If earnings come in lighter than estimates, the stock markets may fall, leading to an influx of funds into bonds. But, if earnings and forecasts are strong, the major stock indexes may rally, pulling funds from bonds and leading to higher mortgage rates. 

There is no relevant economic news scheduled for release tomorrow. The first important report comes early Tuesday morning when the Commerce Department will release March's Retail Sales data. This piece of data gives us a measurement of consumer spending, which is very important because consumer spending makes up two-thirds of the U.S. economy. Current forecasts call for a 0.3% increase in sales last month. If we see a larger increase in spending, the bond market will probably fall and mortgage rates will ri se. However, a weaker than expected reading could push bond prices higher and mortgage rates lower Tuesday.

The second is March's Industrial Production report at 9:15 AM ET. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for a decline in production of 0.9%. Since signs of a weakening economy are considered favorable to bonds and therefore mortgage rates, a larger decline would be good news for mortgage pricing. However, the CPI is by far the most important data of the day.

The Federal Reserve will post its Fed 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. 

March's Housing Starts report is Thursday's sole report, but it will most likely be a non-factor in the market. It gives us a measurement of housing sector strength and mortgage credit demand, however, usually doesn't cause much movement in mortgage pricing unless it varies greatly from forecasts. It is this week's least important report. 

The final release of the week is the University of Michigan's Index of Consumer Sentiment at 9:45 AM ET Friday. Their consumer sentiment index will give us an indication of consumer confidence, which hint s at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can have a moderate impact on the financial markets. Good news would be a decline from March's 57.3 reading. Current forecasts are calling for a reading of approximately 58.5.

Overall, look for the most movement in rates the middle part of the week. The Retail Sales, PPI and CPI reports are the biggest names on the agenda. Any of the three can cause significant movement in the markets and mortgage rates. Fed Chairman Bernanke is expected to speak at a Kansas City banker's conference mid-day Friday, but I don't think his words will influence trading or mortgage rates. Regardless, we have a very active week ahead of us so please proceed cautiously if still floating an interes t rate.

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Using your Peaks & Valleys at Work and in Life

To Manage your good and bad times:

Make Reality Your Friend

Whether you are temporarily up on a Peak or down in a Valley, ask yourself: What is the truth in this situation?

To Get Out of a Valley Sooner;

Find And Use The Good Hidden In A Bad Time

Relax, knowing that Valleys end. Do the opposite of what put you in the Valley. Get outside of yourself: be of more service at work and more loving in life. Avoid comparisons. Uncover the good that is hidden in a bad time,and use it sooner to your advantage

To Stay on a Peak Longer:

Appreciate And Manage Your Good Time Wisely

Be humble and grateful.Do more of what got you there. Keep making things better. Do more for others. Save resources for your upcoming Valleys.

To Get To Your Next Peak:

Follow Your Sensible Vision

Imagine yourself enjoying a better future in such specific, believable detail, that you soon enjoy doing what takes you there.

To Help People:

Share It With Others!

Help people make good and bad times work for them, too.

If you like this read Peaks and Valleys by Spencer Johnson, M.D.

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C.A.N.I!

What does this mean? First, lets begin by understanding the power that the human mind has. Every person has the ability to experience success is their life. Success can be defined monetarily, physically, emotionally, or in any other manner that you desire. However, that success is not always easily obtained. With the right tools and the correct mindset anything is possible. You have been given the tools, you just need to understand how to use them. C.A.N.I. = Constant and Never Ending Improvement! If you can wake up every morning and follow this simple rule and strive to go to bed every night accomplishing this simple goal SUCCESS will present it self sooner than you might think! Wake up every morning and strive for Constant and Never Ending Improvement!

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