Mortgage Rate Updates 5-29-09

Friday's bond market has opened in positive territory after this morning's economic news failed to give us any significant surprises. The stock markets are showing minor losses with the Dow down 18 points and the Nasdaq down 5 points. The bond market is currently up 10/32, which should improve this morning's rates by approximately .250 - .375 of a discount point. 

The more important of today's two reports was the revision to the 1st quarter Gross Domestic Product (GDP). It showed that the economy contracted at an annual pace of 5.7% during the first three months of the year. This was an upward revision from the previous estimate, but was slightly weaker than the 5.5% decline that was forecasted. This means that economic activity was stronger than previously announced, but was not as strong as analysts' revised forecasts. This basically is good news for bonds, however, the amount of the variance was not enough to heavily influence trading or mortgage pricin g this morning. 

The University of Michigan updated their Index of Consumer Sentiment for May late this morning. They said the index stood at 68.7 compared to the 67.9 that was previously announced. This means that consumers were a little more optimistic about their own financial situations than was expected. That can be considered negative news for bonds, but as with the GDP revision, the results were not enough to affect mortgage rates.

Next week is packed with relevant economic data for the markets to digest. It begins with two reports Monday morning that are relevant to bonds and mortgage pricing. Early Monday morning we will see April's Personal Income and Outlays data that will give us a measurement of consumers' ability to spend and their current spending habits. It is expected to show a decline in both readings.

The Institute for Supply Management (ISM) will post their manufacturing index late Monday morning. This is a fairly im portant report because it measure manufacturer sentiment. It is expected to show a slight increase from March's reading, indicating that more surveyed manufacturers felt business improved this month than the last month. 

Look for more details on next week's data and events in Sunday's weekly preview. It will likely be a pretty active week for mortgage rates with relevant data being posted four out of the five days.

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Mortgage Rate Updates 5-28-09

Thursday's bond market has opened fairly strong, recovering a good part of yesterday's late sell-off. The stock markets opened in positive territory, appearing to follow the same pattern as bonds. However, the major stock indexes have given back those gains and are currently showing losses with the Dow now down 38 points and the Nasdaq down 9 points. The bond market is currently up 18/32, but with yesterday's afternoon selling we will likely see an increase of .750- .875 of a discount point in this morning's rates compared to yesterday's morning rates. 

This morning's economic data wasn't exactly favorable to bonds, but fortunately it has not heavily influenced trading. The Commerce Department reported an increase in April's Durable Goods Orders of 1.9%. This was much stronger than forecasts and indicates that manufacturing activity for big-ticket products may be stronger than expected. That is considered negative news for bonds because rising manufacturin g activity points towards an expanding economy.

April's New Home Sales data was also posted this morning, showing that there was little change from March's sales figures. Analysts were expecting to see a small increase sales, but since this data is not considered to be of high importance, the slight difference between forecasts and the actual sales total was not enough to impact mortgage pricing.

The Labor Department said that 623,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected, but since this tracks only a week's worth of claims its influence on trading and mortgage rates has been minimal.

Today's 7-year Treasury Note auction may influence bond trading and possibly mortgage rates later today. Yesterday's 5-year sale was met with a respectable demand, so hopefully today's sale will also go well. Results will be posted at 1:00 PM ET, so any reaction will come du ring afternoon hours.

The first of two revisions to the 1st quarter Gross Domestic Product (GDP) will be released at 8:30 AM tomorrow. The second revision to this report comes next month but isn't expected to have much of an impact on the financial markets. The GDP is the sum of all goods and services produced in the U.S. and is considered to be the best indicator of economic growth. Last month's preliminary reading revealed a 6.1% decline in the annual rate of growth. Analysts expect an upward revision to this reading with the consensus being a 5.5% decline. If the upward revision is stronger than expected, we may see the bond market react negatively and mortgage rates move higher. 

The second report of the day and the last important data of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. It is forecasted to show little change from this month's preliminary reading of 67.9. An upward revision would be considered a negative for bonds.

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Mortgage Rate Updates 5-27-09

Wednesday's bond market opened fairly flat following a slightly stronger than expected housing report. The stock markets are mixed with the Dow down 18 points and the Nasdaq up 6 points. The bond market is currently down 2/32, but we will see an increase in this morning's mortgage rates of approximately .375 of a discount point due to weakness in bonds late yesterday.

The only relevant economic news of the day came from the National Association of Realtors, who reported that home resales rose 2.9% last month. This was slightly higher than expected but the data has not had much of an impact on today's trading or mortgage rates.

Today's 5-year Treasury Note auction may influence bond trading and possibly mortgage rates if they are met with an exceptional demand or if there is lackluster interest from investors. Results of the sale will be posted at 1:00 PM ET, so any reaction will come during afternoon hours.

Tomorrow morning brings us the release of two relevant monthly reports. The more important of the two is April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show an increase in new orders of approximately 0.5%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a smaller than expected rise, we could see rates improve tomorrow morning. 

April's New Home Sales data will be released late tomorrow morning. This report gives us a measurement of housing sector strength and future mortgage credit demand. However, it is actually the least important release of the week and probably will not have much of an impact on mortgage pricing. It is expected to show a small increase in sales.

The Labor Department will also give us last week's unemployment figures tomo rrow morning. However, this data likely will not influence mortgage rates unless it varies greatly from the 630,000 new claims that are expected.

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Mortgage Rate Updates 5-26-09

Tuesday's bond market opened in positive territory but has since slipped into negative ground after today's only relevant economic data showed a much higher than expected reading. The stock markets are rallying with the Dow up 170 points and the Nasdaq up 46 points. The bond market is currently down 3/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Conference Board gave us the news that is pressuring bonds and boosting stocks. They said late this morning that their Consumer Confidence Index (CCI) spiked to 54.9 this month, greatly exceeding forecasts. Analysts were expecting to see a reading of approximately 42.0, meaning that consumers were much more optimistic about their own financial situations than many had thought. This is negative news for bonds because rising confidence usually translates into higher level of consumer spending, which fuels the economy.

The National Associati on of Realtors will give us the Existing Home Sales report late tomorrow morning. This data tracks resales of homes in the U.S., giving us a measurement of housing sector strength. However, it is not considered to be of much importance to the bond market unless it varies greatly from forecasts. Current forecasts are calling for a small increase in sales between March and April.

Overall, I think we have a busy week ahead of us. The big reports of the week were today's CCI and Thursday's Durable Goods Orders data. If Friday's GDP revision varies greatly from forecasts, it can also lead to sizable changes in rates. 

There are also a couple of Treasury auctions that are also worth noting. The 5-year sale Wednesday and the 7-year auction on Thursday may influence bond trading and possibly mortgage rates if they are met with an exceptional demand or if there is lackluster interest from investors. There is a pretty good possibility of seeing mortgage rates change several times this week, so please proceed cautiously if still floating an interest rate.

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Mortgage Rate Updates 5-25-09

This holiday shortened week brings us the release of six important economic reports or news releases. Two of the six are considered to be of fairly high importance to the bond market and mortgage pricing. The remaining reports are considered to be of moderate importance to the markets. The financial and mortgage markets are closed today in observance of the Memorial Day holiday and will reopen tomorrow morning.

The Conference Board will start the week's releases by posting their Consumer Confidence Index (CCI) at 10:00 AM tomorrow. This is one of the more important releases of the week because is measures consumer willingness to spend. If the index rises, it indicates that consumers feel better about their personal financial situations and are more apt to make large purchases. If confidence is sliding, analysts think consumer spending may slow in the near future. The latter is good news for the bond market because consumer spending makes up two-thirds of the U .S. economy. That should boost bond prices and push mortgage rates lower tomorrow morning. It is expected to show a reading of 42.0 after April's 39.2 reading.

The National Association of Realtors will give us the Existing Home Sales report Wednesday morning. This data tracks resales of homes in the U.S., giving us a measurement of housing sector strength. However, it is not considered to be of much importance to the bond market unless it varies greatly from forecasts. Current forecasts are calling for a small increase in sales between March and April.

We will get two monthly reports Thursday morning. The more important of the two is April's Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show an increase in new orders of approximately 0.5%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth. If it shows a smaller than expected rise, we could see rates improve Thursday morning. 

April's New Home Sales data will be released late Thursday morning. This report gives us a measurement of housing sector strength and future mortgage credit demand. However, it is actually the least important release of the week and probably will not have much of an impact on mortgage pricing. It is expected to show a small increase in sales.

The first of two revisions to the 1st quarter Gross Domestic Product (GDP) will be released at 8:30 AM Friday. The second revision to this report comes next month but isn't expected to have much of an impact on the financial markets. The GDP is the sum of all goods and services produced in the U.S. and is considered to be the best indicator of economic growth. Last month's preliminary reading revealed a 6.1% decline in the annual rate of growth. Analysts expect a n upward revision to this reading with the consensus being a 5.5% decline. If the upward revision is stronger than expected, we may see the bond market react negatively and mortgage rates move higher.

The second report of the day and the last important data of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. It is forecasted to show little change from this month's preliminary reading of 67.9. An upward revision would be considered a negative for bonds. 

Overall, I think we have a busy week ahead of us. With the markets closed today, Tuesday's data will set the tone for the first part of the week. The big reports of the week are Tuesday's CCI and Thursday's Durable Goods. If Friday's GDP revision varies greatly from forecasts, it can also lead to sizable changes in rates. There are also a couple of Treasury auctions that are worth noting. The 5-year sale Wednesday and the 7-year auction on Thursday may influence bond trading and possibly mortgage rates if they are met with an exceptional demand or if there is lackluster interest from investors. There is a pretty good possibility of seeing mortgage rates change several times this week, so please proceed cautiously if still floating an interest rate.

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Mortgage Rate Updates 5-22-09

Friday's bond market opened in well in negative territory as the selling continues into the long weekend. The stock markets are in positive territory with the Dow up 67 points and the Nasdaq up 7 points. The bond market is currently down 16/32, which will likely push this morning's mortgage rates higher by approximately .125 to .250 of a discount point.

There is no relevant data scheduled for release today. The negative tone in bonds is a carryover from yesterday's announcement of $100 billion in new debt being sold by the Fed. This was more than expected and led to selling of current securities. The result was a significant loss to bonds during afternoon trading.

The bond market will close at 2:00 PM ET ahead of the Memorial Day Holiday Monday. All the financial markets will be closed Monday and will reopen Tuesday morning. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the long weekend and t rading thins with many traders starting the weekend early, but after this morning's losses I don't think we will see enough of a change to push mortgage rates any higher today.

Next week is fairly busy with economic reports scheduled for release every trading day. Some of the reports are fairly important, but none are considered extremely important. Look for more details on next week's events in Sunday's weekly preview.

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Mortgage Rate Updates 5-21-09

Thursday's bond market opened in positive territory but has since fallen well into negative ground. The stock markets are showing sizable losses with the Dow down 120 points and the Nasdaq down 34 points. The bond market is now down 26/32, but we will still see a slight improvement to this morning's mortgage rates as a result of gains late yesterday. However, I would not be surprised to see upward rate revisions if bonds continue to remain weak today.

The Labor Department reported this morning that 631,000 new claims for unemployment benefits were filed last week. This was a little higher than expected, but not nearly enough of a difference to influence this morning's mortgage rates.

April's Leading Economic Indicators (LEI) was released late this morning, revealing an increase of 1.0%. This was a larger increase than was expected and indicates that the economy may grow at a decent pace of the next three to six months. But, this is only one ind icator and does not mean that the economy is going to rebound quickly. Still, the news is considered negative for bonds and mortgage rates.

The turnaround in bonds came after the Fed said that $100 billion in new debt will be sold in the immediate future. This was more than expected and makes current Treasury securities less appealing to investors. That has led to selling during late morning trading as traders prepare for those sales.

There is no relevant data scheduled for release tomorrow, but the bond market will close at 2:00 PM ET ahead of the Memorial Day Holiday Monday. All the financial markets will be closed Monday and will reopen Tuesday morning. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early.

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Freddie Mac Relief Refinance

The Freddie Mac Relief Refinance program is designed for homeowners who are making timely mortgage payments but have been unable to refinance due to declining property values and tightening credit terms.* The following benefits make it easier for you to help your borrowers lower their principal and interest:

• Maximum LTV of up to 105% with no maximum CLTV.

• No minimum credit score requirement if borrower’s principal and interest payment does not increase by more than 20%.

• Manual underwriting.

• Mortgage insurance is not required if existing loan does not have mortgage insurance.

• Standard conforming and high balance loan limits are eligible.

• A Home Value Explorer (HVE) can be ordered in lieu of an appraisal.

• Escrows may be transferred.

• Loans with an LTV greater than 80% with an escrow waiver on the original loan may be eligible for an escrow waiver on the new loan.

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Mortgage Rate Updates 5-20-09 Afternoon

The bond market has improved noticeably during afternoon trading after traders were able to digest the minutes from the last FOMC meeting. Those minutes revealed that the Fed has revised their economic outlook lower from previous estimates. They indicated that the U.S. unemployment rate is likely reach somewhere between 9.2% and 9.6% this year. They had previously predicted an 8.5% to 8.8% range, meaning the labor market is worse off than previously thought.

They also said that the Gross Domestic Product (GDP), which is the total of all goods and services produced on the U.S. and the best measurement of economic activity, will likely fall 1.3% - 2.0% this year. They had said previously that a drop between 0.5% and 1.3% was likely. This means that overall economic activity will likely be lower this year than their previous forecasts had called for.

Both of these revisions are good news for bonds. A weak la bor market usually coincides with a weak economy. During a soft economic environment, bonds and mortgage related securities become more appealing to investors. This usually drives bond prices higher and mortgage rates lower.

The impact this news had on today's markets was favorable to mortgage borrowers. The stock markets fell with the Dow closing down almost 53 points and the Nasdaq down almost 7 points, while the bond market rallied to close up 16/32. The result should be an improvement in this afternoon's mortgage rates of approximately .125 - .250 of a discount point. Some lenders may opt to wait until tomorrow morning to reflect those improvements, but many will likely revise lower today.

The Labor Department will post weekly unemployment figures early tomorrow morning. They are expected to say that 640,000 new claims for benefits were filed. This data is not considered to be important, so unless it varies greatly from analysts' forecasts, i t likely will not influence mortgage rates.

The last data of the week comes late tomorrow morning with the release of April's Leading Economic Indicators (LEI) at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a fairly large increase of 0.6% from March's reading, meaning that economic activity is likely to gain momentum during the next few months. A decline would be good news for the bond market and mortgage rates, while a larger increase could cause mortgage rates to inch higher tomorrow.

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Mortgage Rate Updates 5-20-09

Wednesday's bond market has opened up slightly with no relevant economic data being released this morning. The stock markets are showing early gains with the Dow up 60 points and the Nasdaq up 22 points. The bond market is currently up3/32, which should keep this morning's rates at yesterday's level.

There is no relevant economic data scheduled for release today, however, the minutes from the last FOMC meeting will be posted this afternoon. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about when the Fed may make another move to help the economy. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.

The Labor Department will post weekly unemployment figures early tomorrow morning. They are expected to say that 640,000 new claims for benefits were f iled. This data is not considered to be important, so unless it varies greatly from analysts' forecasts, it likely will not influence mortgage rates.

The last data of the week comes late tomorrow morning with the release of April's Leading Economic Indicators (LEI) at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a fairly large increase of 0.6% from March's reading, meaning that economic activity is likely to gain momentum during the next few months. A decline would be good news for the bond market and mortgage rates, while a larger increase could cause mortgage rates to inch higher tomorrow. 

There is no relevant data scheduled for release Friday, but there will be an early close in the bond market Friday afternoon ahead of the Memorial Day Holiday Monday. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the lon g weekend and trading thins with many traders starting the weekend early.

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Mortgage Rate Updates 5-19-09

Tuesday's bond market has opened down slightly despite the release of a much weaker than expected housing report. The stock markets have had little reaction to the data with both the Dow and Nasdaq currently nearly unchanged from yesterday's close. The bond market is down 5/32, which should push this morning's mortgage rates higher by approximately .125 of a discount point.

The Commerce Department said this morning that April's Housing Starts fell almost 13% last month. This was well off of the small increase that was expected and indicates that the housing sector, particularly new construction, is still softening. This is fairly good news for bonds, however, this data is not considered to be highly important. Therefore, its impact on mortgage rates was minimal.

There is no relevant economic news scheduled for release tomorrow, but we will get to see the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about when the Fed may make another move to help the economy. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.

Overall, I think it will be a fairly calm week for mortgage rates, at least compared to last week. We could see little movement in rates if the stock markets remain calm and the week's data doesn't reveal any major surprises. The FOMC minutes may lead to some volatility in the markets, but neither of the economic reports are of great concern.

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Foreclosure Market Report

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How Properties were Purchase in April 2009

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April 2009 Type of Residential Sales

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Residential Sales for Greater Phoenix

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Residential Sales by ARMLS Categories

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Residential Home Sales in Phoenix

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Mortgage Rate Updates 5-18-09

Monday's bond market has opened in negative territory following early stock gains. The stock markets are starting the week off strong with the Dow up 162 and the Nasdaq up 24 points. The bond market is currently down 8/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

There is no relevant economic news scheduled for release today. The rest of the week brings us the release of only two pieces of economic news in addition to the minutes from the last FOMC meeting. Neither of the economic reports can be considered of high importance to the markets and mortgage rates, so we may see a fairly calm week for mortgage rates. 

Tomorrow's release of April's Housing Starts is the first data of the week but is the less important of the two. This data measures housing sector strength and mortgage credit demand by tracking new permits and actual starts of new home construction. It is expected to show a sm all increase in new starts from March's readings. But, since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts.

Overall, I think it will be a fairly calm week for mortgage rates, at least compared to last week. However, if the stock markets continue to rise, we may see bonds fall further and mortgage rates move higher the next few days.

Also worth noting is an early close in the bond market Friday afternoon ahead of the Memorial Day Holiday Monday. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early.

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Mortgage Rate Updates 5-17-09

This week brings us the release of only two pieces of economic news in addition to the minutes from the last FOMC meeting. Neither of the economic reports can be considered of high importance to the markets and mortgage rates, so we may see a fairly calm week for mortgage rates. 

April's Housing Starts is the first data of the week but is the less important of the two. This data measures housing sector strength and mortgage credit demand by tracking new permits and actual starts of new home construction. It is expected to show a small increase in new starts from March's readings. But, since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts.

There is no relevant economic news scheduled for release Wednesday, but we will get to see the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted duri ng the last meeting and any comments about inflation concerns in the economy. The goal is to form a guess about when the Fed may make another move to help the economy. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.

The last data comes late Thursday morning with the release of April's Leading Economic Indicators (LEI) at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a fairly large increase of 0.7% from March's reading, meaning that economic activity is likely to gain momentum during the next few months. A decline would be good news for the bond market and mortgage rates, while a larger increase could cause mortgage rates to inch higher Thursday.

Overall, I think it will be a fairly calm week for mortgage rates, at least compared to last week. We could see little movement in rates if the stock markets remain calm and the week's data doesn't reveal any major surprises. The FOMC minutes may lead to some volatility in the markets, but neither of the economic reports are of great concern. 

Also worth noting is an early close in the bond market Friday afternoon ahead of the Memorial Day Holiday Monday. These early closes sometimes lead to additional volatility in bond prices as investors prepare for the long weekend and trading thins with many traders starting the weekend early.

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Mortgage Rate Updates 5-15-09

The stock markets have given back all of this morning's gains, falling well into negative territory and allowing bonds to improve during afternoon trading. The Dow is currently down 70 points while the Nasdaq is now down 8 points. The bond market is currently down 8/32, which should lead to afternoon improvements in mortgage rates of approximately .125 - .250 of a discount point.

The afternoon swing is due more as a result of concerns about stocks and the potential for further losses in the major indexes than it was about today's economic news. There is some strong speculation by some analysts that the stock markets are likely to be moving lower in the near future. This could make bonds more attractive to investors in the coming weeks and lead to improvements in mortgage rates. However, this is purely speculation at this point.

This morning's economic data basically gave us stronger than expected re sults that created a negative tone on the bond market during early trading. Those reports also led to this morning's stock gains. But, those gains were short-lived as the stocks are falling into the close of trading and will likely end the week with losses.

The Labor Department said early this morning that the Consumer Price Index (CPI) was unchanged last month, but the core data reading that excluded more volatile food and energy prices 0.3%. It was expected to rise only 0.1%, indicating that prices at the consumer level of the economy are rising quicker than thought. This is bad news for bonds because it raises inflation concerns and makes long-term securities less attractive to investors.

April's Industrial Production and the University of Michigan's Index of Consumer Sentiment also gave us stronger than expected results. The production report revealed a 0.5% decline in output compared to a 0.6% forecast. The sentiment index came in at 67.9, ex ceeding forecasts by more than a percentage point. Both of these reports were also unfavorable to bonds, but the CPI was the most important of the three and had the biggest influence on this morning's mortgage rates.

Next week is pretty light in terms of scheduled economic releases. There are no major economic reports scheduled for release except for the minutes from the last FOMC meeting. There is no data scheduled for release until Tuesday morning. Look for more details on next week's events in Sunday's weekly preview.

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Mortgage Rate Updates 5-14-09

Thursday's bond market has opened flat after this morning's inflation report failed to give us a significant surprise. The stock markets are showing gains during morning trading that have also helped keep bonds near yesterday's closing level. The Dow is currently up 45 points while the Nasdaq has gained 22 points. The bond market is currently down 1/32, but we will still likely see a slight increase in this morning's mortgage rates.

The Labor Department said this morning that April's Producer Price Index (PPI) rose 0.3%. This was higher than expected, however, the 0.1% increase in the core data reading that excludes more volatile food and energy prices matched forecasts. In other words, the overall index showed that prices rose more at the producer level of the economy than was predicted, but the more important core data did not reveal any surprises. 

The Labor Department also released last week's unemployment figures, saying that 637,000 new c laims for benefits were filed. This was more than expected, which is favorable for bonds. However, this data is not important enough to heavily influence mortgage rates.

There are three relevant reports scheduled to be posted tomorrow. The first is the week's most important. April's Consumer Price Index (CPI) will be posted at 8:30 AM. It is similar to today's PPI report, but measures inflationary pressures at the more important consumer level of the economy. Its results will be watched closely and can lead to significant volatility in the bond market and mortgage pricing. Current forecasts are calling for no change in the overall index and a 0.1% increase in the core data reading. The core data is the more important of the two since it excludes more volatile food and energy prices.

April's Industrial Production is the second relevant report. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is exp ected to show a 0.6% decline in production, indicating that manufacturing activity is slowing rapidly. A larger decline in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is weaker than expected. 

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 and usually has a moderate impact on the financial markets. It is expected to show a reading of 65.0, which would be little change from last month's final reading. If it shows a decline in consumer confidence, bond prices will likely rise, assuming the CPI does not give us a significant surprise.

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Mortgage Rate Updates 5-13-09

Wednesday's bond market has opened in positive territory following a much weaker than expected Retail Sales report. The stock markets are showing sizable losses with the Dow down 159 points and the Nasdaq down 26 points. The bond market is currently up 14/32, which will likely improve this morning's mortgage rates by approximately .125 - .250 of a discount point.

The Commerce Department reported this morning that sales at retail establishments fell 0.4% last month. This was much lower than the 0.1% decline that was expected and indicates that consumer spending is softening. Since consumer spending makes up two-thirds of the U.S. economy, today's report hints that an economy recovery may not be as soon as some analysts had thought. That is good news for bonds and mortgage rates because slowing economic activity makes bonds and mortgage related securities more attractive to investors.

Tomorrow morning also brings us an important economic report w ith the release of April's Producer Price Index (PPI). This index helps us measure inflationary pressures at the producer level of the economy. If it reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.

Also tomorrow will be the release of last week's unemployment figures by the Labor Department. Last Thursday's posting showed a sizable drop in new claims for unemployment benefits. Tomorrow's release is expected to reveal 609,000 new claims were filed, which would be an increase of 8,000. However, this data is not nearly important as the PPI is and will likely not influence bond trading and mortgage rates unless it varies greatly from f orecasts.

Friday brings us the release of three relevant reports, including the very important Consumer Price Index (CPI). The other two are moderately important to the markets, but the group of three combined can create a large amount of volatility in the markets if they reveal surprising results. But the CPI will be the primary report of the day.

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Mortgage Rate Updates 5-12-09

Tuesday's bond market has opened down slightly with no important economic news scheduled for release today. The stock markets are showing minor losses with the Dow down 6 points and the Nasdaq down 17 points. The bond market is currently down 4/32, but we will still likely see an improvement in this morning's mortgage rates of approximately .125 - .250 of a discount point due to strength late yesterday.

March's Goods and Services Trade Balance report was posted this morning, revealing a trade deficit of $27.6 billion. This figure was below forecasts, but since this data is not considered to be highly important, its impact on this morning's trading has been minimal.

The first important piece of data comes tomorrow morning when April's Retail Sales report will be released. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can ha ve a pretty significant impact on the markets. Current forecasts are calling for a 0.1% decline in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower tomorrow. However, a larger increase could fuel bond selling and lead to higher mortgage rates.

Thursday brings us another important report with the release of April's Producer Price Index (PPI). This index helps us measure inflationary pressures at the producer level of the economy. If it reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.

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Mortgage Rate Updates 5-11-09

Monday's bond market has opened well in positive territory due early selling in stocks. The stock markets are posting significant losses with the Dow down 106 points and the Nasdaq down 7 points. The bond market is currently up 18/32, which should improve this morning's mortgage rates by approximately .250 of a discount point.

There is no relevant economic news scheduled for release today. The first data of the week is March's Goods and Services Trade Balance report early tomorrow 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 the least important of this week's data.

The first important piece of data is the release of April's Retail Sales early Wednesday morning. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling for a 0.1% decline in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower Wednesday. However, a larger increase could fuel bond selling and lead to higher mortgage rates.

Overall, it likely will be a pretty active week for mortgage rates. Besides the week's important economic news, look for the stock markets to be a major influence on trading. The most important day of the week is Friday with three reports on the agenda, including the CPI. But Wednesday is also important due to the Retail Sales report. I am expecting to see several noticeable changes to rates this week, and would not be surprised to see multiple intra-day revisions also. Accordingly, please be attentive to the markets if still floating an interest rate.

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Mortgage Rate Updates 5-10-09

There are several important pieces of economic news scheduled for release this week, but three stand out above the others. There are a total of six reports scheduled, so it can be considered a fairly active week. There is no relevant data due out tomorrow, so expect the stock markets to help drive bond trading and mortgage rates. 

March's Goods and Services Trade Balance report will be released early Tuesday 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 the least important of this week's data.

The first important piece of data is the release of April's Retail Sales early Wednesday morning. This is an extremely important report for the financial markets as it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, this data can have a pretty significant impact on the markets. Current forecasts are calling fo r a 0.1% decline in sales from March to April. A weaker than expected level of sales should push bond prices higher and mortgage rates lower Wednesday. However, a larger increase could fuel bond selling and lead to higher mortgage rates.

The second important report of the week is April's Producer Price Index (PPI) early Thursday morning, which 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 and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes food and energy prices is also expected to rise 0.1%. A smaller than expected increase in the core data would be ideal for mortgage shoppers.

There are three relevant reports scheduled to be posted Friday. The first is the week's most important. April's Consumer Pr ice Index (CPI) will be posted at 8:30 AM. It is similar to Thursday's PPI report, but measures inflationary pressures at the more important consumer level of the economy. Its results will be watched closely and can lead to significant volatility in the bond market and mortgage pricing. Current forecasts are calling for no change in the overall index and a 0.1% increase in the core data reading. The core data is the more important of the two since it excludes more volatile food and energy prices.

April's Industrial Production is Friday's second relevant report. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.6% decline in production, indicating that manufacturing activity is slowing rapidly. A larger decline in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is weaker than expected.

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 and usually has a moderate impact on the financial markets. It is expected to show a reading of 65.0, which would be little change from last month's final reading. If it shows a decline in consumer confidence, bond prices will likely rise, assuming the CPI does not give us a significant surprise. 

Overall, it likely will be a pretty active week for mortgage rates. Besides the week's important economic news, look for the stock markets to be a major influence on trading. The most important day of the week is Friday with three reports on the agenda, including the CPI. But Wednesday is important due to the Retail Sales report. I am expecting to see several noticeable changes to rates this week, and would not be surprised to see multiple intra-day revisions also. Accordingly, please be attentive to th e markets if still floating an interest rate.

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Mortgage Rate Updates 5-08-09

Friday's bond market has opened in positive territory despite a stronger than expected reading in today's Employment report. The stock markets are reacting favorable also with the Dow up 76 points and the Nasdaq up 6 points. The bond market is currently up 12/32, but we will still see an increase in this morning's rates of approximately .125 of a discount point due to weakness in bonds late yesterday.

The Labor Department reported this morning that the U.S. unemployment rate rose to a 25-year high of 8.9% last month. They also reported that 539,000 jobs were lost during the month, falling short of the 600,000 jobs that latest forecasts had predicted. This was the fewest number of lost jobs since October, giving hope that the shedding may be slowing. The average hourly earnings reading rose 0.1%, when analysts were expecting a 0.2% increase. Overall, the report gave us mixed results on the status of the labor market, but bonds and stocks have reacted favora bly to its results.

Next week is very busy with many relevant economic reports on the calendar. There is nothing of importance scheduled for release Monday or Tuesday, but the rest of the week brings us a couple of key inflation readings, an important measurement of consumer spending and a reading on industrial output. 

I am expecting to see a fairly calm day Monday unless we get some relevant news over the weekend. But the middle and latter parts of the week will probably be extremely active with several key reports being posted over three trading days. Look for details on next week's events in Sunday's weekly preview, but expect to see some volatility late next week.

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Playing chicken with your home lender

It's a conundrum: If you can't get a loan modification unless you're late on your mortgage payments, is it smart to get behind on purpose?

[Related content: homes, home financing, foreclosure, refinance, mortgage]

By Bankrate.com

If you've been tempted to skip a few mortgage payments to try to persuade your lender to modify your loan, you may want to resist that temptation. Whether your goal is to stave off foreclosure or just to make your payments more affordable, experts say deliberate delinquency is not as smart as it may seem.

The bottom line is that:

• If you can make your payment, you should do so.

• If you can't, you shouldn't.

• If you're in between, you should get help to assess your situation.

"Back in the day, (lenders) would only provide modifications to people who were significantly behind because that evidenced that they truly needed the loan modified. They were of that mind-set, and they didn't realize the enormity of the problem," says Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling in Silver Spring, Md. "But now they've realized that the logic of making someone become delinquent and dig a deep financial hole before you help them was really not good for anyone."

You don't have to be behind

That new thinking can be seen on some, though by no means all, of the lenders' Web sites, which have been updated to suggest, however subtly, that a late payment may no longer be a prerequisite to a loan modification. Here are two examples:

• Chase's Web site states: "If you are current on your mortgage, but have had (or are facing) a change in personal circumstances, such as an uncontrollable reduction in income or increase in payment that will create a financial hardship, and feel you are at risk of losing your home, your next step will be to determine if you may qualify for loan modification."

• Bank of America/Countrywide's Web site states: "If you think you might fall behind on your payments or have already missed a payment, our specialists will work with you to determine your eligibility for one or more of these potential solutions: refinancing, extending the term of the loan, interest rate reductions, temporarily freezing monthly mortgage payments, extended repayment schedules (or) decreasing the principal balance of the loan."

Christine Holevas, a spokeswoman for JPMorgan Chase in Chicago, declined to comment on whether homeowners should make a late payment to better their odds of a loan modification. But she reiterated some standard advice: You shouldn't wait until you've missed a payment to contact your loan servicer. Instead, you should pick up the phone as soon as you believe you may be in danger of delinquency.

"If you think you're in trouble, contact your servicer. You do not have to be late. You do not have to have missed a payment. Contact your servicer so they will know and they can start the process," Holevas says.

Missed payments disqualify borrowers

The federal government's new Making Home Affordable plan may be another reason lenders have tweaked their policies with respect to delinquency and loan modifications. The new plan, which includes a loan modification program and a refinance program, offers lenders new incentives to participate.

The loan modification program is open to borrowers who have missed one or more payments, but a missed payment is not a requirement. In fact, the FAQs for this program state that "responsible borrowers who are struggling to remain current on their mortgage payments are eligible if they are at risk of imminent default." Risk of default might involve a mortgage payment that has reset and is no longer affordable, a significant loss of income or other types of hardship.

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The refinance program is open only to homeowners who haven't made a payment more than 30 days late within the past 12 months. The FAQs state that "borrowers who are currently delinquent or have been 30 days overdue more than once during the past 12 months will not qualify."

That means if you deliberately missed a mortgage payment, you've likely disqualified yourself from this program.

Continued: Missed payments wreck credit scores

Missed payments wreck credit scores

If you're still tempted to skip a payment, you should be aware that that choice will harm your credit scores, says Craig Watts, the public affairs manager in San Rafael, Calif., for Fair Isaac, the developer of FICO scores.

Credit scores weigh the recentness, severity and frequency of your delinquent accounts, Watts says. That means the more recent a missed payment, the greater its negative effect on your scores. Payments more than 90 days late will cause the most damage, and a pattern of delinquent accounts will hurt more than an isolated incident.

Lower credit scores might seem a small price compared with the prospect of a cheaper mortgage payment. However, those lower scores will have consequences that shouldn't be taken lightly. If your scores drop, you'll have more difficulty refinancing your mortgage, getting a car loan, obtaining new credit cards or opening new accounts at retail stores. You also could be required to make cash deposits to obtain utility, cable TV or phone service, Watts says.

The favorable terms you've enjoyed on your existing credit accounts could be altered as well, Cunningham says.

What's more, if you willfully skip a mortgage payment, you'll still owe that amount, plus additional interest and penalties that can add up fast. If you miss several payments, you might not be able to recover financially even if your lender modifies your loan. And if you eventually lose your home to foreclosure, you might find it hard to rent a place to live once your credit scores have been damaged.

Long-term prognosis is key

But suppose your financial situation is such that you cannot make your mortgage payment and must conserve cash. Should you sell your car, borrow money from your family, tap into your retirement accounts or resort to other one-time fixes to make sure you don't miss a payment even if foreclosure is a near certainty or the financial or emotional burden of your house payment is insupportable?

The answer depends on your own situation, but the anticipated duration of your financial setback and what Cunningham calls the "long-term sustainability" of your loan should be important considerations. For example, if you've lost your job but expect to find another position quickly, you might want to find a way to get past the problem and keep your home. On the other hand, if your situation isn't that easily mended, you might not want to take drastic measures to save your home.

MSN Money multimedia

 Your biggest investment
MSN Money's special series on housing includes 'Survival strategies for home sellers' and 'Anatomy of a housing meltdown.'

Perhaps the best advice for homeowners who are caught in a conundrum of whether to make their mortgage payments or give priority to credit card bills or other financial obligations is to get help. Cunningham says homeowners should consult a mortgage counselor who has been trained and certified by the U.S. Department of Housing and Urban Development. Counseling services are provided free by nonprofit agencies.

This article was reported by Marcie Geffner for Bankrate.com.

Published May 8, 2009

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Mortgage Rate Updates 5-07-09

Thursday's bond market has opened in negative territory following the release of stronger than expected economic data and early stock gains. The stock markets are showing moderate strength during early trading with the Dow up 53 points and the Nasdaq up 10 points. The bond market is currently down 13/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point compared to yesterday's morning rates. 

The Labor Department gave us both of this morning's releases. The more important of the two was the 1st Quarter Productivity and Costs data that revealed a larger than expected 0.8% increase in worker output. The bad news came from the Unit Labor Costs reading that showed a 3.3% increase. That was higher than the 2.7% that was forecasted, meaning employer costs were higher than thought. Higher costs can translate to wage inflation concerns, therefore, this portion of the report is a negative for bonds.
<>The second bit of news was last week's unemployment figures. It showed that 601,000 new claims for benefits were filed last week. This is a three month low and was well below forecasts of 635,000, but fortunately this data is not considered to be highly influential on mortgage rates. However, it does raise additional concern about tomorrow's monthly report.

Yesterday's 10-year Note sale was met with a decent demand from investors. That led to improvements in bonds during afternoon trading yesterday and some lenders to revise mortgage pricing lower. The Treasury will sell 30-year Bonds today, posting the results at 1:30 PM ET. Another round of strong bidding could cause bonds to get back some of this morning's earlier losses. However, I suspect that most mortgage lenders will wait until tomorrow's big news rather than revising their rates this afternoon.

Tomorrow morning brings us the release of the almighty Employment report, giving us April 's employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be a larger than expected increase in the unemployment rate and more payrolls lost during the month than was expected. 

It could turn out to be a wonderful day in the mortgage market tomrrow, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for an 8.9% unemployment rate and approximately 620,000 jobs lost during the month.

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Mortgage Rate Updates 5-06-09

Wednesday's bond market has opened down slightly with no relevant data on the agenda today. The stock markets are mixed with the Dow up 22 points and the Nasdaq down 10 points. The bond market is currently down 4/32, which will likely keep this morning's mortgage rates at yesterday's levels.

There was no important economic news scheduled for release today. The Treasury is selling 10-year Notes today and 30-year Bond tomorrow. Results of these sales will be posted at 1:30 PM ET each day. If they are met with a strong demand, we should see bond prices rise during afternoon trading. If the reaction is strong in the market, it could lead to afternoon improvements to mortgage rates. However, a lackluster demand, particularly from international buyers, could lead to bond selling and higher mortgage rates during afternoon trading.

The Labor Department will release its 1st Quarter Productivity and Costs data early tomorrow morning. This information hel ps us measure employee productivity in the workplace. High levels of productivity help allow low-inflationary economic growth. If employee productivity is rising, the bond market should react favorably. However, a decrease could cause bond prices to drop and mortgage rates to rise tomorrow morning. It is expected to show a 0.6% increase in productivity and a 2.7% increase in the labor costs reading.

We will also get last week's unemployment figures from the Labor Department tomorrow morning. This data usually does not influence bond trading enough to affect mortgage rates. However, because April's monthly figures will be posted Friday morning, we may see a stronger reaction than normal as investors prepare for the monthly release. Analysts are expecting to see that 635,000 new claims for benefits were filed last week.

Friday is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The monthly Employme nt report is considered to be one of the most influential releases posted each month. It gives us many readings on the status of the labor market, but the key or headline figures are the national unemployment rate and the number of jobs lost or added during the month. The average hourly earnings reading is also watched because it helps us measure the likelihood of wage inflation and potential consumer spending. This report makes Friday the most important day of the week for mortgage rates.

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Housing inventory

Healthy housing markets typically have inventory levels, or supply of homes for sale, below 6 months.

City: Avondale

Current monthly supply: 4.4

Jan. '09 monthly supply: 8.9

City: Chandler

Current monthly supply: 5.7

Jan. '09 monthly supply: 9.1

City: Gilbert

Current monthly supply: 5.2

Jan. '09 monthly supply: 7.9

City: Glendale

Current monthly supply: 3.2

Jan. '09 monthly supply: 9.1

City: Goodyear

Current monthly supply: 3.8

Jan. '09 monthly supply: 8.6

City: Mesa

Current monthly supply: 4.4

Jan. '09 monthly supply: 8.9

City: Peoria

Current monthly supply: 4.9

Jan. '09 monthly supply: 10.3

City: Phoenix

Current monthly supply: 3.4

Jan. '09 monthly supply: 9.0

City: Queen Creek

Current monthly supply: 2.9

Jan. '09 monthly supply: 6.1

City: Scottsdale

Current monthly supply: 14.3

Jan. '09 monthly supply: 19.4

City: Surprise

Current monthly supply: 3.3

Jan. '09 monthly supply: 7.2

City: Tempe

Current monthly supply: 6.7

Jan. '09 monthly supply: 8.7

Source: Cromford Report, real-estate analyst Mike Orr

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Trustee notices

Trustee notices, or pre-foreclosures, fell to 9,092 in April from 10,689 in March, according to data research firm Information Market.

Actual foreclosures, trustee deeds, fell to 3,103 last month from March's 3,377. Cancellations fell by 500 in April to 2,668.

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Mortgage Rate Updates 5-05-09

Tuesday's bond market has opened flat following a relatively calm opening for stocks and a lack of any significant surprises in this morning's testimony by Fed Chairman Bernanke. The stock markets are showing somewhat minor losses at the moment with the Dow down 27 points and the Nasdaq down 29 points. The bond market is currently nearly unchanged from yesterday's close, but we should still see an improvement in this morning's mortgage rates of a approximately .125 of a discount point due to strength late yesterday.

There was no important economic news scheduled for release today. But Chairman Bernanke is giving his speech before a Joint Economic Committee. His headline comment was that the economy will likely begin to expand later this year, effectively ending the recession. However, he also stated that activity and a broader expansion will be slow and that unemployment may rise further. Overall, it can be considered a cautiously optimistic outlook, whic h doesn't differ greatly from many analysts' predictions. 

There is no relevant economic news scheduled for release tomorrow. The Treasury will sell 10-year Notes tomorrow and post results of the sales at 1:30 PM ET. If it was met with a strong demand, we should see bond prices rise during afternoon trading. If the reaction is strong in the market, it could lead to afternoon improvements to mortgage rates. The flip side of that though, is a weak interest from buyers that could lead to bond selling and higher mortgage rates late tomorrow.

The Labor Department will release its 1st Quarter Productivity and Costs data early Thursday morning and April's Employment figures Friday morning. Thursday's report is fairly important, but Friday's data is one of the most important reports we see each month.

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