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This is a report I receive 2 to 3 times a week. This report is to help you understand how and why interest rates move. Even through they give you an opinion it is only an opinion.
I help educate my sellers and buyers so they can make sound financial decisions

Arthur
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From: ALAMODE INC.




Monday's bond market has opened in negative territory following a very strong opening in stocks and a stronger than expected piece of economic news. The stock markets are starting the month off with a rally that has the Dow up 174 points and the Nasdaq up 39 points. The bond market is currently down 10/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Institute for Supply Management (ISM) posted their manufacturing index for July late this morning. They announced a reading of 55.5 that was a drop from June's reading but higher than forecasts. This means that manufacturer sentiment did fall last month, however, not by as much as many had thought. Therefore, this data can be considered favorable for stocks and negative for bonds.

June's Personal Income and Outlays data is the first of two reports scheduled for release tomorrow morning. It report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for an increase of 0.1% in income and no change in spending. A larger than expected increase in income means consumers have more funds to spend, which is not favorable to bonds because consumer spending makes up two-thirds of the U.S. economy. Ideally, we would like to see declines in spending and income.

Late tomorrow morning, we will get to see June's Factory Orders data. This report helps us measure manufacturing sector strength by tracking orders for both durable and non-durable goods during the month of June. It is similar to last week's Durable Goods Orders report that tracked orders for big-ticket items only. Since a significant portion of the data was released last week, this report likely will not have as big of an impact on the markets as last week's did. Analysts are expecting to see a decline in new orders of app roximately 0.5%. A larger than expected drop would be considered good news for bonds and mortgage pricing.

Overall, I am expecting to see another fairly active week for mortgage rates. There are three more relevant reports scheduled for release this week. The most important day is Friday due to the Employment report being released. The rest of the week is likely to be calmer than Friday unless something unexpected happens, such as a major stock rally or sell-off. Due to the likelihood of seeing noticeable movement in mortgage rates, this is a good week to maintain contact with your mortgage professional.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I wer e financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2010