Friday's bond market has opened in positive territory following noticeable stock losses. The stock markets are in negative territory following concerns about financial sector and rising oil prices. The result is the Dow down 127 points and the Nasdaq down 38 points. The bond market is currently down 16/32, but we likely will see little change in this morning's mortgage rates due to weakness in bonds late yesterday.

There is no relevant economic data being posted today. As expected, stock prices are influencing bond trading. As long as the stock markets do not stage a rally and recover their early losses, I am expecting bond prices to remain fairly calm and mortgage rates to stay at this morning's levels. If the major stock indexes fall further, we may see enough improvement in bonds for mortgage rates to revise lower this afternoon.

Next week is fairly busy with economic releases, not only in terms of the number of reports scheduled for release, but also the importance of some of them. We will see data on consumer confidence, manufacturing sector strength, housing sales, and the final reading of the 2nd Quarter GDP. We also have the next FOMC meeting to be concerned about that will likely bring volatility to the markets and mortgage rates.

I read an article the other day that shook my core. Mortgage brokers are sure getting an bad rap in the media today and I don't think anyone can better summerize my feelings about the situation. This is just one little snip-it:

"The last time I checked, mortgage brokers didn’t do the underwriting of all these fraudulent and unsupportable loans... it was unvarnished underwriting negligence and pure consumer greed and fraud that drove the market to the edge, and beyond..."

For full article, click here.

Granted, there have been some real losers in the Real Estate field - lenders, mortgage brokers, real estate agents, insurance agents, builders - all alike. But, the state of our current market has shook things up and the cream has risen to the top.

I tend to believe that any con artist who was tripping over themselves to put customers in fraudulent loans for homes they couldn't afford, has now gone onto to an easier gig.  Anyone still in business today, I feel, is the real thing.  In it for the long haul.  Having a vision beyond just how to make a quick buck.  Because, trust me, it ain't quick any more.

Friday's bond market has opened in positive territory as stock prices continue to fall. The major stock indexes are showing losses again as yesterday's major sell-off seems to be carrying into today's trading. The Dow is currently down 58 points while the Nasdaq has fallen 11 points. The bond market is currently up 12/32, pushing the yield on the benchmark 10-year Treasury Note below 4.00%. This should improve this morning's mortgage rates by approximately .125 of a discount point.

Today's most important data was the release of May's Personal Income and Outlays figures. They showed that personal income rose a whopping 1.7% last month, greatly exceeding forecasts of a 0.4% rise. However, most of the surprise increase was a result of the economic stimulus checks and not due to rising wages. The spending portion of the report revealed a 0.8% rise, which slightly exceeded forecasts. Also worth noting is that an inflation reading in the data came in slightly lower than forecasts, so overall, this data can be considered favorable to bonds and mortgage rates.

The second report of the day was the University of Michigan's Consumer Sentiment Index's final reading for June. It showed a modest downward revision of 0.3%, meaning consumer confidence was less than expected. This can also be considered good news for bonds, but this revision is not important enough to heavily influence trading or mortgage rates.

Next week doesn't bring us the release of many reports, but the majority of those on the schedule are considered to be of high-importance to the markets. There is no relevant data due to be posted Monday, but Tuesday does bring us one of the more important reports of the week.

Thursday's bond market has opened in positive territory as stock prices are showing significant losses during early trading. The stock markets are reacting to downgrades and fears of future problems in the banking sector. This has led to the Dow dropping 214 points and the Nasdaq falling 59 points. The bond market is the benefactor as investors seek safe haven from the volatility. With the bond market currently up 8/32, we will likely see an improvement in mortgage rates of approximately .125 - .250 of a discount point.

There were a couple of pieces of economic data released this morning, but none are considered to be of high importance. The final reading to the 2nd quarter GDP matched forecasts at up 1.0%. This was slightly higher than the previous estimate that was announced last month. An important inflation component of the data also was revised higher by 0.1%, but has not impacted bond trading or mortgage rates.

The National Association of Realtors released May's Existing Home Sales report that tracks home resales in the U.S. It showed an increase in sales compared to April's numbers, but this data usually is of low importance to the markets and mortgage rates.

The Labor Department gave us weekly unemployment figures from last week, saying that new claims for benefits rose to 384,000, when analysts were expecting to see a drop in claims. This brings the total back near the important benchmark of 400,000. However, this data also usually has little influence on mortgage rates. But, if the number of claims continues to move higher, this release will likely be watched more closely.

Also worth noting is today's 5-year Treasury Note auction. This sale can affect bond prices and therefore mortgage rates if investor interest in the sales are met with a strong or poor demand. The results will be posted at 1:00 PM ET today. If demand was strong, we should see bond prices improve during afternoon trading. However, a lackluster interest in the sale could lead to bond weakness later today and possibly higher mortgage rates.

May's Personal Income and Outlays data will be posted early tomorrow morning. This report gives us an indication of consumer ability to spend and current spending activity. Analysts are expecting to see an increase of 0.4% in income and a 0.7% rise in the spending portion of the report. Smaller than expected increases should be good news for the bond market and mortgage rates.

WEDNESDAY AFTERNOON UPDATE:

This week's FOMC meeting has adjourned with an announcement that no change was made to key short-term interest rates, which was the first time in the past nine months. This was widely expected, but the post-meeting statement did indicate concerns about inflation. This has helped push bond prices lower than pre-adjournment levels. However, they have not moved enough as of yet to likely cause afternoon revisions to mortgage rates. I am expecting most lenders to reflect these changes in tomorrow's rates.

The stock markets have improved from this morning's levels with the Dow 92 points and the Nasdaq up 48 points. The bond market is currently down 12/32. If bond prices fall much further, we may see upward revisions to mortgage rates by the end of business. If they remain near current levels, the increase will probably be reflected in tomorrow's pricing.

Posted this morning was May's New Home Sales report. It showed a decline in sales of newly constructed homes between April and May, but to a level that was expected. With this data being considered of low importance and the fact that it came very close to analysts' forecasts, this data has been a non-factor in this morning's trading.

The only relevant economic data scheduled for release tomorrow is the final reading to the 1st Quarter GDP and weekly unemployment claims. The GDP data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings.

Wednesday's bond market has opened in negative territory following early stock gains. The stock markets are trading in positive territory with the Dow up 74 points and the Nasdaq 39 points. The bond market is currently down 7/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

The Commerce Department gave us May's Durable Goods Orders this morning, announcing no change in orders for big-ticket items between April and May. This was expected and therefore had little impact on the bond markets or mortgage rates.

Also posted this morning was May's New Home Sales report. It showed a decline in sales of newly constructed homes between April and May, but to a level that was expected. With this data being considered of low importance and the fact that it came very close to analysts' forecasts, this data has been a non-factor in this morning's trading.

The FOMC meeting will adjourn at 2:1 5 PM ET today. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting, so the markets will be watching their post-meeting statement for any indication of the Fed's next move. Many analysts now think the Fed will need to raise key short-term interest rates before they make any further cuts. The statement likely will not give a clear definitive answer to this question, but it could help fuel theories by market participants that will cause plenty of volatility in the markets this afternoon.

I still think that we will hear words of concern about inflation in the economy as a result of high fuel prices. This could lead to higher mortgage rates this afternoon if accurate. Look for an update to this report after the markets have an opportunity to react to the announcement and post-meeting statement.

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

Tuesday's bond market has opened in positive territory following the release of much weaker than expected economic data. The stock markets are showing losses with the Dow down 71 points and the Nasdaq down 22 points. The bond market is currently up 12/32, which will likely improve mortgage rates by approximately .125 of a discount point.

The Conference Board posted June's Consumer Confidence Index (CCI) late this morning, revealing a reading of 50.4. This was much lower than the forecasted reading of 56.0 and was the lowest reading since February 1992. This indicates that consumers are much less optimistic about their own financial situations than many had thought. Ironically, that is considered good news for bonds and mortgage rates because the falling confidence usually means consumers are less apt to make large purchases in the near future. With consumer spending making up two-thirds of the U.S. economy, any related data often has a big impact on the markets.

The only important release scheduled for tomorrow is May's Durable Goods Orders, which gives us an indication of manufacturing sector strength. It is known to be quite volatile from month to month and is expected to show no change new orders from April to May. A decline in new orders would be the ideal scenario for the bond market and could lead to a decline in mortgage pricing tomorrow morning. However, tomorrow afternoon's events will probably influence rates much more than the day's data will.

There are two housing related reports scheduled for release this week, with the first coming tomorrow morning. May's New Home Sales will be released tomorrow while Existing Home Sales will be posted Thursday morning. These reports give us a measurement of housing sector strength and mortgage credit demand, but usually do not cause much movement in mortgage rates.

This week will likely prove to be very active in terms of mortgage rate movement due to the economic data and other events that are scheduled. There are six economic reports scheduled for release, but in addition to the data, another Federal Open Market Committee (FOMC) meeting will be held this week. Together, we have the makings of a potentially volatile week in the financial and mortgage markets.

There is no relevant economic news scheduled for release today. Tuesday brings us the first important report of the week with the release of June's Consumer Confidence Index (CCI). The CCI is very important to the financial markets because it measures consumer willingness to spend, which is important because consumer spending makes up two-thirds of the U.S. economy. If it shows an increase in confidence from last month, we can expect to see the bond market falter and mortgage rates rise slightly. Current forecasts are calling for a reading 57.0, down slightly from last month's 57.2 reading.

The only important release scheduled for Wednesday is May's Durable Goods Orders, which gives us an indication of manufacturing sector strength. It is known to be quite volatile from month to month and is expected to show no change new orders from April to May. A decline in new orders would be the ideal scenario for the bond market and could lead to a decline in mortgage pricing Wednesday.

There are two housing related reports scheduled for release this week, but neither is likely to cause any movement in mortgage rates. May's New Home Sales will be released Wednesday morning while Existing Home Sales will be posted Thursday morning. These reports give us a measurement of housing sector strength and mortgage credit demand, but usually do not cause much movement in mortgage rates.

The FOMC meeting that begins Tuesday afternoon will adjourn Wednesday afternoon. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting. But, as we have seen so many times in the past, it is the post meeting statement that often creates the most volatility in the markets. They could give an opinion of the overall economy, hinting at a possible future move or lack of one. Statements like these could cause a knee-jerk reaction in the markets and possibly mortgage pricing Wednesday afternoon. I suspect we will hear concerns about inflation that will lead to selling in bonds.

The only relevant economic data scheduled for release Thursday is the final reading to the 1st Quarter GDP and weekly unemployment claims. The GDP data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Last month's first revision showed a 0.9% rate of growth, but analysts are expecting to see an upward revision to 1.0%.

May's Personal Income and Outlays data will be posted Friday morning. This report gives us an indication of consumer ability to spend and current spending activity. Analysts are expecting to see an increase of 0.4% in income and a 0.7% rise in the spending portion of the report. Smaller than expected increases should be good news for the bond market and mortgage rates.

The most active day this week should be Tuesday or Wednesday to the importance of the data and FOMC meeting. Wednesday's Durable Goods Orders could also help make it a busy day. Friday's news may also affect mortgage rates, but likely not as much as earlier days. This would definitely be a good week to maintain constant contact with your mortgage professional.

Thursday's bond market has opened in negative territory as interest turns to stocks. The stock markets are currently mixed with the Dow up 16 points and the Nasdaq down a few points. The bond market is currently down 8/32, but we will likely still see an improvement in this morning's mortgage rates of approximately .125 of a discount point due to strength in bonds late yesterday.

The first piece of news released today was last week's unemployment numbers from the Labor Department. They reported that 381,000 new claims for benefits were filed last week. This was a decline form the previous week, but still higher than the 375,000 that was expected. This can be considered a bit of good news for bonds, but the truth is that this data is generally considered to be of low importance because it tracks only a week's worth of claims.

May's Leading Economic Indicators (LEI) was released this morning by the Conference Board, who is a New York-based busin ess research group. They said that the indicators rose 0.1%, slightly exceeding forecasts. This means that economic activity is being predicted to rise slightly over the next three to six months.

There is no relevant economic news scheduled for release tomorrow, so look for oil prices and stock movement to be the biggest influences on bond trading and mortgage rates. I am expecting to see a fairly quiet day in rates, but still fear there are more increases to mortgage rates likely before we see much of a decline.

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

Inflation Fears Persist

In both the US and in Europe, central bank officials have focused recently on the threat of higher inflation. Monday, the Fed's Fisher pointed to increased global demand as a major source of inflationary pressures. Later in the week, the Fed's Plosser described inflation as a very serious problem for the economy. Fed Chief Bernanke warned that the Fed will "strongly resist" a rise in long-term inflation. He also remarked that the surprising jump in the Unemployment Rate from 5.0% to 5.5% didn't have much impact on the Fed's outlook for economic growth and inflation.

With so much talk about the threat of higher inflation, many mortgage investors positioned their portfolios very conservatively ahead of Friday's big Consumer Price Index (CPI) inflation report. The report, however, revealed no startling surge in inflation. May CPI came in slightly higher than expected, while May Core CPI, which excludes the food and energy components, matched the consensus forecast. Mortgage investors were pleased that the news wasn't worse, and mortgage rates declined after the report was released, although they remained higher than the prior week.

In the housing sector, in April pending home sales jumped 6% from March, far exceeding the consensus forecast for a small decline. Pending home sales are a leading indicator of future housing market activity. The National Association of Realtors (NAR) latest forecast predicted that conditions will remain soft in the short term, but that activity will pick up during the second half of the year.