Monday's bond market opened in negative territory following stronger than expected economic data, but at 1:00 PM the good results of the enormous $44B 2-year Note auction pushed bond prices higher. The stock markets are starting the week with strong gains with the Dow up 133 points and the Nasdaq up 30 points. The bond market is currently up 22 basis points and rates have improved twice since we initially posted rates at 11:30 AM.

The National Association of Realtors reported late this morning that sales of existing homes rose over 10% last month, greatly exceeding analysts' forecasts. This fuels the theory that the housing sector is strengthening, which is thought by many to be needed for a broader economic recovery. Therefore, this data can be considered bad news for bonds and mortgage rates, but this was one of the week's least important reports so its impact on rates has been minimal.

Tomorrow morning brings us the first revision to the 3rd Quarter Gross Domestic Product (GDP). The GDP revision is expected to show a downward revision from last month's preliminary reading of a 3.5% annual rate of expansion. Current forecasts call for a reading of approximately 2.9%, meaning that there was less economic growth during the third quarter than previously thought. This would be good news for the bond market and mortgage rates, but it will likely take a smaller than expected reading for this report to improve mortgage rates.

November's Consumer Confidence Index (CCI) will also be released tomorrow morning, but during late morning trading. It gives us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This raises inflation concerns and usually pushes mortgage rates higher. Analysts are expecting to see little change from last month's 47.7 reading, meaning consumer were just as concerned about their own financial situations as they were last month. A weaker than expected reading should be good news for mortgage rates, but a stronger than expected reading could push mortgage rates higher tomorrow.

Also worth noting about tomorrow is the release of the minutes from the last FOMC meeting. The FOMC minutes may be a major mover of the markets or a non-factor, depending on what they say. The key will be concerns over inflation and the Fed's next move. If the Fed members were concerned about inflationary pressures and overly optimistic about economic growth, we may see the bond market move lower and mortgage rates higher tomorrow afternoon. However, if they indicate a likelihood of another rate cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.

Overall, I believe that it is going to be an active week for the mortgage market, particularly the first half. Friday will be the least important day of the week and either tomorrow or Wednesday will be the most important. I expect to see plenty of movement in rates the first couple of days, possibly afternoon revisions also, so please be careful and maintain contact with your mortgage professional if you have not locked an interest rate yet.

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 were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Market Snapshot

Monday's bond market opened in negative territory but has returned to flat. The stock markets are relatively calm with the Dow up a few points and the Nasdaq down a few points. Though the Fannie Mae bond market is flat this morning, it's currently 25 basis points better than Wednesday's close and rates this morning reflect the improvement.

Lock or FLoat?

I am still mantaining a bias toward locking.  The market will, at some point, reverse. We've had an amazing twist of economic events that have caused a flight-to-quality. But mortgage bonds have tested resistance at 102.56, the intra-day high of 3/19/09, and have been beaten back repeatedly. Couple that with a negative stochastic cross-over and it certainly looks as though bond prices are moving sideways at best and may be poised for reversal.

Today's Mortgage Market News 

There are five pieces of economic news that may affect mortgage rates this week, with data scheduled for release each day except today. The fact that the bond market was unable to follow-thru on Friday's rally concerns me that we may have some resistance in breaking current levels in the bond market. That shifts the risk versus reward calculations for locking or floating a rate, at least short-term. This doesn't necessarily mean that I feel rates will move higher in the immediate future. It simply means that the risk of floating a rate outweighs the potential gain of doing so. With little possible reward, why take the risk?

The Institute for Supply Management (ISM) will post their manufacturing index for November late tomorrow morning. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a decline in sentiment from October to November. October's reading was previously announced as 55.7. A weaker reading than the expected 54.8 would be good news for the bond market and mortgage rates. A reading below 50 means that more surveyed trade executives felt business worsened during the month than those who felt it had improved. The lower the reading the better the news for bonds because waning sentiment indicates a slowing manufacturing sector and makes a broader economic recovery less likely.

Overall, the most important day this week is Friday with monthly employment figures being released, but we may also see sizable movement in rates tomorrow. If Friday's Employment report reveals stronger than expected results we may see rates spike higher that morning, possibly erasing any gains during the week. It will probably be the key to rates moving lower or higher for the week. I suspect it will be a fairly active week for the markets and mortgage pricing, so it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

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... 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 were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Market Snapshot

Wednesday's bond market has opened has opened in negative territory following the release of stronger than expected economic data. The stock markets are showing minor gains with the Dow up 22 points and the Nasdaq up 6 points. The bond market is currently down 3 basis points and 30 year fixed rates, posted at 12:21 EST, were the same as Tuesaday's close. 

Float or Lock?

If you are purchasing and closing within the next 30 days or if you are refinancing and hoping to take advantage of the historically low rates, then take a look at the chart below. It's a Japanese Candlestick Chart of the Fannie Mae 4.5% bond. Each candlestick represents a day, and the chart covers the last 90 days, earlier to the left and today to the far right. Green vertical candlesticks represent advances in bond prices and subsequently lower rates. Red vertical candlesticks represent lower bond prices and higher rates. Of critical importance to today's chart are the two strong horizontal lines running across the top of the chart. Those lines represent overhead resistance. First you will note that the bond price is the best it’s been in the last 90 days. But more importantly you'll notice that the bond hit the resistance line yesterday and then bounces back. The top of the thicker portion of the green candlestick represents where the bond closes and the thinner part of the candlestick represents the intra-day high. Note that again today the bond tested the ceiling and then retreated. So the $64 thousand dollar question is this: "Am I willing to gamble that the bond, against the odds, will break above resistance?" If so, float. If not, lock. Historically, when the bond hits this type of resistance and fails to break through, a fairly rapid decent (higher rates) follows.

Today's Mortgage Market News

The first of today's four relevant reports was October's Durable Goods Orders that showed a 0.6% decline in new orders for big-ticket items. This was much lower than the 0.5% that was expected, but this particular report is known to show quite a bit of volatility from month-to-month. So a wide variance does not necessarily mean a big change to mortgage rates, but this morning's news can be considered favorable for bonds and mortgage pricing.

The second report of the day was October's Personal Income and Outlays data. It revealed a 0.2% rise in income that was expected, but a 0.7% increase in spending that exceeded forecasts. That means consumers spent more than many had thought, increasing the possibility of economic growth. This is bad news for bonds and mortgage rates because an expanding economy usually raises inflation concerns and makes mortgage-related bonds less attractive to investors.

The revised November reading to the University of Michigan Index of Consumer Sentiment came in at 67.4. This was slightly higher than expected, meaning consumers felt better about their own financial situations than many had thought. That can be considered bad news for bonds, however, this was not enough of a variance to affect mortgage rates.

The final report of the day was October's New Home Sales. It showed that sales of newly constructed homes rose 6.2% last month, greatly exceeding forecasts. As with Monday's Existing Home Sales report, this data indicates that the housing sector is strengthening at a quicker pace than many had thought. That is bad news for bonds and mortgage rates because a recovering housing sector makes a broader economic recovery more likely.

Also worth noting was a surprise drop in new claims for unemployment benefits filed last week. The Labor Department said that 466,000 new claims were filed last week, falling well below forecasts and their lowest total since September of last year. Fortunately this data is not considered to be highly important, but its results did somewhat influence the stock markets and bond trading this morning.

Yesterday's 5-year Note auction went very well, raising optimism about today's 7-year Note sale. As with yesterday's auction, results will be posted at 1:00 PM ET. If there was a strong demand from investors, we could see bond prices rise again during afternoon hours, possibly leading to improvements in mortgage rates. But a lackluster interest in the sale could lead to higher mortgage pricing.

The FOMC minutes that were released yesterday afternoon didn't really give us any surprising news, but did appear to be more optimistic about the economy than during previous meetings. The Fed raised their estimates for next year for overall economic activity (GDP reading) and lowered predictions for the unemployment rate. This means that they think economic activity will be better than previously thought and that unemployment will not be as bad as previously estimated. Those can be considered negative points for bonds and mortgage rates, but the strength of the 5-year Note auction yesterday prevented bonds from reacting negatively.

The financial markets will be closed tomorrow in observance of the Thanksgiving Day holiday. There will not be an early close today, but they will close early Friday afternoon and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home and there is no relevant economic news scheduled for release. Banks have to be open Friday, but we will likely see little change to mortgage rates that day.

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... 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 were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Be Carerful: The road to higher rates is paved with the dry bones of those who tried to time the bottom of the market!

Thursday's bond market opened in positive territory following early stock losses that have made bonds more attractive to investors. The stock markets are showing sizable losses with the Dow down 90 points and the Nasdaq down 34 points. The bond market is currently up 3 basis points. Initially rates came out in line with Wednesday's close but at 3:32 EST we posted an improvement of .125% to discount points.

The Conference Board posted their Leading Economic Indicators (LEI) late this morning, announcing a 0.3% increase. This was a little weaker than the 0.4% that was expected, but not enough of difference to influence this morning mortgage rates. That data indicates that economic activity is expected to increase moderately over the next three to six months. That is acceptable to bonds, as many economists and the Fed expect the economy to expand slowly.

The Labor Department said this morning that 505,000 new claims for unemployment benefits were filed last week. This was very close to forecasts and also has had little impact on this morning's bond trading and mortgage pricing.

There is no relevant economic news scheduled for release tomorrow. Therefore, look for the stock markets to again influence bond trading and possibly mortgage rates. If stocks fall further, bonds should rise, leading top downward revisions to mortgage rates tomorrow.

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... 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 were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Wednesday's bond market opened in negative territory despite some extremely favorable economic news. The stock markets are also in negative ground with the Dow down 11 points and the Nasdaq down 11 points. The bond market is currently down 6 basis points. Rates came out at 11:00 AM slight worse than yesterday's close, but at 1:00 PM we posted a rate improvement of .125% to discount points.

Lock Strategy

The downward rate trend is running out of steam and I highly recommend that anyone floating should lock. The Fannie Mae bond has run up against resistance in consecutive days and has broken through. Combine that with a negative stochastic crossover and the technicals clearly point to higher rates. On approved applications you can lock until 9:00 PM.

This morning's major economic news was the release of October's Consumer Price Index (CPI). It revealed a 0.3% increase in the overall reading and a 0.2% rise in the more important core data reading. Both of these figures were stronger than expected, indicating that prices at the consumer level of the economy rose more than thought. This can be considered bad news for bonds and mortgage rates because it raises concerns about inflation in the economy. Inflation is the number one nemesis of the bond market because it erodes the value of a bond's future fixed interest payments. This leads to bond selling and higher mortgage rates.

The second report of the day was October's Housing Starts. It showed a surprisingly large drop in starts of new construction homes. The 10.6% decline in starts drops them to their lowest level in six months and is a setback for those who felt the housing sector may be strengthening. Unfortunately for mortgage shoppers, the negative CPI news is much more important to the markets than the favorable housing data is. There, this data has had little impact on this morning's mortgage rates.

The Conference Board will release its Leading Economic Indicators (LEI) late tomorrow morning. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.4% increase, meaning economic activity will rise over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to vary greatly from forecasts for it to affect mortgage rates.

We will also get weekly unemployment figures from the Labor Department tomorrow morning. However, unless there is a wide variance between the number of claims announced and forecasts of 504,000, I don't think this report will have much of an influence on bond trading or mortgage pricing.

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... 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 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 opened in the negative territory despite some extremely favorable economic news, improved around mid-day and then closed down 12 basis points. Remember, when bond prices go down (as they did today) rates go up. Rates initially came out a little higher than yesterday's close and then improved around 1:00 PM in line with yesterday's close.  The drop in the bond price happened too late in the day for a re-post worse, so this is a great opportunity to lock before rates come out worse in the morning.

On a technical note, mortgage bonds are overbought meaning a rate reversal is likely as bond traders begin to sell.

My advice is that clearly we've seen a great run over the past several days as this is THE opportunity to lock and take advantage. Pre-approved loans can be locked up until 9:00 PM this evening.

The Labor Department gave us the first and more important of today's two relevant economic reports. They announced that the Producer Price Index (PPI) rose 0.3% last month, falling short of expectations. However, the big news was the core data reading that fell 0.6% when it was expected to rise 0.1%. This means that inflationary pressures at the producer level of the economy were well below what analysts had thought. That is very good news for bonds and mortgage rates, but it appears that the bond market was not too impressed with this morning's news.

The second report of the morning was October's Industrial Production data. It showed that output at U.S. factories, mines and utilities rose only 0.1% when it was expected to rise 0.4%. This is also good news for bonds because rapid increases in manufacturing activity indicates a strengthening economy.

There are again two reports scheduled for release tomorrow. October's Consumer Price Index (CPI) will be released at 8:30 AM ET tomorrow. This index is similar to today's PPI, except it measures inflationary pressures at the more important consumer level of the economy. The overall reading is expected to show an increase of 0.2% while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while larger than forecasted increases could lead to higher mortgage rates tomorrow.

Tomorrow's second report is October's Housing Starts. This data gives us an indication of housing sector strength, but usually does not have a noticeable impact on mortgage rates. I don't expect this month's version to be any different unless it varies greatly from analysts' forecasts and the CPI matches expectations. It is expected to show a small increase in starts of new homes.

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... 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 were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Call Your Friends and Family - Today's the Day!

Monday's bond market opened in positive territory despite early stock gains and mixed economic news. The stock markets are kicking the week off in positive ground with the Dow up 110 points and the Nasdaq up 25 points. The bond market is currently up 31 basis points and resting right against overhead resistence which happens to be the intra-day high of 8 October, the best bond market day since May when rates were at their historical best.  What's this mean? It means that if you are purchasing you've picked the perfect time and if you are refinancing NOW is the time to lock. We have posted two rate improvements since rates were initially posted at 11:43 AM.

The Commerce Department reported this morning that October's Retail Sales rose 1.4%, exceeding forecasts of a 0.9% increase. At first look, this headline number is bad news for bonds. However, two factors prevented the bond market from selling. The first was a sizable downward revision to September's sales that indicated consumers were spending even less than previously thought. Last month's estimate was a decline of 1.5% in sales, but it now believed that sales fell 2.3% that month. The second piece of positive news was the reading that excludes October's more volatile auto sales. With those transactions excluded, sales rose only 0.2%, which was weaker than the 0.4% that was expected. So, today's report can't really be considered favorable or negative for bonds and mortgage rates. Its impact has been fairly neutral.

Fed Chairman Bernanke is making a lunchtime speech to the Economic Club of New York today. I don't believe that we will see too much reaction to his speech, but the possibility always exists whenever he speaks. Therefore, we should not ignore it, but if we see the markets move noticeably between noon and 12:30 PM ET, it likely is a result of something he said.

There are two reports scheduled to be posted tomorrow morning. The first is October's Producer Price Index (PPI) that is one of the two key inflation readings this week. The PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If it reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and should drive mortgage rates higher. If we see in-line or weaker than expected numbers, mortgage rates should fall tomorrow. Current forecasts are calling for an increase of 0.5% in the overall reading and a 0.1% increase in the core reading.

Tomorrow's second report is October's Industrial Production data. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.4% increase in production. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this data is not as important as the PPI readings are.

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... 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 were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Friday's bond market opened flat but is currently up 22 basis points following favorable consumer confidence news and another infusion of Fed Capital. The stock markets closed the week up with the Dow up 73 points and the Nasdaq up 19 points. Rates came out at 11:00 AM in line with yesterday's close, but becasue of improving markets we have re-posted twice with a total reduction in discount points of .25%.

Important Note: As we've said before, mortgage interest rates are low NOT because the Fed lending rate is low. Though the same market force may effect both there is no direct correlation. Rates are low because the Federal Reserve has propped up the Fannie Mae bond market by purchasing over a trillion dollars in mortgage backed securities (MBS). But note, in October the Fed was purchasing about $17B a week and in November that dropped to $14B a week...and what happened? Rates went up. The Fed MBS purchase program is slatted to end in March 2010 capping at $1.25 trillion. So there are good and bad bond days depending on economic news, bond investment interest and stocks. But the trend is that rates are going up.  We've hit a low this week, but its not as low as in early October. I say all of this because I know there are a lot of folks sitting on the fence, many who missed their chance earlier to refinance. Rates are in a great spot and I don't want to see anyone miss the opportunity again. My advice is that you take advantage of this low point for rates.

September's Goods and Services Trade Balance report was posted this morning, giving us the size of the U.S. trade deficit. It revealed a deficit of $36.5 billion that exceeded forecasts by a wide margin. Fortunately for mortgage rates this data is not considered to be highly important to the markets.

The second report of the day was the University of Michigan's Index of Consumer Sentiment for November. It came in with a reading of 66.0, falling well short of analysts' expectations. This was good news for bonds because it indicated that consumers were much less optimistic about their own financial situations than many had thought. That means they are less likely to make large purchases in the near future, limiting fuel for economic growth.

Yesterday's 30-year Treasury Bond auction drew a lackluster interest from investors. Many of the readings used to measure investor demand fell short of recent sales. This means that investors are leery of purchasing long-term debt from the U.S., but mortgage-related bonds faired well despite the news. This led to many lenders revising rates lower late yesterday or this morning.

Next week is much more active in terms of economic releases than this week was. We do have important data being posted Monday morning when the Commerce Department will release October's Retail Sales data. This is a very important release because it gives us a measurement of consumer spending. Since consumer level spending makes up two-thirds of the U.S. economy, any related news is watched closely.

The rest of the week gives us additional important reports such as the two key inflation indexes. Look for more details on those and the rest of next week's events in Sunday's weekly preview.

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... 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 were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Happy 234^th Birthday U. S. Marine Corps  - 10 Nov 1775 – 10 Nov 2009 - Semper Fi - Birthday Message

Tuesday's bond market has opened in positive territory despite early gains in stocks. The stock markets are extending yesterday's rally, but by a much less margin. The Dow is currently up 27 points while the Nasdaq has gained 4 points. The bond market is currently up 9/32, which should improve this morning's mortgage rates by approximately .125 of a discount point.

There is no relevant economic data scheduled to be posted today. However, we do have the 10-year Treasury Note sale to be concerned with. The markets will be gauging investor interest in this sale, particularly from international buyers. If the sale is met with a decent demand from investors, indicating a strong appetite for U.S. debt, we may see bond prices rise during afternoon trading. If this is the case, mortgage rates will likely revise lower. But, a weak interest in the auction could lead to higher mortgage pricing later today. Results of the sale will be posted at 1:00 PM ET.

I find it interesting that the bond market has had little reaction to the stock market rally. This could mean that bond traders are not impressed and not concerned about further increases. This bodes well for mortgage rates because if stock gains are not a concern, or better yet stocks pull back, we could see a sizable bond rally. There are some analysts who feel the stock rally is running out of steam. If this is true, we may by in store for a sizable rally in bonds and improvements to mortgage rates in the immediate future.

The bond market is closed tomorrow in observance of the Veterans Day holiday, however the stock markets will be open. There is no early close scheduled for today that precedes some holidays, so I don't expect the holiday to affect today's trading. Many lenders will also be closed tomorrow, but those that will be open will probably not issue new rates until Thursday morning.

The only factual economic data scheduled for release Thursday are weekly unemployment figures from the Labor Department. They are expected to show that 510,000 new claims for benefits were filed last week. This would be a slight change from the previous week's total, but since this data tracks a only week's worth of new claims it likely will not impact bond trading enough to affect mortgage rates. It will require a wide variance between forecasts and the actual number of new claims to see mortgage rates react to this data.

The week's only two economic reports are scheduled to be posted Friday morning. Neither of them are considered to be highly important, so we should not expect a noticeable movement in mortgage rates due to their results. Since it is the week's only monthly data, we may see movement in the markets after their results are posted, but I don't believe it will be enough to lead to a significant change in rates.

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 were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Thursday's bond market opened down slightly following another stock rally, but has gained momentum and is now up 15 basis points. The stock markets are showing strong gains with the Dow up 182 points and the Nasdaq up 45 points. This morning's rates came out in line with yesterday's close, but we have had a re-post better of .125% to discount points.

Note: There is an inverse relationship between bond prices and mortgage interest rates. When bond prices go up, bond yields go down and subsequently, mortgage rates go down. 1 basis point is 1/100 of a point. So if the bond price goes up 12 basis points that equates to .125% lower discount points.

This morning's release of the 3rd Quarter Productivity data gave us favorable results. It showed a spike in productivity of a 9.5% increase. This was much stronger than expected, but that is good news for bonds for this type of data. Strong levels of productivity allow the economy to grow without inflation strains. Since inflation is the number one nemesis of the bond market, any news that eases inflation concerns is considered positive for bonds and mortgage rates.

The Labor Department also gave us last week's unemployment figures, reporting that 512,000 new claims for unemployment benefits were filed last week. This was lower than forecasts and can be considered negative for bonds, but fortunately this data is not important enough to heavily influence mortgage pricing.

October's monthly employment figures will be released early tomorrow morning. This extremely important report is comprised of many statistics and readings, but the most watched ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for a 0.1% rise in unemployment to bring the national rate to 9.9%, a drop in payrolls of approximately 175,000 and a 0.1% increase in average earnings. Weaker than expected readings should rally bonds and lead to improvements in mortgage rates, while stronger than forecasted results would add fuel to the growing economy theory and likely lead to bond selling and higher mortgage rates tomorrow.

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... Float 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.

Wednesday's bond market opened in negative territory but has now climbed back to +3 as investors prepare for today's FOMC news. Stocks are also positive accross the board. The Dow is currently up 110 points while the Nasdaq has gained 12 points. Rates today are the same as yesterday's close with discount points .125% lower.

Reiteration: Mortgage interest rates are trending upward. If you are floating, waiting to refinance, be cautious. Rates change daily and there are good and not so good days.  But the lows will not be as low as several weeks ago and the highs will go higher. If you are waiting for rates to return to the historic lows, there is little in the way of economic news to support that belief. My advice would be to take advantage of these rates while they are still available.

There is no important economic data being released today. The Institute for Supply Management (ISM) said their services index fell last month, meaning that sentiment in the service sector was weaker than thought. This can be considered good news for the bond market, but this index is far less important than the ISM manufacturing index posted Monday. Therefore, its impact on this morning's trading and mortgage pricing has been minimal.

This afternoon brings us the adjournment of the two-day FOMC meeting. There is almost no possibility that the Fed raised key short-term interest rates during this monetary policy meeting. But market participants will be looking at the post-meeting statement for any indication of when the Fed may make a move. The meeting will adjourn at 2:15 PM ET, so look for any reaction to the statement to come during afternoon hours. Generally speaking, any hint of a rate increase coming relatively soon would be negative news for bonds and lead to higher mortgage rates.

Look for an update to this report shortly after the markets have an opportunity to react to the statement release.

Tomorrow's data is relatively important to the bond market. This report is the 3rd Quarter Productivity reading. It is expected to show a level of worker productivity during the third quarter equivalent to last quarter's final reading of 6.6%. Analysts have forecasted a 6.4% rise in worker output. A larger increase would be good news for the bond market because high levels of productivity allows the economy to expand without inflationary pressures being a concern.

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... Float 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.