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Weekly Rate Lock Advisory

This week brings us the release of six economic reports to be concerned with. Two of the reports are considered to be very important, but nearly all of the week's releases have the potential to affect mortgage rates. With reports being posted each day except Tuesday, we will likely see a fairly active week in mortgage rates.

The week's first data comes tomorrow morning with the release of two relevant reports. The first is January's Personal Income ad Outlays data at 8:30 AM ET, which gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for an increase in income of 0.4% while spending is expected to rise 0.4%. A larger than expected increase in spending would be bad news for the bond market and could drive mortgage rates higher. However, weaker than expected numbers should help push mortgage rates slightly lower tomorrow.

The Institute for Supply Management (ISM) will release th eir manufacturing index for February late tomorrow morning. This index measures manufacturer sentiment and can have a pretty large impact on the financial and mortgage markets if it varies from forecasts. It is expected to show a decline from January's 58.4 to 57.8 this month. This is important because a reading above 50.0 means more surveyed manufacturers felt business improved during the month than those who felt it had worsened, meaning likely growth in the manufacturing sector. If we see a weaker than expected reading, the bond market could rally. But, a higher than forecasted reading could lead to major selling in bonds, causing mortgage rates to rise tomorrow morning.

The Fed Beige Book is the next report scheduled for release and it will be posted Wednesday afternoon. This report details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trad ing Wednesday. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen mortgage rates slightly if it reveals any significant surprises.

There are two reports scheduled for release Thursday morning. The first is the revised Productivity index for the 4th Quarter of last year. The preliminary reading posted last month showed an annual rate of 6.2% increase in worker output. Analysts are expecting to see no change to the initial reading. Employee productivity is watched fairy closely because a higher level of output per hour is believed to mean that the economy can expand without inflation concerns.

January's Factory Orders will be posted late Thursday morning, which will give us another measurement of manufacturing sector strength. This data is similar to last week's Durable Goods, except this report covers orders for both durable and non-du rable goods. Current forecasts are calling for an increase in new orders of approximately 1.2%. A smaller than expected rise would be good news for the bond market and could lead to an improvement in mortgage rates.

The biggest news of the week comes Friday morning when one of the single most important monthly reports we see will be posted. The Labor Department will release February's Employment report at 8:30 AM ET Friday. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a large drop in payrolls and little or no increase in earnings. Current forecasts are calling for 0.1% increase in the unemployment rate to 9.8% and approximately 20,000 jobs lost during the month.

Overall, look for a fairly active week for mortgage rates. Friday is undoubte dly the biggest day of the week, but tomorrow may also bring noticeable movement in mortgage rates. It is fairly safe to label Tuesday the least important with no relevant data scheduled for release, but we may see movement in rates several days this week.

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.

Weekly Rate Lock Advisory

This week brings us the release of six pieces of economic data for the bond market to digest along with some very important testimony from Fed Chairman Bernanke. Two of the reports are considered to be of low importance, but since we have data being posted every day of the week except for tomorrow, it is likely that we will see plenty of movement in mortgage rates the next few days.

None of this week's economic data is scheduled for release tomorrow. We do, however, have Congressional testimony by Chairman Bernanke late tomorrow morning. He will be speaking to a House Financial committee about employment growth and whether further stimulus is needed. These are hot topics so his words may influence the markets and possibly mortgage rates.

Tuesday morning brings us the first of this week's data with the release of February's Consumer Confidence Index (CCI) during late morning trading. This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. Since consumer spending makes up two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from 55.9 in January to 55.0 this month. A lower reading would be considered good news for bonds and mortgage rates.

January's New Home Sales report will be posted late Wednesday morning. This is one of the least important reports of the week, and it is the sister report to Friday's Existing Home Sales release. They measure housing sector strength and mortgage credit demand, but usually do not have a significant impact on bond trading or mortgage rates. They are both expected to show an increase in sales.

Mr. Bernanke will deliver the Fed's semi-annual testimony on the status of the economy late Wednesday and Thursday mornings. He will be speaking to the House Financial Services Committee Wednesday and the Senate Banking Committee Thursday. Market participants will watch the Fed Chairman's words very closely. He is required to deliver this testimony twice a year, which is considered to be of extreme importance to the financial markets. We almost always see the markets move as a result of what he says during this testimony. Look for him to address the unemployment and housing crises specifically and their impact on the overall economy. His testimony begins at 10:00 AM ET with a prepared statement then is followed by Q & A with committee members. I am expecting to see the markets fluctuate during this session, possibly affecting mortgage rates also.

The only important data scheduled for release Thursday is January's Durable Goods Orders data. This data gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. A smaller increase than the 1.5% that is expected would be good news for the bond market and mortgage rates. This data is quite volatile from month-to-month, so large swings are fairly normal.

The first of two revisions to the 4th Quarter GDP reading is scheduled for release Friday morning. Analysts' forecasts currently call for an annual rate of growth of 5.6%, indicating that the economy was slightly weaker in the last quarter of the year than initially thought. It will be interesting to see where this figure falls and what its impact on the markets will be. Generally speaking, higher levels of activity are bad news for the bond market, while a sizable downward revision would be good news and could lead to improvements in mortgage pricing.

The last piece of data scheduled for release this week is the University of Michigan's revision to their Index of Consumer Sentiment for February. Current forecasts show this index revising slightly higher than previously thought. The preliminary reading was 73.7 and is now expected to stand at 73.9, indicating that consumer sentiment was slightly stronger than previously thought. This index is fairly important because it helps us measure consumer confidence that translates into consumer willingness to spend.

In addition to this week's economic reports and Chairman Bernanke's speaking dates, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Notes Wednesday and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates.

Overall, look for plenty of movement in bond prices and mortgage rates this week. I think we will see the most movement either Wednesday or Thursday, but Friday may be fairly active also. This would be a very good week to maintain contact with your mortgage professional, especially 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... 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.

Weekly Rate Lock Advisory

There are five economic reports worth watching this week that are likely to affect mortgage rates in addition to the minutes from the last FOMC meeting. The financial markets are closed Monday in observance of the President's Day Holiday and will reopen Tuesday morning. You may find some lenders to be open for business Monday, but I would not expect to see new rates issued until Tuesday.

Wednesday brings us three releases, including the week's least important of the five economic reports. January's Housing Starts will be posted early Wednesday morning, giving us an indication of housing sector strength and mortgage credit demand. It usually does not affect rates unless it varies greatly from forecasts. Current forecasts are calling for an increase in starts of new housing.

January's Industrial Production data will be released mid-morning Wednesday. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities and can have a moderate impact on the financial markets. Analysts are expecting to see a 0.8% increase in production from December to January. A smaller than expected rise in output would be good news and should push bond prices higher, lowering mortgage rates Wednesday.

The minutes from last FOMC meeting will be released Wednesday afternoon. Traders will be looking for any indication of the Fed's next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. This particular set of minutes could be interesting due to the wording of the last post-meeting statement. I suspect there was some debate amongst the FOMC members before releasing that statement. These minutes will likely clarify if there is a consensus amongst them or if there is disagreement about the Fed's actions or inactions. A consensus likely means a sooner change to key short-term rates. Accordingly, I am expecting some volatility in the markets after the minutes are released.

The Labor Department will post their Producer Price Index (PPI) for January early Thursday morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. It is expected to show an increase of 0.8% in the overall reading and a 0.1% rise in the core data. Good news for bonds would be a decline in both readings, particularly the core data.

Also Thursday morning will be the release of the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 0.5% increase, meaning that economic activity may rise in the near future. A smaller than expected rise would be good news for the bond market and mortgage rates.

The Labor Department will release January's Consumer Price Index (CPI) at 8:30 AM ET Friday, which measures inflationary pressures at the very important consumer level of the economy. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially on long-term securities such as mortgage-related bonds. It is expected to show a 0.3% increase in the overall index and a 0.2% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall.

Overall, the most important day of the week will likely be Friday with the CPI being released, but Wednesday and Thursday may also be active days for mortgage rates. In other words, be prepared for an active week in the markets and mortgage rates.

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.

There are only three pieces of relevant economic data scheduled to be posted this week along with a couple of Treasury auctions. Only one of the three reports is considered to be of high importance while one is moderately important. The third is not considered to be of much importance unless it varies greatly from forecasts.

None of the economic reports will be posted tomorrow or Tuesday. The first report comes Wednesday morning and is the least important of the three. That is when December's Goods and Services Trade Balance data will be posted. This report measures the U.S. trade deficit and can affect the value of the U.S. dollar versus other currencies, but it usually does not cause enough movement in bond prices to affect mortgage rates. It is expected to show a $35.0 billion trade deficit.

The most important data of the week is Thursday's release of January's Retail Sales data. This report is very important to the financial markets because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched quite closely. If Thursday's report reveals weaker than expected sales, the bond market should thrive and mortgage rates will fall. However, a stronger reading than the 0.4% increase that is expected could lead to higher mortgage rates.

February's preliminary reading to the University of Michigan Index of Consumer Sentiment will be released late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows an increase in consumer confidence, the stock markets may move higher and bond prices could fall. It is currently expected to rise slightly from January's final reading of 74.4 to 74.8 for this month.

The two important Treasury auctions come Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important one as it will give us an indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would likely result in upward revisions to mortgage rates.

Overall, look for Thursday to be the most important of the day of the week due to the importance of the Retail Sales report. But, I suspect that we may see movement in mortgage rates several days this week. I am still holding a cautious approach stance towards mortgage rates and believe that the risk of floating a rate outweighs the potential gains. Therefore, please be careful if still floating an interest rate this week.

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.

Weekly Rate Lock Advisory

This week is extremely busy in terms of economic data scheduled for release and will likely be another active week for mortgage rates. There are five economic releases scheduled for the week in addition to several speaking events for Fed and Cabinet members that may also influence the markets and mortgage rates. Four of these reports are considered to be of moderate or high importance, meaning we should see quite a bit of movement in mortgage rates this week.

The first report of the week is January's Personal Income and Outlays data tomorrow morning, which gives us an indication of consumer ability to spend and current spending habits. Current forecasts call for an increase in income of 0.3% while spending is expected to rise 0.3%. Larger increases would be good news for the stock markets and could hurt bond prices, driving mortgage rates higher tomorrow. Smaller than expected increases would be considered good news for mortgage rates.

Also schedule d for release tomorrow morning is the Institute of Supply Management's (ISM) manufacturing index. This index tracks manufacturer sentiment by rating surveyed trade executives' opinions of business conditions. It is usually the first economic data released each month and is one of this week's very important reports. Current forecasts are calling for a reading in the neighborhood of 55.2 that would be a decline from December's reading. The lower the reading, the better the news for the bond market and mortgage rates.

Employee Productivity and Costs data for the 4th quarter will be released early Thursday morning. It can cause some movement in the bond market, but should have a minimal impact on mortgage pricing. If it varies greatly from analysts' forecasts of a 6.0% increase, we may see some movement in mortgage rates. However, the markets will be much more interested in Friday's data.

Late Thursday morning, December's Factory Orders data will be posted. It is similar to last week's Durable Goods Orders release in giving us a measurement of manufacturing sector strength, but this data includes new orders for both durable and non-durable goods. It is one of the less important reports of the week, but can influence mortgage pricing if it varies greatly from forecasts.

Friday's data is by far the most important of the week. The Labor Department will post January's Employment data early Friday morning, giving us the U.S. unemployment rate and the number of jobs added or lost during the month among other related statistics. Analysts are expecting to see the unemployment rate remain at 10.0% and that approximately 13,000 new jobs were added to the economy. An increase in unemployment and a loss in payrolls would be great news for the bond market. It would probably create a bond market rally, leading to lower mortgage rates Friday morning. However, if Friday's report reveals stronger than expected results, we can expect to see mortgage rates move higher.

In addition to the factual economic data, we also have several public speaking events about the U.S. budget, monetary policy and other related topics. They are sprinkled throughout the week and can cause a market reaction if anything said surprises market participants.

Overall, look for tomorrow or Friday to be the biggest days for mortgage rates. Friday's Employment report is the most important piece of data, but we may see quite a bit of movement in rates tomorrow morning also. If we see weaker than expected results from Tomorrow's ISM report and Friday's employment data, we should see rates close the week lower than last Friday's closing levels. If the data shows stronger than expected results, we may see mortgage rates move higher for the week. This is of course, assuming that the Fed and Cabinet speeches don't reveal any surprises.

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.

Weekly Rate Lock Advisory

This week is extremely busy in terms of economic data scheduled for release and will likely be an active week for mortgage rates. The number of releases is actually irrelevant due to the importance of the some of the reports. There are seven economic releases scheduled for the week in addition to the first Federal Open Market Committee (FOMC) meeting of the year. All but two of the releases scheduled are considered to be of moderate or high importance, meaning we should see quite a bit of movement in mortgage rates this week. 

The first report of the week is tomorrow's release of December's Existing Home Sales. It gives us a measurement of housing sector strength by tracking resales of existing homes. It is one of the week's least important reports, therefore, it will likely not have a significant impact on bond trading or mortgage rates unless it varies greatly from forecasts, which are calling for a sizable decline in sales.

January's Consumer Confidence Index (CCI) will be released Tuesday morning. This report is considered to be of high-importance to the bond market and therefore can move mortgage rates. It is an indicator of consumer sentiment, which is important because a decline would be construed as a sign that consumers may be less willing to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, market participants are very attentive to related data. A reading smaller than the expected 53.5 would be ideal for the bond market and mortgage rates.

December's New Home Sales report, the sister release to Monday's Existing Home Sales, will be posted late Wednesday morning. It is expected to show an increase in sales of newly constructed homes, but is not important enough to heavily influence mortgage pricing. 

Also Wednesday is this year's first FOMC meeting. It will begin Tuesday and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to short-term interest rates, but as is often the case, traders will be looking for any indication of the Fed's next move and when they may make it. I believe that there is little chance of indicating a possible rate hike in the near future, so I don't believe that this meeting will have the influence they usually do. 

Thursday morning brings us the release of December's Durable Goods Orders. This data helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show an increase in orders of approximately 2.0%. A smaller than expected increase would be considered good news for bonds and mortgage rates. 

Next up is Friday, which has three reports scheduled for release. The first of them is arguably the single most important reports that we see regularly. The initial reading of the 4th Quarter Gross Domestic Product (GDP) will be posted early Friday morning. This data is so important because it is considered to be the best measure of economic growth. The GDP itself is the total sum of all goods and services produced in the United States. Its' results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. There are three readings to each quarter's activity, each released approximately one month apart. The first, which usually carries the most volatility, is expected to be an increase of 4.6%. A noticeably weaker reading would be great news for the bond market, questioning the pace of the economic recovery. That would likely fuel stock selling and a rally in bonds that would push mortgage rates lower Friday morning.

The 4th Quarter Employment Cost Index (ECI) is also scheduled for release early Friday morning. It measures employer costs f or employee wages and benefits, giving us an indication of the threat of wage inflation. It usually has more of an effect on the bond market than the stock markets. Current forecasts are showing an increase of 0.4%. A lower than expected reading would be favorable to bonds and mortgage rates, but the GDP reading will be the biggest influence on trading and rates Friday morning. 

The last report of the week is the revised reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer confidence, which is thought to indicate consumer willingness to spend. I don't see this data having much of an impact on the markets or mortgage rates due to the importance of the employment index and GDP figures. 

And if we didn't have enough to watch already, there are two relatively important Treasury auctions for the markets to digest. The Fed will auction 5-year and 7-year Treasury Notes Wednesday and Thursday, respectively. If they are met with a strong demand from investors, the broader bond market may rally during afternoon hours those days. However, a lackluster interest in the sales could lead to bond selling and higher mortgage rates.

Overall, look for Tuesday or Friday to be the biggest days for mortgage rates. Friday's GDP is the single most important piece of data this week, but we may see quite a bit of movement in rates Tuesday also. If we see weaker than expected results from the most important reports, mortgage rates should close the week much lower than last Friday's closing levels. If the data shows stronger than expected results, we may see mortgage rates move higher for the week. This is of course, assuming that the Fed meeting doesn't reveal any surprises. I strongly recommend that fairly constant contact is maintained with your mortgage professional this week 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. 

Weekly Rate Lock Advisory 

This week brings us the release of three pieces of economic data to digest, but only one is considered to be of high importance. It is also a shortened trading week with the stock and bond markets closed tomorrow in observance of the Martin Luther King Jr. holiday. The financial and mortgage markets will reopen Tuesday morning for regular trading hours. Accordingly, there will be no update to this report tomorrow morning.

The first two reports will be released early Wednesday morning. The Labor Department will post their Producer Price Index (PPI) and the Commerce Department will release December's Housing Starts data, both at 8:30 AM. The PPI is much more important to the markets and mortgage rates because it measures inflationary pressures at the producer level of the economy. It is the sister report to last week's Consumer Price Index (CPI) that didn't give us any major surprises. Analysts are expecting to see no change in the overall reading and a 0.1% increase in the more important core data reading that excludes volatile food and energy prices. Unexpected increases, particularly in the core reading, could mean higher mortgage rates Wednesday.

December's Housing Starts helps us measure housing sector strength and future mortgage credit demand by tracking construction starts of new homes. It is not considered to be one of the more important releases each month, so I don't see it causing much movement in mortgage rates Wednesday.

The Leading Economic Indicators (LEI) for December is the last piece of data of the week. It will be released late Thursday morning, attempting to measure economic activity over the next three to six months. It is considered to be of moderate importance to the bond and mortgage markets. Analysts are currently expecting to see a 0.7% increase, meaning that economic growth over the next few months should rise fairly rapidly. A smaller than expected increase would be good news for the bond market and mortgage rates, but a larger than expected rise could lead to bond selling and a minor increase to mortgage pricing Thursday. 

Overall, Wednesday will likely turnout to be the most important day of the week with the PPI scheduled. If it meets expectation or is lower than forecasts, we could see mortgage rates close the week lower than Tuesday's opening levels. Generally speaking, I suspect this may be a fairly quiet week for mortgage rates, at least compared to the last couple of weeks.

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 o f all/any other borrowers. 

Weekly Rate Lock Advisory 

Monday's bond market has opened in positive territory following a calm open in stocks. The major stock indexes are showing minor losses with the Dow down 5 points and the Nasdaq down 10 points. The bond market is currently up 6/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point over Friday's morning rates.

There is no relevant economic news scheduled for release today. It is the only day of the week that does not have some type of data or relevant events scheduled. The rest of the week brings us the release of six pieces of economic data to digest along with two important Treasury auctions. The most important data is being released the latter part of the week, so we will likely see the most movement in rates then.

The first economic data is also the week's least important release. November's Goods and Services Trade Balance will be posted early tomorrow morning. It measures the size of the U.S . trade deficit and is expected to show a $34.5 billion deficit. This data usually does not directly affect mortgage rates, but it does influence the value of the U.S. dollar versus other currencies. A stronger dollar makes U.S. securities more attractive to international investors because they are worth more when sold and converted to the investor's domestic currency. But unless we see a significant variance from forecasts, I don't believe this data will lead to a change in mortgage rates tomorrow.

The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET Wednesday. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises.

The two important Treasury auctions come Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important one as it will give us an indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates.

Overall, Thursday or Friday will probably end up being the most important day of the week. The single most important report is Friday's CPI, but Thursday's Retail Sales report is a close second. Both are considered to be of high importance and can heavily influence the markets. Therefore, I strongly recommend maintaining contact with your mortgage professional this week, especially the latter part if still floating an in terest rate.

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. 

This week bring us the release of only three monthly reports that are relevant to the bond market and mortgage rates, but two of them are considered to be highly important. In addition to those three reports, we also will get the minutes from the last FOMC meeting that may influence the markets and possibly mortgage rates.

The first report is the Institute for Supply Management's (ISM) manufacturing index for December late tomorrow morning. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. That indicates manufacturing sector strength rather than contraction. Analysts are currently expecting to see a 54.0 reading in this month's release, meaning that sentiment rose slightly from November's 53.6. A smaller reading will be good news for the bond market and mortgage shoppers while a higher than expected reading could lead to higher mortgage rates tomorrow morning.

The Commerce Department will post November's Factory Orders data late Tuesday morning. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted late last week, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as electronics and autos. Examples of non-durable goods are food and clothing. Analysts are expecting to see an increase of 0.5% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates. The smaller the increase, the better the news for mortgage rates.

Wednesday's only relevant news is the release of the minutes from the last FOMC meeting. This will give market participants insight to the Fed's thinking and concerns regarding inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they shouldn't affect the markets or mortgage rates until afternoon hours.

The final report of the week comes Friday morning when the Labor Department will post December's employment figures. The Employment report is considered to be one of the most important monthly releases we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a larger than expected drop in new payrolls and a small increase or even a decline in earnings would be good news for the bond market.

Current forecasts call for a 0.1% increase in the unemployment rate, pushing it to 10.1%. Analysts are expecting to see little change in payrolls from November's payrolls with earnings rising 0.2%. If we see weaker than expected results, mortgage rates should improve Friday. However, stronger than expected readings will likely push mortgage rates higher.

Overall, the key data of the week will be Friday's Employment report, but look for tomorrow and Wednesday to be important due to the economic data and FOMC minutes scheduled. If they give us favorable results, mortgage rates will likely move lower for the week. But if not, we will probably see mortgage rates move higher.

If I were considering financing/refinancing a home, I would.... Float 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.

Weekly Rate Lock Advisory 

This week brings us the release of only one piece of economic data that is considered important to mortgage rates in addition to two important Treasury auctions. It is another holiday-shortened week with the New Years Day holiday Friday, so the data may have a heavier impact on trading than usual if it varies from forecasts by much. The bond market will close early Thursday and remain closed Friday as it did last week. With that type of schedule, many traders will not be working the latter part of the week, so any unexpected news or data may lead to a larger than usual reaction in the markets.

There is no relevant news scheduled for release tomorrow. Look for any significant changes in stocks to drive bond trading and mortgage rates. If the major stock indexes remain fairly calm, it is possible that bond prices and mortgage rates may follow suit.

The first important release comes late Tuesday morning when the Conference Board will post its Consumer Confidence Index (CCI) for December. This is a pretty important release because it measures consumer willingness to spend. If consumers are more confident in their personal financial situations, they are more apt to make large purchases. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely by market participants and can have a significant influence on mortgage rate direction. Current forecasts are calling for an increase in confidence from November's reading of 49.5. Analysts are expecting Tuesday's release to show a reading of 53.0. The lower the reading, the better the news for bonds and mortgage pricing.

This week also has Treasury auctions scheduled the first three days. The two that are most likely to influence mortgage rates are Tuesday's 5-year and Wednesday's 7-year Note sales. If those sales are met with a strong demand, particularly Wednesday's auction, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates.

The bond market will close at 2:00 PM ET Thursday and all of the U.S. financial markets will be closed Friday in observance of the New Year's Day holiday. They will reopen for regular hours next Monday morning.

Overall, as we saw last week, a shortened trading week by no means translates into calmness. The thin trading often creates larger than usual fluctuations in the major indexes. Despite last week's shortened schedule, we saw plenty of movement in mortgage rates. This week likely will be the same as investors look to make year-end adjustments to their portfolios. Accordingly, I recommend keeping in contact with your mortgage professional if still floating an interest rate and closing in the immediate future.

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.