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Mortgage Rate Lock advisory for New York or Florida Mortgages for Thursday, May 12, 2011

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Mortgage and Lending with Bob Amato of Empire Home Mortgage Inc

 

If you are looking for a Mortgage Professional who will give you the type of service that you deserve, contact Bob Amato (NMLS # 8632) and Empire Home Mortgage Inc. (NMLS # 44882). We answer our phones seven days a week until 9PM. Put us to the test! Our toll free number is (866) 742-5227.

 Visit our website, www.empirehomemortgageinc.com . There you can get answers to all of your financing questions, view rates and search for foreclosed properties.

 If you are considering locking in an interest rate for a New York mortgage or a Florida mortgage, read this post.

 Thursday’s bond market opened relative flat despite the release of some key economic data. The stock markets initially opened in negative ground but have since recovered most of those losses. The Dow is currently down 15 points while the Nasdaq is up 4 points. The bond market is down 1/32, but we should still see an improvement of approximately .125 of a discount point in this morning’s mortgage rates due to strength in trading late yesterday.

 This morning’s economic data gave us somewhat mixed results, but no major surprises. The Commerce Department reported that April's retail level sales rose 0.5%, falling just short of analysts’ forecasts. That makes the data neutral-to-favorable for the bond market and mortgage rates. Although, a sizable upward revision to March’s sales may have prevented the data from influence this morning’s mortgage rates.

 April's Producer Price Index (PPI) was the second piece of data posted this morning, revealing a 0.8% jump in the overall reading and a 0.3% rise in the core data. The core data is the more important of the two because it excludes prices for more volatile food and energy items, but the large jump in overall prices is worth noting. Since both of these readings were higher than expected, the data can be considered negative for the bond market and mortgage pricing because it hints that inflationary pressures may be building in the economy.

 The third release this morning was last week’s unemployment figures that showed 434,000 new claims for unemployment benefits were filed during the week. This was a sizable decline from the previous week, but still higher than expectations. This data hints that the employment sector did improve last week, but not as much as many had thought. Therefore, this data should be considered favorable for bonds and rates, but it is not important enough to significantly influence trading or mortgage pricing.

 We also have the 30-year Bond sale being conducted today. Yesterday’s 10-year Note sale went pretty well with several indicators pointing towards a strong demand from investors. If today’s sale follows suit, we could see bond prices rise again this afternoon. However, I don’t believe that we will see them improve enough to improve mortgage rates unless the stock markets fall well below current levels.

 Tomorrow morning also has multiple reports scheduled for release. The first is April's Consumer Price Index (CPI) at 8:30 AM ET. It is similar to today's PPI report, but measures inflationary pressures at the more important consumer level of the economy. These results will be watched closely and can lead to significant volatility in the bond market and mortgage pricing if they show surprises. Current forecasts are calling for a 0.4% increase in the overall index and a 0.1% rise in the core data reading. As with the PPI, the core data is the more important of the two readings.

 The second and last report is May's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend, which relates to consumer spending. If consumers are more confident of their own financial situations, they are more apt to make large purchases in the near future. This report usually has a moderate impact on the financial markets though, because it is not exactly factual data. It is expected to show a reading of 69.5, which would be a small decline from last month's final reading. If it shows a large decline in consumer confidence, bond prices could rise and mortgage rates would move slightly lower, assuming the CPI does not give us a significant surprise. The CPI is much more important to the markets than the sentiment index is, so look for it to be the biggest influence on tomorrow’s 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.

Empire Home Mortgage is a registered Mortgage Broker with the NY and Florida Banking Depts and our loans are arranged through third party providers.

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