Mortgage Market update for the week of August 3rd

There are four relevant reports scheduled for release this week that are likely to affect mortgage pricing. The first important release scheduled for the week is the Institute for Supply Management's (ISM) manufacturing index for July late tomorrow morning. A reading below 50.0 means that more surveyed executives felt that business worsened last month than those who said it had improved. Tomorrow's release is expected to show a reading of 46.5, up from last month's 44.8, indicating manufacturer sentiment improved from June. A smaller than expected reading would be good news for the bond market and would likely improve mortgage rates tomorrow. However, a stronger than expected reading could lead to higher mortgage rates.

June's Personal Income and Outlays data will be posted early Tuesday morning. This report helps us measure consumer ability to spend and current spending habits. The sizable decline in June's income that is expected is simply a result of the unusual spike in May's income and not a sign of declining wages.

Wednesday morning brings us the release of June's Factory Orders data. Analysts are expecting to see an increase of approximately 0.5% in new orders. A smaller t han expected increase would be considered good news for bonds and mortgage pricing.

There is no relevant monthly or quarterly economic news scheduled for release Thursday, but Friday's data is a different story. The most important piece of data this week and arguably each month is the monthly Employment report. This report gives us the U.S. unemployment rate, number of jobs added or lost during the month and the average hourly earnings reading for July. The ideal situation for the bond market is rising unemployment, a sizable loss of jobs and little change in earnings. This report is considered to be one of the single most important releases that we see each month.

Overall, I am expecting to see another active week for mortgage rates. The most important day is Friday due to the data being released, but tomorrow is also a very important day with the ISM index scheduled for release. The rest of the week is likely to be a little calmer than Monday and Friday. We may see some pressure in bonds mid to late week ahead of Friday's employment numbers, but we also need to watch the stock markets for significant moves that can influence bond trading. Accordingly, this is a good week to maintain contact with your mortgage professional.

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

Lock if my closing was taking place within 7 days.. .

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.