Daily Market Update 3/9/11

Mortgage rates were unchanged Wednesday in quiet trading. The Mortgage Bankers Association weekly purchase activity index rose by 13%, while the refinancing activity index increased by 17%. Average reported 30-year fixed rates for the past week rose to 4.93%, not including fees. Results from today's 10-year Treasury auction will be released at 1:00 PM. The National Association of Mortgage Brokers (NAMB) is expected to file suit today against the Fed in an effort to prevent onerous new loan officer compensation rules from going into effect April 1. The National Association of Independent Housing Professionals (NAIHP) filed suit on Monday. The Fed rule will benefit large financial institutions at the expense of small banks, mortgage brokers, loan officers, and consumers.

Daily Market Update 3/8/11

Mortgage rates were little changed Tuesday in volatile trading. Mortgage-backed securities began the session with gains, turned lower as stocks rallied, then recovered their losses following a successful 3-year Treasury auction. No economic data will be released today.

Daily Market Update 3/7/11

Mortgage rates held steady Monday in quiet trading. No economic data will be released today. The National Association of Independent Housing Professionals (NAIHP) filed a lawsuit today against the Federal Reserve over the Fed's loan originator compensation rule scheduled to go into effect April 1. The National Association of Mortgage Brokers (NAMB) is expected to join the suit within days. The Small Business Administration (SBA) has requested a one-year delay in implementation of the rule to allow for further clarification and to study its long-term impact on consumers and small businesses. We view the rule as poorly conceived and grossly anti-competitive. If the rule is allowed to go forward in its present form, consumers can expect to pay higher mortgage costs and receive lower levels of customer service. Meanwhile, profits will soar among the industry's largest players (those "too big to fail"). For more information, please visit www.namb.org.

Daily Market Update 3/4/11

Mortgage rates inched lower Friday in extremely volatile trading following today's Employment Report for February. The economy added 192,000 jobs last month, close to expectations. The Unemployment Rate fell to 8.9% against a consensus forecast of 9.1%. Average Hourly Earnings, a proxy for wage growth, remained unchanged from January. Factory Orders rose 3.1% last month. An increase of 2.1% had been expected. Next week will be relatively quiet in terms of new economic data with the exception of Friday's report on Retail Sales. The Treasury will hold auctions of 3-, 10-, and 30-year securities over three days, beginning Tuesday. No other key data will be released today.

Daily Market Update 3/3/11

Rates faced upward pressure Thursday following the release of stronger than expected economic data. Weekly Jobless Claims fell to 368,000, well below forecast, and to the lowest level since May 2008. Productivity rose 2.6%. An increase of 2.3% had been expected. The European Central Bank (ECB) held rates unchanged, but the head of the ECB surprised investors by suggesting the central bank may raise rates at their next meeting in April to fight inflation. The Institute for Supply Management services index rose to 59.7. Readings above 50.0 indicate expansion in the service sector of the economy. Investors now turn their focus to tomorrow's release of the most important data of the month, the Non-farm Payrolls Report. Consensus forecast calls for a net job increase of 180,000 in February, with the Unemployment Rate seen rising to 9.1%. Any significant deviation from these estimates may cause volatility in the mortgage-backed securities market. No other key data will be released today.

Daily Market Update 3/2/11

Rates were little changed Wednesday in quiet trading. This morning, payroll service provider ADP projected an increase of 217,000 private sector jobs in February, above the consensus forecast of 160,000. Federal Reserve Chairman Ben Bernanke will be delivering a second day of his semi-annual testimony to Congress. The Mortgage Bankers Association weekly purchase activity index fell by 6%, while the refinancing activity index decreased by 7%. Average reported 30-year fixed rates fell to 4.84%, not including fees. The Beige Book, a survey of economic activity by the Fed's 12 regional banks, will be released at 2:00 PM.

Daily Market Update 3/1/11

Rates were little changed Tuesday following testimony by Fed Chairman Ben Bernanke before the Senate Banking Committee. Bernanke offered no indication that he was considering ending the Fed's $600 billion bond purchase program. Regarding oil prices, Bernanke said "The most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in US consumer price inflation." In economic news, the Institute for Supply Management manufacturing index rose to 61.4, beating forecast. Construction Spending fell 0.7% in January, a bit more than expected. No other key data will be released today.