City of Fayetteville
Planning Commission
Regular Meeting
January 19th, 2010
Report: Angie Hedgepeth
Governmental Affairs Consultant FRAR/HBAF
Commissioners Present:
Jim Smith – Chair
Mark Ledger – Vice Chair
Tom Speight
Bill Snuggs
Mary Lavoie
Charles Astrike
Ronald Michael
Jack Cox
What Happened: The following agenda items were discussed.
Proposed Changes to the Notification Area for Zoning Cases – The city staff is recommending that the rezoning notice area for a piece of property be dropped back to 500 feet versus the current 750 foot radius. The main reasons are cost and manpower savings with minimal impact on community awareness. Charles Astrike made a motion to revert back to the 500 feet notice area. The motion PASSED unanimously.
What Was Said:
Craig Harmon (City Planner) – “We don’t see a significant payback with 750.”
Charles Astrike – “We tried to fix something that wasn’t broke.”
Sign Ordinance – The following information comes directly from Karen Hilton’s (Planning and Zoning Division Manager) Memo to the Commission.
Regretfully, staff has had limited opportunity to refine specific standards or to recopy previous materials. Some additional specifics will be present at the meeting. The following is a short recap of major changes previously discussed. The primary approaches that have been discussed are.
1a. Prohibit new pose signs, relying on ground/monument and wall signs, or
1b. Reduce the size, number, and height of pole signs
2. Reduce the size and number of ground/monument signs
3. Do not allow both pole and ground/monument signs for a development or site
4. Reduce the number of temporary signs for special events and require deposits
5. *Increasing the area allowed for wall signs
a. when no pole or ground sign is provided/allowed
b. for buildings more than 3 stories
David Steinmetz (Inspections) gave a power point of Ramsey Street and pointed out the various sizes of signs on Ramsey. At the end of the discussion Mark Ledger made a motion to suspend the Sign Ordinance discussions until the Planning Commission recommends the Unified Development Ordinance to the City Council. Commissioner Bill Snuggs seconded and the motion PASSED. Mary Lavoie voted in opposition.
City Attorney – “Amortization does need to comply with the cost of the sign.”
Jack Cox – “Do we have signs that we give special permission to stay up? What about the Northwood Temple sign? Is it conforming?”
David Steinmetz – “We give special permission for the Tallywood sign and yes the Northwood sign is conforming.”
Cox – “Except for the rotation of the lights.”
Jim Smith – “He is at the Department of Transportation limits.”
Smith – “We hear a lot about Cary. I was riding through Apex from Highway 64 to Avent Ferry and there was not one pole sign. We should have no more pole signs from this point forward and attrition for everything else. Don’t mess with existing conforming and retrofitting is hard. The sign has become a crutch. I don’t think we use signs like we used to.”
Cox – “We are looking at February 16th to review a draft. We haven’t come close. We’ve got to make a stand even if it’s something stupid.”
Tom Speight – “Let’s take a look at the Apex Ordinance.”
Mark Ledger – “I’m weary of all the detail. With the UDO and the heavy workload from the Advisory Committee it’s a lot to digest. We’ve covered a lot of territory and I think we are not going to be effective until after the UDO.”
Smith – “Give us time to look at the Apex Ordinance and a chance to look at what we need to include digital. Let’s slow it down and not try to fast tract it.”
What’s Next:
January 28th – Unified Development Ordinance Advisory Committee - Wrap Up Meeting with the Advisory Committee
CONTACT: Mickey Phillips
Century 21 Family Realty
Fayetteville, North Carolina–Mickey with Century 21 Family Realty has been awarded the Accredited Buyer’s Representation (ABRâ) designation by the Real Estate Buyer’s Agent Council. (REBAC) of the NATIONAL ASSOCIATION OF REALTORSâ (NAR).
Mickey Phillips joins more than 30,000 real estate professionals in North America who have earned the ABRâ designation. All were required to successfully complete a comprehensive course in buyer representation and an elective course focusing on a buyer representation specialty, both in addition to submitting documentation verifying professional experience.
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Monday's bond market has opened down slightly despite a much weaker than expected housing report. The stock markets are posting minor gains with the Dow up 25 points and the Nasdaq up 5 points. The bond market is currently down 2/32, but we will still likely see an increase in this morning's mortgage rates of approximately .125 - .250 of a discount point due to weakness late Friday.
The National Association of Realtors reported late this morning that home resales fell a whopping 16.7% last month. Analysts were expecting to see a sizable decline in sales, but this was much larger than thought. The surprising drop indicates that the housing sector still is not stable, which is good news for the bond market and mortgage rates. Some of the loss is being attributed to the initial expiration of the home buyer tax credit, but I don't believe many analysts are blaming the entire loss on that factor. This raises further concerns about the housing sector and mak es a broader economic recovery less likely to be in the near future.
The rest of the week is extremely busy in terms of economic data scheduled for release and will likely be an active week for mortgage rates. There are six more relevant economic releases scheduled for the week in addition to a Federal Open Market Committee (FOMC) meeting.
January's Consumer Confidence Index (CCI) will be released late tomorrow 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.
And if we didn't h ave 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 tomorrow 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 tomorrow 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.
The Arts Council’s 31st Annual International Folk FestivalSeptember 25 – 27, 2009
“When we dance in the streets, we dance together, regardless of color, race, status, enjoying ourselves and sharing a love for great music, food and fun!” Trinidad poet Fayetteville has a rich and long history of celebrating its multicultural population. Years ago, a group of forward thinking citizens got together to create the International Folk Festival as a celebration of our diversity. Now in its 31st year, the International Folk Festival has become a weekend long celebration.
Friday, September 25
7-9 p.m.
301 Hay Street
Fourth Friday
Join us for the opening of Cultural Expressions, a juried art competion. Live entertainment and vendors on the streets. Refreshments.
Saturday, September 26
Parade of Nations, 11 a.m.
Hay Street
All the pagentry and color of the world right here in our community.
Festival Park and surrounding area, noon to 6 p.m.
Enjoy live entertainment on five stages, authentic cuisine at the International Cafe, unique arts and crafts vendors, Blue Marble Children's Area and more!
Sunday, September 27
Noon to 6 p.m.
The fun continues with live entertainment, the International Cafe, vendors and children's area. The festival culminates with a Dance Party in the Park featuring the music of the Tropic Culture Band! You won't want to miss this!
Friday's bond market has opened in negative territory with little to drive trading. The stock markets are showing minor gains with the Dow up 36 points and the Nasdaq up 3 points. The bond market is currently down 7/32, but we will likely see little change in this morning's mortgage rates due to strength late yesterday.
There is no relevant economic news scheduled for release today. Look for the stock markets to be the biggest influence on any swings in bond trading or mortgage rates this afternoon. As long as the stock markets remain fairly calm, mortgage rates will likely follow suit. However, this may be difficult because today is known as Quadruple Witching day in the stock markets. This is where stock index futures and options, stock options and individual stock futures all expire. As those options are executed throughout the day, it is common to see wide fluctuations in stocks. If the major stock indexes show sizable losses, bonds may benefit. If the indexes move higher, extending their recent rally, we could see changes to mortgage rates this afternoon.
Next week is fairly active in terms of economic releases and related events. There is a moderately important report being posted Monday morning that may slightly impact mortgage rates if it varies from forecasts. August's Leading Economic Indicators will be released late Monday morning. It attempts to predict future economic activity over the next three to six months. It is expected to show a 0.7% increase, meaning that economic activity will likely rise fairly rapidly in the coming months. A smaller than expected reading would be considered good news for bonds and mortgage rates.
The rest of the week is also pretty busy. There is not an abundance of economic reports scheduled for release, but we do have another FOMC meeting and a couple of relevant Treasury auctions on the calendar that may affect mortgage pricing. Look for more details on next week's events in Sunday's weekly preview.
Monday's bond market has opened in negative territory despite a flat morning in stocks and no economic data on today's calendar. The stock markets are calm with the Dow down 8 points and the Nasdaq nearly unchanged from Friday's close. The bond market is currently down 8/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.
This week brings us the release of five relevant economic reports that may influence mortgage rates, but none of them are scheduled for release today. A couple of the reports are considered to be highly important to the financial and mortgage markets, meaning that we may see significant changes to rates this week. There is a very good chance of seeing noticeable changes in rates at least one day, if not several days this week.
There are two highly important reports being released early tomorrow morning. The first is the release of August's Retail Sales report. It will giv e us a measurement of consumer spending, which is very important to the markets because consumer spending makes up two-thirds of the U.S. economy. Current forecasts are calling for a 1.9% increase in sales. The sizable jump is expected to come from auto sales that were fueled by the Cash For Clunkers program. Analysts are calling for a 0.4% rise in sales if auto sales are excluded. A larger than expected increase would be considered bad news for bonds and likely lead to an increase in mortgage pricing tomorrow.
The second important piece of data is the release of August's Producer Price Index (PPI), also being posted early tomorrow morning. This report will give us a very important measurement of inflationary pressures at the producer level of the economy. There are two readings that analysts follow in this release. They are the overall index and the core data reading. The core data is the more important of the two because it excludes more volatile food and ene rgy prices. Analysts are currently predicting a 08% increase in the overall index, and a rise of 0.1% in the core data. Stronger than expected readings could fuel inflation concerns in the bond market and lead to an increase in mortgage rates tomorrow morning. Both of the day's reports are considered to be extremely important to the markets and mortgage rates.
Overall, I think we need to label tomorrow as the most important day of the week with the Retail Sales and PPI reports both being posted that day. However, Wednesday's CPI release is also extremely important to the markets, so Wednesday cannot be ignored either. We could see a significant change to rates this week if the major reports vary greatly from forecasts.
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 da ys... 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 brings us the release of five relevant economic reports that may influence mortgage rates. A couple of these reports are considered to be highly important to the financial and mortgage markets, meaning that we may see significant changes to rates this week. There is a very good chance of seeing noticeable changes in rates at least one day, if not several days this week. There is no relevant news scheduled to be posted tomorrow, so look for the stock markets to be the biggest force behind bond trading and changes to mortgage rates until we get to the data releases.
There are two highly important reports scheduled to be posted early Tuesday morning. The first is the release of August's Retail Sales report. It will give us a measurement of consumer spending, which is very important to the markets because consumer spending makes up two-thirds of the U.S. economy. Current forecasts are calling for a 1.9% increase in sales. The sizable jump is expected to come from auto sales that were fueled by the Cash For Clunkers program. Analysts are calling for a 0.4% rise in sales if auto sales are excluded. A larger than expected increase would be considered bad news for bonds and likely lead to an increase in mortgage pricing.
The second important piece of data Tuesday morning is the release of August's Producer Price Index (PPI). This report will give us a very important measurement of inflationary pressures at the producer level of the economy. There are two readings that analysts follow in this release. They are the overall index and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Analysts are currently predicting a 08% increase in the overall index, and a rise of 0.1% in the core data. Stronger than expected readings could fuel inflation concerns in the bond market and lead to an increase in mortgage rates Tuesday morning. Both of th e day's reports are considered to be extremely important to the markets and mortgage rates.
August's Consumer Price Index (CPI) will be released Wednesday morning. The CPI is one of the most important reports we see each and every month. It is considered to be a key indicator of inflation at the consumer level of the economy. As with its sister PPI report, there are two readings in the report- the overall index and the core data reading. Current forecasts are calling for a 0.3% increase in the overall reading and a 0.1% rise in the core data reading. A larger increase in the core data would likely lead to higher mortgage rates Wednesday morning.
Also scheduled for Wednesday morning is August's Industrial Production data. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important but could help change mortgage rates if there is a significant difference between forecasts and the actual reading. Analysts are currently expecting to see a 0.7% increase in production. A higher level of output could lead to higher mortgage rates, while a weaker than expected figure would be considered good news for bonds and rates.
August's Housing Starts report will be posted early Thursday morning. This report will probably not have much of an impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand, but is usually considered to be of low importance to the financial markets. It is expected to show little change between July's and August's starts.
Overall, I think we need to label Tuesday as the most important day of the week with the Retail Sales and PPI reports both being posted that day. However, Wednesday's CPI release is also extremely important to the markets, so Wednesday cannot be ignored either. Monday or Friday wil l probably end up being the calmest days, but we still may see minor changes to rates those days. But we could see a significant change to rates this week if the major reports vary greatly from forecasts.
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.
Fayetteville Unified Development Ordinance
Advisory Committee Meeting
09/01/09
Present: Jimmy Kizer, Butch Dunlap, Gordon Rose, Chuck Gore, Doug Peters, Mark Ledger, Jon Parson, Karl Legatski Others: John Gillis, Jackie Trinchitella, city staff
What Happened: Rob Anderson (Chief Development Officer) said the staff is currently testing module 3 of the UDO. He said he would like to have the ordinance ready for a city council presentation around the first of the year. It was discussed on how to proceed with digesting the information. A group decision was made to meet on the 1st Tuesday @ 5:15 and the 3rd Thursday @ 5:15. During these sessions the committee will break down the following articles in the ordinance.
From Section 30-5 DEVEOPMENT STANDARDS – Module 3
1st meeting A. Off-Street Parking, Loading, and Circulation
2nd meeting B. Landscaping and Tree Protection Standards
3rd meeting C, D & E – Open Space Set-Asides, Fences & Walls, Exterior Lighting
4th meeting F. Community Form Standards
5th meeting G. Single-Family Design Standards plus 30-6 (Subdivisions)
6th meeting H, I & K – Multi-Family Design Standards, Commercial, Office, and Mixed Use Design Standards & Transitional Standards
7th meeting J, L & M – Large Retail Design Standards, Signage & Traffic Impact Analysis
What’s Next: Clarion & Associates (Consultants who wrote the UDO) will be in attendance at a special meeting with the Advisory Committee on September 14th @ 11:30 p.m. The purpose of the meeting will be for Clarion to receive feedback from the group on the UDO and to answer any questions they may have. Jimmy Kizer (Engineer) said he would like to know what is the driving force for this change and what are they using as their source of information. Everyone was in agreement that these questions should be the segway into the meeting.
Rob Anderson – “We’ve all done a lot of work to get where we are today. Unfortunately it is going to take a lot more time to get through this kind of like Gallo...no wine before it’s time. We want there to be a sense of urgency still. Somewhere around the first of the year. My goal is to get to the end of this with 6 or 8 real things that you’ve got to have and 6 or 8 things we’ve got to have. You’re not going to get everything and we’re not going to get everything. Fair is fair.”
Marsha Bryant (City Planner) – “We’ve started case studies on Module 3 and we are lost.”
Wednesday's bond market has opened in negative territory following early stock gains. The stock markets are extending yesterday's gains with the Dow up 60 points and the Nasdaq up 24 points. The bond market is currently down 8/32, but we will likely see little change in this morning's mortgage rates.
There is no relevant economic news scheduled for release today. The first release of the week comes tomorrow afternoon. The Federal Reserve will release its Beige Book report at 2:00 PM ET tomorrow. This report details current economic conditions in the U.S. by region. It is believed to be a key source of data when the Fed meets for their FOMC meetings and is usually released approximately two weeks prior to each meeting. If it reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed's next move. Most likely though, it will be a non-event and will not lead to a noticeable change in mortgage rates.
Also tomorrow is the 10-year Treasury Note auction, which will be followed by the 30-year Bond auction Thursday. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. But, if the sales are met with a decent demand from investors, those losses are normally recovered after the results are announced. The results will be posted at 1:00 pm ET each day. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading tomorrow and Thursday.
I am expecting the stock markets to influence bond trading and mortgage rates tomorrow morning. We may see weakness in bonds prior to the Treasury auction that may also put some pressure on mortgage rates. But we will likely see little change in rates until tomorrow afternoon.
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.
GOVERNMENTAL AFFAIRS - Fayetteville City Council UDO BriefingFayetteville City Council
Unified Development Ordinance Briefing
5:00 – 5:30 p.m.
August 19, 2009
Governmental Affairs Consultant FRAR/HBAR
Present: Mayor Chavonne, Councilwoman Applewhite, Councilmen Bates, Hurst, Crisp and Mohn
Staff: Karen Hilton (Assistant Planning Director)
Rob Anderson (Chief Development Officer)
Craig Hampton (Planner)
Management
Others: Press, Kady Ann Davy (Candidate for City Council District 2), John Gillis
What Happened: Hilton passed out an overview of the major tasks that will take place with the UDO. They are as follows.
a. Text
b. Testing – “calibration” for districts and for local site/development characteristics
c. Processes – Administrative Manual, forms; “publication”;interface with Magnet
d. Mapping – Initially as part of testing, then from January 2010 – July 2010
e. Community Information – Growing awareness; information meetings; hearings
Hilton – “You won’t see all of the open space. They didn’t put the amount in.”
Bates – “Is it contiguous or 10 square feet in between.”
Hilton – “The open space should be usable. Now is recreational space, clubhouse etc. In the UDO it is very collective and there are at least 4 big parts. 1. Buffers, 2. Streetscape, 3. Required active recreation. There is a series of standards which includes stormwater. It takes in everything.”
Hilton – “Subdivisions don’t change dramatically but guarantees performance (Article 5) the standards are raising the bar.”
Anderson – “The new code is enhancing the project, connectivity and urban design neighborhood developments. There is a point system if you’re doing something expensive. There will be give and take and we are not done with that dialogue. We are not raising the bar unreasonably.”
Hilton – “We will put in place options to earn density that currently people are uncomfortable with.”
Applewhite – “In single family home developments will you be able to cut through and put up condos?”
Hilton – “It is infill we are wrestling with, zero lot line, group development. Less than 3 acres is most uncomfortable and feels intrusive. For zero lot line you have a special process.”
Hilton said the consulting team of Clarion and Associates will be meeting with the UDO Advisory Committee on September 14th. The meeting time and location have not been announced but Hilton did say the meeting would be 2.5 hours long.
On September 14th from 4:30 – 6:00, the consultants will be meeting with the City Council before their regular meeting.
Friday's bond market has opened down sharply following stronger than expected housing news and a strong opening for stocks. The Dow is currently up 123 points while the Nasdaq has gained 23 points. The bond market is currently down 16/32, but I am not expecting to see much of a change in this morning's mortgage rates due to strength in bonds late yesterday. This morning's losses should simply erase yesterday's afternoon gains, keeping mortgage pricing near yesterday's morning levels.
The National Association of Realtors reported this morning that home resales rose 7.2% last month. This was nearly triple the increase in sales that was expected, indicating that the housing sector may be strengthening at a quicker pace than many had thought. While that is good news for homeowners, it is bad news for bonds because a strengthening housing sector makes a broader economic recovery more viable. Since bonds are more attractive to investors in a weaker economy env ironment, a strengthening economy can lead to higher mortgage rates.
Fed Chairman Bernanke is speaking this morning at a conference in Jackson Hole. I doubt that he will say anything new that will surprise the markets. The topic of the speech is the past year's financial crisis. He may address future economic activity, but probably nothing that we have not already heard.
Next week is fairly busy in terms of economic reports scheduled for release in addition to more Treasury auctions. There is no relevant data due to be posted Monday, but Tuesday does bring us an important release. Look for details on next week's events in Sunday's weekly preview.
Wednesday's bond market has opened up sharply following the early losses in stocks and overnight losses in some international stock markets. This has made bonds more appealing to investors as they seek safe-haven from the expected volatility in stocks. The Dow is currently down 33 points while the Nasdaq has lost 5 points. The bond market is currently up 25/32, which will likely push this morning's mortgage rates lower by approximately .125 - .250 of a discount point.
There is no relevant economic data scheduled for release today. As expected, the stock markets are influencing bond trading and mortgage rates. With the sizable losses in overseas markets, particularly China, U.S. stocks are likely to have a negative day also. This has helped shift funds into bonds, at least temporarily. If the U.S. stock indexes fall further than current levels, we may see further improvements to mortgage rates later today. However, a recovery in stocks could drive bond prices lower as funds move away from bonds, causing upward revisions to mortgage rates this afternoon. I said "temporarily" above because I would not be surprised to see upward revisions to mortgage rates sometime today. I believe that the upward revision is more likely than an intra-day improvement.
Tomorrow's primary data is July's Leading Economic Indicators (LEI) from the Conference Board. This index attempts to measure economic activity over the next three to six months and is considered to be moderately important. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening more than thought. However, a weaker than expected reading means that the economy may not grow as much as predicted, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates tomorrow morning if the stock markets remain calm. Current forecas ts are calling for an increase of 0.6% in the index, indicating economic growth over the next couple of months.
We also will get weekly unemployment figures from the Labor Department. They are expected to show that 553,000 new claims for unemployment benefits were filed last week. This would be a small decline from the previous week, but unless this data shows a wide variance between forecasts and actual reading it likely will have a minimal impact on mortgage rates tomorrow.
WEDNESDAY AFTERNOON UPDATE:
This week's FOMC meeting has adjourned with no change to key short-term interest rates. This was widely expected by market participants. The post-meeting statement really didn't give us any new insight to the Fed's next move. It did renew the same thoughts previously mentioned- that the economy is leveling off but to expect weak economic conditions for the immediate future. They also indicated that inflation is not an immediate concern to the economy.
The lack of a change to rates had no impact on trading as it was expected. The portion of the statement that indicated the spiraling economy is stabilizing can be considered somewhat negative for the bond market. However, the lack of concern about inflationary pressures offset any concerns that may have arisen from the reminder than the economic downturn is slowing.
Today's 10-year Treasury Note auction has caused some stress in bonds during after noon trading though. The sale was met with an average demand at best. The results were far from the worst we have seen but also nowhere near the recent levels of interest. This led to bond prices falling immediately after the 1:00 PM ET announcement and the FOMC meeting has done nothing to push them higher.
Overall, I am expecting to see a small upward revision to mortgage rates this afternoon. If your lender does not revise higher today, it will be built into tomorrow's pricing. Some lenders may opt to wait for tomorrow morning's key economic data to be posted before reflecting this change. If that is the case, keep in mind you already have a slight increase waiting from this afternoon's events.
This morning's only relevant economic data was June's Trade Balance report that revealed a $27.0 billion deficit. This was smaller than expected, but this data is not considered to be highly important to the markets so its impact on this morning's trading a nd mortgage rates was minimal.
Tomorrow morning's sole monthly report is July's Retail Sales data. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, potentially slowing the economic recovery. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.7%.
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.
Daily Rate Lock Advisory August 10, 2009
Monday's bond market has opened up slightly as traders prepare for this week's data and other important events. The stock markets are showing minor losses with the Dow down 12 points and the Nasdaq down 2 points. The bond market is currently up 4/32, but we will likely see an improvement in this morning's rates of approximately .125 - .250 of a discount point compared to Friday's morning rates.
There is no relevant economic data scheduled for release today. The rest of the week brings us the release of six relevant economic reports in addition to another FOMC meeting. The first is Employee Productivity and Costs data for the second quarter that will be released tomorrow morning. It will give us an indication of employee output. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don't see this being a big mover of mortgage pricing, but since it is the only data of the day it may influence rates slightly. Ana lysts are currently expecting to see an increase in productivity of 5.4%. A higher than expected reading could help improve bonds, leading to lower mortgage rates tomorrow.
The FOMC meeting will begin tomorrow morning and adjourn at 2:15 PM ET Wednesday. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Look for the statement to lead to volatility during afternoon trading if it hints at what the Fed's next move may be and when it will come. If the statement does not give us new information, mortgage rates will probably move little after its release.
The most important data of the week comes Thursday and Friday when we will get measurements of consumer spending, inflation at the consumer level of the economy, industrial production and consumer sentiment. This is where we will probably see the m ost movement in rates.
Also worth noting are two important Treasury auctions this week. The sale of 10-year Notes will be held Wednesday while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as they are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors, particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Those results will be announced at 1:00 PM each sale day.
Overall, look for the most movement in bond prices and mortgage rates the second half of the week. Thursday or Friday will likely turn out to be the most important day. If we get stronger than expected results in the Retail Sales report and Consumer Price Index, I fear that we may see mortgage rates spike higher fairly quickly. I suspect the FOMC meeting will not have as much of an influence on mortgage rates as recent meetings have, but the markets can react wildly to a single word or omission of a word in the statement, so we need to be cautious. This is certainly another week that continuous contact with your mortgage professional is highly recommended if you are still floating an interest rate.
Thursday's bond market has opened relatively flat with no important economic data on the schedule for today. The stock markets are showing minor losses with the Dow down 15 points and the Nasdaq down 11 points. The bond market is currently nearly unchanged from yesterday's close, but we will still see an increase in this morning's mortgage rates of approximately .125 - .250 of a discount point due to weakness in bonds late yesterday.
Today's only semi-relevant data was weekly unemployment claims from the Labor Department. They reported that 550,000 new claims for benefits were filed last week. This was much lower than the 580,000 that was expected, but since this data basically tracks only a week's worth of claims it usually has a minimal impact on mortgage rates.
Tomorrow morning brings us the almighty monthly Employment report. This report gives us the U.S. unemployment rate, number of jobs added or lost during the month and the average hourl y 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, therefore, can heavily influence the markets and mortgage rates.
Current forecasts are calling for the unemployment rate to have risen 0.1% to 9.6% while approximately 328,000 jobs were lost. The unemployment rate probably will not be much of a factor unless it moved much more than the 0.1% that is expected. However, due to the importance of these readings, we will most likely see quite a bit of volatility in the markets and mortgage pricing tomorrow morning if they vary from forecasts. If the data shows stronger readings such as fewer jobs lost in the month or a lower than expected unemployment rate, expect to see mortgage rates move higher tomorrow. Weaker than expected readings should push mortgage rates lower.
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.
Thursday's bond market has opened in negative territory yet again despite significant stock weakness. The Dow is currently down 220 points while the Nasdaq has lost 45 points and it appears that those losses may widen as the day progresses. The bond market is currently down 19/32 as supply concerns continue to weigh on trading. This will likely push this morning's mortgage rates higher by approximately .250 of a discount point.
There were two pieces of economic data released this morning and both gave us much weaker than expected results. Unfortunately, it appears bond traders are ignoring the data since they are not usually considered to be of high importance. This is despite wide variances between forecasts and actual readings.
The first was December's Housing Starts that showed a decline in new home starts that was quadruple the drop that was expected. This gives further credence to the theory that the housing sector has not bottomed out ye t.
The second piece of data was weekly unemployment figures from the Labor Department. They reported that 589,000 new claims for benefits were field last week, greatly exceeding the 543,000 claims that were forecasted. This points to a still softening labor market and does not give hope of a economic recovery anytime soon without stimulus assistance.
There is no relevant economic data scheduled for release tomorrow, so I would not be surprised to see more weakness in bonds and pressure in mortgage rates. It is becoming clear that the market is quite concerned about the amount of debt that the government will need to sell to meet goals that the new administration is expecting.
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 tak ing 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 has opened in negative territory again as investors continue to fret about upcoming debt sales. The stock markets are rebounding somewhat from yesterday's sell-off with the Dow up 77 points and the Nasdaq up 20 points. The bond market is currently down 15/32, which will likely push this morning's mortgage rates higher by another .250 of a discount point. There is no relevant economic news scheduled for release today. Tomorrow brings us the release of both of this week's only reports. Neither are considered to be of high importance to the markets, but they are the week's only factual releases. Therefore, they may influence trading enough to slightly affect mortgage pricing.The first is December's Housing Starts report early tomorrow morning. It gives us an indication of housing sector strength and future mortgage credit demand, but it is not considered to be a heavy influence on bond trading. It is expected to show a decline in starts of new homes from November's level.The second is weekly unemployment figures from the Labor Department. They are expected to say that 548,000 new claims for benefits were filed. This would be an increase from the previous week, which would be considered favorable for bonds. If the report shows a much smaller number of claims, we may see bond prices fall and mortgage rates move higher again. However, a larger than expected number may lead to slightly lower mortgage rates tomorrow morning.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.
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