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Rate Lock Advisory - Tuesday Mar. 2nd

March 2nd, 2010 11:31 AM

Rate Lock Advisory - Tuesday Mar. 2nd

Tuesday's bond market has opened in negative territory following early stock gains. The stock markets are extending yesterday's gains with the Dow up 40 points while the Nasdaq has gained 11 points. The bond market is currently down 6/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

There is no relevant economic data scheduled for release today, leaving the stock markets to drive bond trading and mortgage rates today. If the stock markets extend their current gains, we may see bond prices fall and mortgage rates rise this afternoon. If they give back their early gains, bonds could move into positive ground, leading to downward revisions to mortgage pricing.

The Fed Beige Book will be posted at 2:00 PM ET tomorrow. There is no important data being posted during morning hours. The Beige Book 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 trading. 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 that could affect mortgage rates. They are a quarterly productivity index and a measurement of manufacturing sector strength. Neither are considered highly important, but can influence bonds trading enough to affect 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... 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.

©Mortgage Commentary 2010

Posted by Frank Barber on March 2nd, 2010 11:31 AMPost a Comment (0)

Rate Lock Advisory - Tuesday Mar. 9th

March 9th, 2010 12:44 PM

Rate Lock Advisory - Tuesday Mar. 9th

Tuesday's bond market has opened up slightly, but not enough to improve mortgage rates. The stock markets are showing minor gains with the Dow up 13 points and the Nasdaq up 9 points. The bond market is currently up 4/32, which should keep this morning's mortgage rates at yesterday's levels.

There is no relevant economic data scheduled for release today or tomorrow morning. The 10-year Treasury Note auction will be held tomorrow while the 30-year bond sale will be held Thursday. Results of both sales will be posted at 1:00 PM ET of each day. If investor demand was high, we may see bonds rally during afternoon trading, however, weak demand could lead to selling and an increase to mortgage rates. The results of the last sales do not give us much to look forward to, so it is not likely that these auctions will fuel a bond rally and a downward trend in mortgage pricing.

The week's first factual economic data will come Thursday morning. January's Goods and Services Trade Balance will be released early Thursday morning. It gives us the size of the U.S. trade deficit and is expected to show a $41.0 billion deficit. It is the week's least important piece of news and likely will not influence mortgage rates much.

Also Thursday is the weekly release of unemployment figures from the Labor Department. They are expected to say that 460,000 new claims for unemployment benefits were filed last week, which would be a decline from the previous week. The larger the number, the better the news for bonds and mortgage pricing. However, since it tracks only a week's worth of new claims, it usually takes a wide variance between forecasts and the actual total for it to affect 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... 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.

Posted by Frank Barber on March 9th, 2010 12:44 PMPost a Comment (0)