Daily Mortgage Rate Lock Advisory

Friday’s bond market has opened in positive territory as investors digest the week’s events. The stock markets are showing gains with the Dow up 50 points and the Nasdaq up 22 points. The bond market is currently up 4/32, but we will still see an increase in this morning’s mortgage rates due to weakness late yesterday.

There is no relevant economic data scheduled for release today. This makes it likely that bonds will be influenced mostly by changes in the stock markets today. As long as the major stock indexes remain calm, I would expect bonds and mortgage rates to follow suit. If the stock markets give back this morning’s gains, bonds may react favorably as the day goes on. However, afternoon weakness seems to be routine lately so we should go into the weekend with a cautious approach.

Next week is fairly active in terms of economic releases. There are several scheduled for release
that may influence mortgage pricing, but we also have an FOMC meeting on the calendar next week. In addition to those items, there is another round of Treasury auctions on the agenda that may also affect bond trading and mortgage rates.
None of the economic data or relevant events take place on Monday, so look for it to be a day of preparation for the week’s events. Unless something positive happens or is announced over the
weekend, there is little to lead us to believe Monday will be a strong day for bonds. But look for more details on next week’s data and relevant events in Sunday’s weekly preview.

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

Rate Lock Advisory – Friday Feb. 20th

Friday’s bond market has opened up sharply following early stock losses and renewed fears about the economy. The stock markets are showing early sizable losses after international markets posted large declines during overnight trading. The Dow is currently down 120 points while the Nasdaq has lost 13 points. The bond market is currently up 31/32, which will likely improve this morning’s mortgage rates by approximately .375 of a discount point.

The Labor Department gave us January’s Consumer Price Index (CPI) this morning, saying that the overall index rose 0.3% as expected. The core data rose 0.2%, exceeding analysts’ forecasts of a 0.1% increase. This means that consumer prices rose more than expected if excluding volatile food and energy prices. That is considered bad news for bonds, but the stock and economic concerns has prevented a negative reaction to this morning’s news.

The concerns, both here and overseas, about the global economy are contributing greatly to this morning’s bond gains. We are seeing a shift to safety as investors sell stocks and move funds into bonds. While this is good news for the bond market and mortgage rates, this is sometimes only a temporary move and could lead to further volatility in trading in the coming days and weeks. If investors become more comfortable with stocks, we could see those same funds move from bonds back into stocks, driving bonds prices lower and mortgage rates higher. Still, no reason to panic. This just means we need to watch the markets closely.

Next week is fairly active in terms of economic releases and relevant events. There is no important news scheduled for release Monday, but we do get important data and the semi-annual monetary policy testimony from the Fed Chairman to Congress on Tuesday. The rest of the week is scattered with relevant data releases, so look to Sunday’s weekly preview for details.

If I were considering finan cing/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.